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To do list for NRI before leaving India – Financial Checklist for NRI

Shitanshu Kapadia
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2
To do list for NRI before leaving India – Financial Checklist for NRI

checklist NRI

NRI means a person who works or stays outside India more than 181 days. My one of the friend has recently got H1B visa and he is flying to the USA. If he stays in the USA for next 181 days he will get NRI status. He approached me with following questions.

  • What should he do about his bank account before leaving India?
  • What should he do for the existing fixed deposit?
  • What to do about existing Mutual Fund and Stock holding?
  • What to do with PPF and Sukanya Samriddhi Account?

I solved his confusion by answering his questions. If you are also leaving India, it is better to complete certain important financial tasks before you board the plane and bid adieu to your loved ones. So, here is simple to do list for NRI leaving India.

Also Read – RNOR Status NRI can save Tax up to 3 Years

To do list for NRI before leaving India-Financial Checklist for NRI

Change Existing account to NRO account

As per RBI guideline, it is mandatory to convert your existing account to NRO, if you are planning to leave India or becoming NRI. So, the first task for you is to change your existing account to NRO account. NRO account is known as NonResident Ordinary account. You can only keep money earned in India in the rupee form in this account. NRO is like normal saving bank account only except resident status and tax treatment. Normal saving bank interest rate 4-6% is applicable on NRO account.  However, Tax treatment of NRO account is different as TDS applicable in this account is 30.9%. Apart from this bank need to report all transaction detail of this account to RBI. The maximum limit of this account is 1 Million USD. The balances in NRO accounts cannot be repatriated without the prior approval of RBI.

In order to convert the status of your existing account to NRO account, you need to submit passport, visa proof, work permit and declaration letter to the bank. On submission of these documents, the bank will convert your bank account into NRO account. This change is also possible after you leave the country, however, you need to send a notarized copy of all the mentioned documents to the bank. This will be time-consuming and tedious exercise.

Also Read – NRI Guide for buying property in India

Open NRE Account

The second task you should do is to open NRE account. NRE account is known as Non Resident External Saving account. You can deposit your foreign income earned outside India in this account. The balance maintained in this account is in rupee form and it is freely repatriable. The interest income and balance of this account is exempted from the tax.

You can open NRE account by filling up form and submitting required documents including work permit or visa proof. You can also open this account at the later stage. However, it becomes difficult remotely to open this account. NRE account can be opened in the form of Saving, current, recurring or fixed deposit accounts.

Convert existing fixed deposit to NRO

Fixed deposit is one of the favorite investment options for the Indian and I am sure you must be having it. So, a task for you before leaving India is converting this fixed deposit to NRO. Some of the banks automatically convert existing fixed deposit to NRO once you submit a request for changing your saving bank account. However, for some banks, you need to apply separately to convert this fixed deposit to NRO. The interest rate applicable on NRO fixed deposit is kind of same but the interest earned will be taxed at 30.9%.

Close your Demat account and open PIS account

I am sure you must be holding stocks in your Demat account. So, next task for you is to close the Demat account and open PIS account (Portfolio Investment Scheme) because as per RBI NRI can invest in shares and convertible debentures of Indian companies listed on NSE/BSE under the Portfolio Investment Scheme (PIS) route only. Under PIS route, NRI is permitted to invest up to a maximum of 5% of the paid-up share capital of the Indian company.

If you are NRI you need to open PIS account linked with NRO or NRE account for trading in stock market. If you are holding share in Demat account after becoming NRI it is considered as illegal. You need to transfer your existing stocks into PIS account.

Also Read – Investment options available for NRIs in INDIA

Open PPF account and Close Sukanya Samriddhi Account

PPF and Sukanya Samriddhi Account are best small saving account for Indians.  As per RBI, NRI cannot open PPF account. However, they can continue old PPF account. So next task for you is to open PPF account if you really want to take advantage of high-interest rate of PPF. Along with that if you are holding Sukanya Samriddhi Account time has come to close the account as NRI is not allowed to open or continue Sukanya Samriddhi Account.

Make Power of Attorney

Next task is to identify the most trusted person and make a power of attorney on his/her name. The power of attorney holder can do any financial transactions on behalf of you in your absence. He/she can operate your bank account, sell/purchase share, sell your property etc. So, it is advisable to choose the person carefully.  As per me, you can select your close relative like mother, father, brother or sister for this.

There are two types of power of attorney (i) General power of attorney (ii) Specific power of attorney. Select one based on your requirement. It is good to consult a legal advisor for making PoA.

