Moving back to India from USA is very tiresome. There are certain factors that are needed to be kept in check. In this article, we will explore them along with creating a checklist for every person returning from USA to India in the meanwhile.
In this Article, we will cover:
- NRI Returning to India
- US Citizen moving back to India
- The Checklist: 2020
- Moving Back to India from USA: The Sentiment
The very first aspect we need to understand here is the Individual Status of the person returning from USA. Under this status, we will evaluate his/her citizenship, residential status and origin. By evaluating these elements we can configure multiple situations. Let’s glance through them:
We will start by evaluating the Citizenship of the individual based on which they can be an Indian Citizen or a US Citizen. An Indian Citizen will be evaluated further in terms of his Residential Status, based on which He/she can be a Non Resident Indian (NRI) where as US Citizens will be further evaluated in terms of their Origin, based on which they can be a Person of Indian Origin (PIO) or Overseas Citizen of India (OCI).
Now, once we have conclusively found out about the individual status of the person, we can move ahead with the associated checklist. Let’s consider the two cases briefly:
An NRI returning to India means an Indian citizen who is a resident abroad is returning to his/her home country and can become a resident again. This entire scenario is an example of change in Residential Status of an Individual. It has no impacts on the rights of the concerned person.
A US Citizen moving back to India is a completely separate scenario. This migration involves huge repercussions in terms of citizenship, residential status, duties and rights. Although, these factors will come into play eventually with time. In the next few segments, we will walk through the changes that a US Citizen moving back to India has to undergo.
1. Know your status and its benefits: An US citizen moving back to India will either be an PIO or OCI. So, let’s understand these terms.
- A person who was born in India
- A person who at any time, held an Indian Passport or
- An individual who is either a citizen of India or whose father/mother/grandfather/grandmother was/were a citizen(s) of India
- The spouse of an Indian Citizen or a PIO
Foreign Citizenship in case of a Person of Indian Origin will not include citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal or Bhutan.
Overseas Citizen of India (OCI): OCI can be simply understood as the status given to people with a foreign citizenship who are granted with certain rights and freedoms that the citizens of India and NRIs enjoy except the following rights: voting rights, candidature in various houses of government, constitutional posts such as President, Supreme Court Judge etc. government employment, acquisition of agricultural or plantation properties.
OCIs or Overseas Citizens of India are entitled to multiple benefits under the OCI Card Scheme (watch video) (Mandatory scheme for OCIs to enroll for an OCI card to enable entry in the country with or without their foreign passports); the eligibility criteria are as follows:
- A former Indian citizen (on or after January 16, 1950)
- A person belonging to any part merged to India after August 15, 1947
- A person whose parents, grandparents or great-grandparents are/were Indian citizens
- A person married to an Indian Citizen or an existing OCI for at least 2 years
On 9th January 2015, PIO Card Scheme (watch video) (issuing of Cards to Persons of Indian Origin to allow visa-free travel to India) was withdrawn by the Government of India and has been merged with the OCI Card Scheme.
If you have the card but your kids were born abroad, make sure you enroll them for the OCI Card Scheme.
OCI Card Application Fees:
- Applications submitted from outside India: $275 or equivalent local currency
- Applications submitted in India: Rs.15,000/-
- Multiple entry; Lifelong visa to visit India
- Similar benefits to NRIs in educational, financial and economic fields
- They can buy both residential and commercial properties in India. However, they can not buy any Agricultural Land, Farm House or Plantation property. They can only be inherited or received as gifts.
You have to get used to the above mentioned benefits for a stipulated period of time which is 1 year. Now, what you need to understand here is that if you have been an OCI for 5 years and in those 5 years you have lived for at least 1 year in India, you become eligible to apply for the Indian Citizenship, which simply means all benefits unlocked!
2. Your Social Security Scenario: Returning to India doesn’t take away your social security benefits in the USA. However, you have to check for how long you are eligible. If you are eligible for Social Security benefits and are an Indian citizen but not a U.S. citizen, your payments will continue while you are out of the U.S. for six consecutive calendar months or more (depending on your situation) as, according to the Social Security Administration, “you have met an exception to the alien non-payment provisions of the Social Security law.” Use the Social Security Administration’s Payments Abroad Screening Tool for details pertaining to your specific situation.
In India, your new Social Security Number (SSN) will be your Aadhar Card and PAN Card. These are the two essential documents in India. You will need it for everything. From daily essentials like electricity, Gas to investments in the markets. So be quick on that front.
3. Handle your Finances: Being a foreign citizen you had the Non Resident Accounts in India. NRE, NRO and FCNR(B) were the only basis of handling finances in India for you. Now you need to understand what happens when you decide to return:
- The NRE Deposits need not be converted to resident accounts after your return to India. They can remain as-is till maturity while the NRI converts to a resident
- Withdrawals can only be done in Indian Rupees
- For NRE FDs broken before maturity, interest is calculated on the number of days the FD was held with the bank
- Premature breaking of NRE FDs are subject to penalties that vary from bank to bank
- Post maturity, NRE Deposit Accounts can be converted into Resident Foreign Currency (RFC) Accounts. All freely convertible currencies are allowed for RFC Accounts such as US Dollar, British Pound, Euro, Yen
- The interest will be payable at the original rate for deposits held for full term even after conversion to an Resident Foreign Currency (RFC) Account
- The interest earned on NRE Deposits that have been converted to RFC Accounts will be exempt from tax if the status of the returning NRI is RNOR (Resident but Nor Ordinarily Resident)
Another question that can be asked by people returning can be in terms of the bank accounts held in America.
Yes. People moving back to India can keep their US Bank Accounts. They can also keep their Credit Cards open to add to their credit score. One aspect that needs to be kept in mind here is taxation. India has signed the Double Tax Avoidance Treaty (DTAA) with the USA so the individual will not be paying double taxes but the returns must be filed in both the countries. So, it is entirely on the individual’s discretion to keep or give up the account.
4. Jobs in India for US Returns: Not everyone returns to India for a planned retirement. One might also want to look for jobs while they return. You should start beforehand. Startups are trending in India, but it ain’t easy to start one. Get your skills sorted and get a job while you return.
5. Keep the key factors in mind: An extensive checklist always involves keeping the minute details checked. We have some of the basic to-do’s for you in this segment. Keep up:
- Get Aadhar and PAN Card
- Update your address
- Find a job
- Get rid of unwanted stuff
- Keep your number (opt for a VOIP Phone) and use it in India over wifi
- Get OCI Cards for your kids
- Ship your important stuff
- Send Money to India
- Get your taxes sorted
It doesn’t matter whether you are moving back to India from UK, USA or any other country around the world. Returning home is always special.