Q.1007 Things to take care of

when NRI status is newly acquired

Question: Hi Sir/Ma'am, I went through your website and all the FAQs. It's a wonderful website. Thanks a lot for creating and mantaining it and helping so many people! I have some questions. I have moved to Germany on 26th May 2016. I'm currently not working there. (i.e. not started working yet) I have a couple of resident accounts in India and want to convert them to NRO account when I visit India in 2017. I could not convert them before leaving the country as my visa was only 90 days long and hence there was no way to establish that I will be acquiring NRI status soon. (that's what the banks explained me when I approached them last year) I have no source of income in India, other than the interest earned on FDs/Savings account. 1. My understanding is that acc. to rule I'm an NRI now. Is it correct? 2. What documents will I need to convert the accounts to NRO? What is the procedure? 3. Do I need to file ITR, even if I had no income in FY2016-2017 in India or abroad? Is there any benefit of filing the ITR in such a case, like for ITR in Germany? 4. I have EPF account in India and want to apply to withdraw the money in it. Do I need a resident account in which the money will be credited or NRO account also works? 5. Is there anything else I need to take care of (To Do because of this status change)? Kindly suggest. Thanks and Regards, Meenal Answer: Although I am not sure what type of visa you used when you left India and what type of visa you hold to live in Germany, I will try and give you general answers to some of your questions with the assumption that you hold an Indian passport. 1. An Indian passport holder who stays out of India for more than 182 days may for taxation purposes in India want to be treated as NRI, however as far as opening NRI bank accounts in India, banks will require proof of NRI status from Indian passport holders not in the form of the number of days they spent out of India but proof in the form of a Valid Visa/Work permit/Resident card with name and complete address. o To clarify by example: Mr. X in an Indian citizen and travels abroad for pleasure quite often. Last year he spent almost 7 months out of India spending time with friends and family in USA and Canada. Does this entitle him to open NRO or NRE accounts? No! 2. To convert your accounts to NRO your bank will want to see your visa status proof and require a letter from you stating the change of your residential status and request to change your resident bank accounts to non-resident accounts 3. Tax return must be filed in India if you have taxable income or capital gains in India. In case you have a tax refund claim, then you also need to file a tax return. As far as filing tax return abroad, you will have to check with the local authorities. 4. EPF withdrawal amount can be deposited in any bank account that you have in India 5. Not sure what your status is in Germany and whether you intend to go back to India at some point of time. Consider all options including your tax obligations if any, before closing EPF.