Internet Banking

If you have not taken Internet banking username and password, time has come to take it. Before leaving India you should contact your bank to avail this facility. This facility will allow you to operate and view a status of your account anywhere from the Internet.

Also Read – Health Insurance Plans for NRI in India

Change your Mobile Number in Bank

If you are going to discontinue your Indian number, it is good to change the mobile number mentioned in the bank account. This is required especially when you need to enter OTP (one-time password) for performing banking transaction as OTP is generated and sent to register mobile number only. You can give mobile number of your close relative or friend.

KYC Update for Mutual Funds

As per KYC norms of RBI, it is mandatory to inform status change or change of residence to respective authority. You should update your KYC status to continue your mutual fund investment, because once your saving bank account is converted in NRO/NRE account next ECS instruction for the SIP will be not executed if fresh KYC is not given.  Even selling of fund is also not possible if KYC is not done. KYC also require IPV (in person verification) so it will be difficult to do KYC when you are not in India.

Term Plan

I am sure you must have purchased good term plan with sufficient coverage. However, if you have yet not purchase it next task for you is purchase a suitable term plan. In some country purchasing insurance policy might be costly. If you are already holding term plan or insurance policy, you should inform Insurer about your NRI status change.

Buy Health Insurance Policy

Health is wealth and you must protect your wealth i.e Health. If you have not purchased health insurance policy yet you must opt for suitable health insurance policy. Health insurance will help you to cover growing health care expenses. After becoming NRI, it will be a hassle for you to visit India for health checkup fulfilling a mandatory requirement for taking health insurance.

Also Read – 10 Tips to reduce Term Insurance Premium

Close your Home Loan or any other Loan

The next task for you before becoming NRI or leaving India is to close your home loan, personal loan, car loan etc. It is not like that you cannot keep loan pending once you become NRI, but if it is good to close the loan to avoid unnecessary hassle of documentation, NOC at the later stage.

Convert your documents in e-copy

Before leaving India it is a good idea to gather all your financial documents convert it in e-copy and store a password protected soft copy at a suitable place. This will help you in quickly locating the documents as and when required.

Joint Account Holder

It is advisable to keep one person as a joint account holder in the bank account. Your joint account holder can operate your bank account in your absence if required.

Close your Locker or add Joint holder

You must be holding a locker in the bank. So, next task for you before leaving India is to close your locker or add joint holder in the locker. You must be aware that It is mandatory for the holder to operate locker once in the six-month else bank has a right to break the locker. Once you become NRI it won’t be possible for you to operate locker every six months.

No Tax Due

You should make sure that there are no pending tax liabilities on your head. If you have any due on tax make sure you to clear it, in order to avoid hassle at later stage.

Exchange of Foreign currency

You will need foreign currency. So, next task for you is contact the bank or exchanger and convert the rupee you have in to suitable foreign currency. This will help you a lot at an initial stage.

Take suitable Credit Card

You should take a suitable credit card allowing international transactions. International credit cards are more secured as it is smart chip enabled. This credit card will bring additional helping hand at an initial stage.

This to do list is prepared based on research and experience I have. Hope this to do list for NRI will help you. If I missed anything do let me know by comment section so that it can be added.

5 Best Credit Cards for Shopping and Cashback

Shitanshu Kapadia
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2
5 Best Credit Cards for Shopping and Cashback

Shopping using credit cards can give you multi-fold benefits like cashback, reward points, EMI option, free movie tickets, etc. Since most of our shopping is done using credit cards it makes sense to select the best credit card for shopping and cashback. If you are doing regular shopping using a credit card and willing to save more money here is a list of 5 best credit cards for shopping and cashback.

Credit Card Shopping

5 Best Credit Cards for Shopping and Cashback

SBI Simply Save card

SBI Simply Save card is one of the best credit cards for shopping offered by SBI bank.

  • You get a maximum surcharge waiver of up to ₹100 per statement cycle, on your SimplySAVE Advantage SBI Card
  • You can enjoy 10 Reward points per ₹150 spent on Dining, Movies, Grocery or Departmental store purchases. Earn 1 reward point for ₹100 spent on any other category.
  • You can redeem reward points against outstanding credit card balances or against gifts.
  • To avail fee reversal, you need to have spent ₹ 1,00,000 or more on your SimplySAVE Advantage SBI Card in the previous year

Also Read – Best Credit Cards in India – Review & Comparison

American Express Payback Credit Card

New American Express Payback Credit Card is the second number in the list of best credit cards for shopping and cashback.

