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Hardik Parikh | Answer |Ask -Follow

Tax, Mutual Fund Expert - Answered on Apr 06, 2023

Hardik Parikh is a chartered accountant with over 15 years of experience in taxation, accounting and finance.
He also holds an MBA degree from IIM-Indore.
Hardik, who began his career as an equity research analyst, founded his own advisory firm, Hardik Parikh Associates LLP, which provides a variety of financial services to clients.
He is committed to sharing his knowledge and helping others learn more about finance. He also speaks about valuation at different forums, such as study groups of the Western India Regional Council of Chartered Accountants.... more

Question by Pradeep on Mar 14, 2023Hindi

my daughter is working with AIG , London since Jan '2022. Now that she has become NRI , is she required to close all her existing savings account and open new NRE and NRO account. Also she has some personal loan so if those accounts are closed , how will she repay loan.

Ans: As your daughter has become an NRI, there are some changes she needs to make to her banking and financial accounts in India. I'll break down the steps she needs to take and address your concerns.

Savings Account: Your daughter should inform her bank about her change in residential status and convert her existing savings account to an NRO (Non-Resident Ordinary) account. This will allow her to manage her income from sources within India, such as rent or interest.
NRE Account: It is advisable for her to open an NRE (Non-Resident External) account, which will allow her to repatriate funds back to India in Indian Rupees. This account is particularly useful for transferring her salary or other income earned in foreign currency.
Personal Loan Repayment: Since her existing savings account will be converted to an NRO account, she can continue to repay her personal loan using this account. The loan repayment process should not be affected by the change in her residential status.
Please note that these are general recommendations, and your daughter should consult with her bank and a tax professional to ensure she complies with all regulations and reporting requirements for NRIs.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Anil Rego |377 Answers |Ask -Follow

Financial Planner - Answered on Apr 04, 2022

Question by ARUN - Apr 04, 2022Hindi

Dear Mr Anil, I read your column with lot of interest. It is really very useful info. My son and daughter were working in India and contributed for 2 years and 3 years in NPS 1 and 2. My son went to USA for studies and now started working; my daughter too is working in USA after marriage. They both also have PF accounts. We have so far contributed to all these 3 schemes i.e. NPS1, 2 (aprrox 10K to 20K pa) and 1.5L each to PPF accounts so far. But, there is a doubt now due to their converting into NRI status. Can they continue contributions to NPS 1, 2 and PPF accounts? They are filing returns so far but with NIL income (there is only a small interest income from their NRO accounts). We cannot even withdraw amount from NPS1. Look forward to your expert opinion.

Ans: When a Resident Indian becomes NRI he will have to close the NPS account when his residency status changes. As an NRI, he can open another NPS account.

In case of PPF account, an NRI cannot open a new PPF account. But if he had opened a PPF account when he was a resident Indian, he needs to notify the bank regarding his change of status and he can hold that account till its maturity and can keep contributing after status change.

During withdrawal, the credit of this amount happens to one’s NRO account.

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