I lived in the UAE as an NRI for 26 years. Returning to India was not a sudden decision—it took years of planning. However, many NRIs don’t always get that luxury. A job change, visa issues, or family circumstances can force a quick return. That’s why preparation is critical.
About the author: K Varghese is a SEBI-registered flat-fee-only financial advisor and a member of fee-only India, a group of fixed-fee-only advisors. He can be contacted via his website: kuvarghese.in.
This post outlines key financial and practical considerations for NRIs before returning to India. Some of these can be planned well in advance, even if your return date is uncertain. Having a ready checklist can save time, money, and stress.
- Your Retirement Plan
Your retirement plan is built on a few key assumptions—how many years you have until retirement, what your expenses will look like when retirement begins, how long retirement may last, and how much you can invest every month to build your retirement corpus.
Returning to India can significantly change many of these assumptions. Your cost of living, lifestyle expectations, inflation impact, and even retirement age may look very different compared to when you were living abroad. As a result, your existing retirement plan may need a fresh review and adjustment.
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Many countries have low inflation, but India’s long‑term average inflation is around 5.5%. Healthcare and education costs rise even faster.
Before finalising your retirement or long‑term plans:
- Estimate your realistic living expenses in India
- Adjust your retirement corpus accordingly
- Account for higher healthcare and education inflation
In some cases, you may also need to continue generating an income after moving back to India—either temporarily or for longer than originally planned—to stay on track with your financial goals. This need for ongoing income can also influence important decisions, such as where you choose to live in India, the type of housing you opt for, and your overall lifestyle choices.
- Understand India’s Tax Structure for Couples
In India, married couples are not allowed to file joint income tax returns. Each individual is assessed separately.
Since annual income up to ₹12 lakh is either tax‑free or taxed at lower rates, it makes sense to structure fixed‑income investments and rental income between spouses. Proper allocation can significantly reduce the family’s overall tax liability.
- Reassess Your Financial Goals After Relocation
Your financial plans were likely built around:
- Higher savings potential abroad
- Lower inflation in the host country
Once you move to India, revisit:
- Taxation impact
- Liquidity needs
- Priority of goals
- Suitability of existing investments
What worked abroad may not be optimal in India.
- Revisit Overseas Insurance and Pension Plans
Some NRIs invest in insurance or pension plans in their country of residence, often requiring regular payments in foreign currency.
If you won’t be able to continue these payments after returning to India:
- Speak with the provider in advance
- Understand exit options, surrender values, or conversion possibilities
- Plan a clear exit strategy to avoid penalties or losses
- Arrange Health Insurance in India Early
In most cases, your overseas health insurance is tied to employment and ends when the job does.
If you plan to settle in India:
- Purchase health insurance as early as possible
- Premiums rise sharply with age, and approvals get harder
- Considering medical inflation in India, a base cover of ₹25 lakh is advisable if affordable
Early planning here can prevent major financial strain later.
- Rationalise Overseas Bank Accounts
Many NRIs maintain multiple bank accounts abroad. After returning to India:
- Keep only essential accounts
- Close unnecessary ones before leaving, as some banks require personal presence
- Remember that once you become an Indian resident, you are required to report overseas bank accounts in your Indian income tax return
Closing accounts later may mean expensive and inconvenient international travel.
- Ensure a Valid Will for Overseas Assets
If you own assets abroad, make sure you have a legally valid will in that country.
An Indian will may not be recognised overseas. Proper estate planning ensures your assets are transferred smoothly and avoids legal complications for your family.
- Review and Close Unused Credit Cards
Many NRIs accumulate multiple credit cards to take advantage of offers and benefits. Before returning:
- Make a complete list of all credit cards you own
- Cancel cards that haven’t been used in the last six months
- Check your credit report, if available, to identify cards you may have forgotten or never activated
Leaving unused cards active can lead to unnecessary fees and potential misuse.
- Plan for Overseas Accounts and Mobile Numbers
If you plan to retain overseas bank accounts or investment products:
- Update your contact details
- Switch to an Indian mobile number where possible
- If not, make arrangements to retain your overseas number for OTPs and account access
This small step avoids major operational issues later.
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