  • American Express Payback Credit Card offers 2 payback points on every ₹100 spent. These points are not given on utility bill payments, Insurance premium payments, and fuel payments.
  • Gift vouchers worth ₹ 7,000 or ₹ 2,000 on spending Rs. 2.5 lacs or 1.25 Lac in a Cardmembership year.
  • You will get Flipkart voucher worth ₹ 750 on taking 3 transactions within 60 days of Cardmembership

ICICI Bank Platinum Chip Credit Card

ICICI Bank Platinum Chip Credit card is available with multifold shopping benefits to end customers.

  • ICICI Bank Platinum Chip Credit Card gives 2 Reward Points on every ₹ 100 spent for all retail purchases except fuel. You can redeem these points and avail attractive gift offers.
  • 1% Fuel Surcharge Waiver on Fuel Transaction up to ₹4000.
  • ICICI Bank Platinum Chip card comes with an additional security microchip. This prevents you from fraud and duplication of cards.

Also Read – 5 Best Premium Credit Card in India

HDFC Moneyback Credit Card

HDFC Moneyback Credit Card offers the following benefits to the customer.

  • HDFC Moneyback credit card gives you 2 reward points for every ₹150 spent. You can get cashback against these reward points.
  • Online shopping will be more rewarding by using HDFC Moneyback Credit Card. You will get 2X Reward Points more reward points on every ₹150 spent on online purchases.
  • 1% Fuel Surcharge waiver on fuel transactions (Minimum transaction of ₹400, Maximum transaction of ₹5,000
  • 500 Cash Points (applicable only on payment of membership fee)

Citibank Reward Domestic Credit Card

Citibank Reward Domestic Credit card is one of the best credit cards for shopping and cashback. This card gives the following benefits to customers.

  • Citibank Reward Domestic Credit card offers 10 reward points for every ₹125 spent.
  • You can get a discount of 15% on selected restaurants.
  • Citibank Reward Domestic Credit card offers multiple offers including EMI payment at various places.

A credit card can be a great tool if used wisely. On the other hand, unwise usage leads to a huge financial burden. If you decide to use a credit card, remember a few tips given below for credit card usage.

Credit Card Usage Tips

  • Keep track of all your purchases. If possible, maintain all receipts of purchase.
  • Don’t get carried away by doing impulsive shopping.
  • Use the credit card for needs not wants.
  • Pay off your bill every month.
  • Never miss a credit card bill payment.
  • Use credit cards as a budgeting tool.
  • Take maximum benefit of rewards and cashback.
  • Use credit cards to improve your credit score.
  • If possible set up Auto Debit Facility
  • Don’t share your credit card information with anyone.

Remember the credit card market is highly competitive. Keep your eyes open and take credit card which offers maximum benefits to you.

Hope you liked this article. Do share these useful tips and information with your friends.

10 Things to consider before buying resale flat house

Shitanshu Kapadia
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10 Things to consider before buying resale flat house

In order to cut down costs, many individuals prefer to buy resale houses or resale flats. A flat that is sold twice is referred to as resale flat or resale property. In case of resale, obviously the price of such a flat will be less than that of a new one. But, a price of flat generally varies based on many factors like area, age of property, facilities, etc.

Now, if you are looking to buy a resale house or resale flat, here are some of the things that you need to take into consideration.

Real Estate Resale Flat

10 Things to consider before buying resale flat house

White to Black Money Ratio

The first point you should take into account before purchasing a second-hand home is the proportion of white to black money. The ratio of white to black money will depend upon the profession of the owner. If the owner is a businessman, he will prefer more black money, and vice versa if the owner is a salaried individual. This ratio will enable you to decide the amount of black and white money that needs to be collected.

Cost of Registration

The second important thing you should consider is the cost of registration or stamp duty. The cost of registration or stamp duty is an extra cost you need to pay to the government in order to transfer ownership or flat. This duty depends on the valuation of property.

Transfer Fees and other Charges

You need to pay additional share transfer fees at the society while buying a resale flat. Apart from this, you need to pay advocate fees and brokerage fees to an agent. So, add all these costs while calculating entire cost of the property.

Existing Loan

Generally, people mortgage the property and take loans against it. You must check if any existing loan is pending against the property. If existing loan is continue ownership documents of property are kept with the bank. These documents are only handed over to the owner once an entire loan is paid. If a loan is closed you must ask for No Due certificate issued by the bank.

Age and Condition of a Flat

Age of a flat is an important factor one should consider before buying. You should not buy a flat which is older than 10 years. Older flat give multiple problems related to maintenance. Apart from this, it will be difficult to get a home loan on old flat.

