Paper Work: Account Changes On Becoming An NRI

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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. To begin with, he has to open a non-resident external (NRE)/ non-resident ordinary (NRO) account with the bank. The existing account should either be closed or designated as an NRO account.

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.

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.

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 status, address and bank details.

PIS

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 authorised dealer category-I bank.

Points to note

1.It is best to update the change of address in the PAN records through the prescribed form available online at http://tinyurl.com/2qfbov.

2. Once the investor becomes an NRI, TDS will be deducted on gains made on sale/redemption of mutual fund investments as applicable.

3. 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.

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