E. ACCOUNT CHANGES FROM RESIDENT INDIAN TO NON-RESIDENT INDIAN
·
The status of an investor, whether resident or
non-resident, is an important detail that is recorded at the time of
investment.
·
Operationally, there is a difference in the way
the investment account of a resident investor and a non-resident investor is
managed on factors such as taxation, funds and paperwork.
·
The investments made by an NRI are subject to
some restrictions, which also apply to the use and transfer of funds based on
its source.
·
To enable monitoring the investment activities
of an NRI, the change in his status from resident investor (RI) to non-resident
investor (NRI) has to be registered in the investment records and bank
accounts.
1. Bank account
·
On becoming an NRI, a resident investor has to
open a non-resident external (NRE) / non-resident ordinary (NRO) / FCNR(B)
account with the bank.
·
The existing resident rupee account should
either be closed or designated as an NRO account.
2. Demat account
·
On becoming an NRI, one needs to open a new
depository account with the ‘NRI’ status.
·
The balance held in the demat account with
‘resident’ status should be transferred to the new account.
·
The securities in this account are treated as
non-repatriable.
3. Trading account
·
A new trading account needs to be opened for investments
made as an NRI.
·
One can also have separate trading accounts for
NRO and NRE account-linked transactions.
4. Portfolio
Investment Scheme
·
The NRIs can invest in the stock market only
through the portfolio investment scheme (PIS).
·
For this, they need to apply to the designated
branch of any authorized dealer category-I bank.
·
For PIS investments, if the demat account is
held with another DP, fortnightly disclosures of holdings must be made to the
bank operating the PIS.
5. MF investments
·
The changes in address and bank details have to
be intimated to the mutual fund AMCs.
·
The KYC change form needs to be sent to the KYC
registration agency for change of details, address and bank details.
·
Once the investor becomes an NRI, TDS will be
deducted on gains made on sale/redemption of mutual fund investments as
applicable.
6. PAN records
·
It is best to update the change of address in
the PAN records by applying in the prescribed form available online.