Older flats can also be less efficient than newer properties, which may result in higher utility bills and ongoing operating expenses. For this reason, buyers should look beyond the purchase price and consider how the property will perform over the long term. Exploring residential power monitoring and control solutions can be a useful way to better understand energy consumption patterns and identify opportunities to improve efficiency after moving in.

Extra Amenities and Cost

Before buying a resale flat you should consider extra amenities available with the flat. The owner might be charging extra money for the furniture and other amenities.

Document Check

You should ask your advocate to check the relevant documents of flat carefully. Your document checklist should include following documents.

  • Ownership document
  • Title clearance
  • Old Energy Bill payment
  • Property Tax payment
  • Approval plan
  • BUC documents

This document check will help you to avoid legal problems and financial burden at later stage.

Valuation of Property

You should consult the expert for the valuation of the property. Valuation of property plays important role in deciding price of property.  To get an idea you can also check price of new property in your area.

Payment Terms

 Another important thing you should consider before buying a resale house or flat is payment terms. Many owners ask for upfront payment. Under this condition, you should be in a position to make an early payment to the owner.

Area and Locality

Area and Locality is one of the prime things you should consider before buying property. Property in the posh area cost you more money and also gives you better appreciation at a later stage.

Stock Market Trading lessons from IPLT20

Shitanshu Kapadia
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0
Stock Market Trading lessons from IPLT20

IPLT20

No one can deny that cricket is a religion in our country. Indians are crazy about cricket. They eat, sleep, and drink cricket. Cricket craziness is back with the launch of the 9th season of IPLT20. You must be ready to watch IPLT20 cricket tournament. Watching IPLT20 is full of excitement and fun. Along with this fun and excitement, you can learn a valuable lesson of stock market trading from this game.

So, let’s learn stock market trading with cricket craziness.

Stock Market Trading lessons from IPLT20

Fast Game – Focus is important

IPLT20 is a fast game. The players are always in a hurry to either collect maximum run or take maximum wickets at the early stage. Along with speed, they need to be a focus and grab the opportunity as and when arise.

In trading also trader has to act very fast. They need to be prepared and focus. As and when the opportunity arises they need to grab it to gain maximum profit.

Also Read – 10 Personal Finance Lessons from Sachin Tendulkhar’s Career

Target Score – Profit

Every run is important in the game of IPLT20. Once the target is set by the opponent team chasing the target is a prime goal of every player.

In the similar line, every rupee is important in the stock market trading. A good stock market trader set the profit target every day and work smartly to chase the target.

Plan

The biggest barrier in IPL is time. That is the main reason why planning plays an important role while playing T20 match. Every team needs to do advance planning about batting order, bowling order, fielding, and multiple other things.

Similarly, the Successful traders have a trading plan that they follow. The reason of creating a trading plan is to guard against the emotional swings that you go through when trading. The trading plan establishes a framework. The trading plan describes what to do in each scenario.

Also Read – Similarities of IPL T20 and Investing

Strategy

A strategy plays an important role for the winning of IPLT20 game. T20 game is always unpredictable and exciting. A strategic play always helps in winning the game. A team needs to make various strategy based on pitch condition, score, performance, a wicket in hands, what to do while winning toss etc.

Similarly, a successful trader needs to make trading strategies. These predefined trading strategies always help in managing finance well. The trading strategy must be made in a manner to reduce risk and increase a probability of profit.

Once you set your trading strategies you have to stick to them and must try not to deviate. These strategies will help minimize your trading risks and prevent losses & helps you to reach a goal.

Assess Risk Level and make changes

In the game of IPLT20, the team needs to assess a risk level time to time and make changes accordingly. As a team, you need to decide what is working and what is not working.

Similarly, in the stock market trading, one has to identify his risk level and stay within that risk limit. In order to earn a profit, one must prevent loss. For long term stock may give you profit but for short term one must see that stock will not end up giving a loss.

Coach

A coach plays an important role in any cricket match. A coach gives training to all players about batting, blowing and fielding. Apart from this coach gives useful tips and strategy for winning a cricket match.

In the similar line, trading mentor plays an important role in learning stock market trading. A trading mentor keeps you focus and give essential information about winning trading strategy.

Also Read – Simplifying Finance through Cricket

Over to You –

I hope stock market trading lessons learned from IPLT20 will be useful to you. So, enjoy the IPLT20 cricket season and remember important lessons learned here about stock market trading.

 If I have missed any other important lesson which you have learned from IPLT20 cricket do share it in the comment section!

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