Recent Immigrant

A Recent Immigrant is someone who has left India to settle permanently elsewhere. The moment you make that move, your Indian accounts, investments, and tax obligations shift, and getting the paperwork right early avoids problems later.

Before you leave: a pre-departure checklist

A Recent Immigrant needs to plan and take certain steps prior to departure, not just after arriving abroad. The points below are worth working through before you go:

1. Intimate your bankers about the change in status to “Non-Resident” under FEMA
2. Consider giving a general or specific Power of Attorney to a close relative to act on your behalf during your stay outside India
3. Intimate companies, firms, and deposit holders where you are a shareholder, partner, or depositor about the change in status as “Non-Resident” under FEMA
4. Retire from a firm or company if it carries on business in real estate, nidhi, chit fund, lottery, betting, gambling, manufacturing of cigars, trading in TDRs, or similar restricted activities
5. Open a Non-Resident External (NRE) account just before leaving India, or take the necessary forms from your bankers to open the account after you have left
6. Do not carry more than USD 10,000 in hand when travelling outside India
7. Plan for filing your Return of Income as a Non-Resident going forward
8. Understand the change in residential status and how it affects the taxability of your income, covered in the rest of this page

Establishing your immigrant status. Documents like a Tax Residency Certificate from your new country, an employment visa, business setup proof, or a Green Card help establish with Indian authorities exactly when you became an immigrant.

No RBI reporting required for the status change itself, but you should inform your banks, depositories, and mutual fund houses as soon as you have decided to settle abroad, there is no fixed deadline, just do it once the decision is final.

Your Indian accounts need re-designation

Account	What happens
Resident Savings account	Re-designated to NRO
Resident Current account	Re-designated to NRO Current account
Resident Fixed Deposit	Re-designated to NRO FD, some banks convert directly, others require premature closure and a fresh NRO FD
Shares, debentures, mutual funds	Can continue holding, just inform the companies and funds of your new status
Immovable property	Can continue to hold and deal with freely

Existing LRS investments can continue. If you had already invested abroad under the Liberalised Remittance Scheme while still resident, in shares or property, you can generally continue holding those investments after leaving. RBI has not issued specific regulation on this point, so getting professional confirmation for your specific case is worth it.

Running a business gets more complex, not impossible. You can generally continue as a proprietor, partner, or director of an Indian business after emigrating, and similarly continue an overseas business set up under the Overseas Direct Investment (ODI) route. Both come with real compliance complexity though, this is a genuine case for professional advice rather than assuming it is automatic.

Account types available to you as an NRI: NRO and NRE accounts can be opened as savings, current, recurring, or fixed deposit accounts. FCNR accounts are term deposits only, no savings or current option.

Repatriation works differently once you are non-resident. You are no longer eligible for LRS, that is a resident only scheme. Instead, you can repatriate up to USD 1 million per year from your NRO account, while NRE account funds are freely repatriable with no cap at all.

Tax treatment shifts to Non Resident rules

Once non-resident under the Income tax Act, only your India sourced income gets taxed here, subject to relief under the Double Taxation Avoidance Agreement between India and your new country of residence. Anyone paying you income needs to be told you are now non-resident, since TDS rates for non-residents differ.

A rate worth knowing: income from mutual fund units purchased in foreign currency is taxed at a flat 20% under Section 115A (special rate for certain non-resident income), rather than slab rates that might otherwise apply.

Tax clearance certificate exists on paper, rarely used in practice. Forms 30A and 30C exist for this purpose, but in practice most people leaving India for good do not obtain one. Worth discussing with a professional rather than assuming it is needed or unneeded for your specific situation.