Changing investor status from NRI to a resident? Things to know

The status of an investor, whether resident or non-resident, is an important detail that is recorded at the time of investment. Operationally, there is a difference in the way the investment account of a resident investor and a non-resident investor is managed on factors such as taxation, funds and paperwork.

A change in the status from non-resident investor to a resident investor has to be registered with investment and service providers so that the required modifications can be made in the records of the investor.

Bank account

On becoming a resident investor, NRIs cannot operate the NRO/NRE/ FCNR (B) accounts. The change of status has to be intimated to the bank and a resident rupee account has to be opened.

Demat account

The authorised dealer and the depository participants must be informed of the status change. A new demat account with ‘resident’ status will be opened and the balance held in the NRI account will be transferred to the new one.

Trading account

If the NRI had an online trading account, the broker needs to be informed about the change. The trading account with NRI status will have to be closed and a new trading account with resident status will be opened.

MF investments

A KYC form with new details has to be sent to the KYC registration agency for updating the change of status, address and bank details. Mutual funds need to be informed of the change too.

Points to note

> It is best to update the change of address in the PAN records by applying in the prescribed form available online at tinyurl.com/2qfbov.

> A resident foreign currency (RFC) account may be opened by a returning Indian to transfer balances from NRE/FCNR (B) accounts. This account can hold foreign currency and continue to receive funds in foreign currency from investments abroad.

The content on this page is courtesy Centre for Investment Education and Learning (CIEL).