Moving Abroad from India: The Money Checklist for New NRIs

When you move abroad from India, tell your bank first: your savings account has to be redesignated as an NRO account, and your foreign salary should land in a new NRE account. Then change your tax status from resident to NRI with every mutual fund and broker, move your shares to an NRO demat account, keep PPF running until maturity, and decide whether to withdraw EPF. Your loans, insurance and credit cards can mostly continue, but each needs a phone call. The order matters more than the speed, and this checklist puts the steps in sequence, with the rules as they stand in October 2026.

If you are coming back rather than leaving, the mirror of this guide is the moving back to India money checklist.

When do you become an NRI for tax?

Not on the day you fly. Indian tax status is decided for the whole tax year (1 April to 31 March), based on the days you spend in India. Under section 6 of the Income-tax Act, 2025 you are resident if you are in India for 182 days or more in the year, or 60 days in the year plus 365 days in the previous four years.

The second test is the one that would trap most people leaving mid-year, and there is a relief for it. The Income Tax Department says an Indian citizen who leaves India for employment abroad is resident "only if his stay in India is 182 days or more" in that year. So if you are leaving for a job, only the 182-day count matters.

Illustrative example, tax year 2026-27, counting both 1 April and the day you fly out, and assuming no visits back later in the year:

A trip home for Diwali adds days to the same count. If you end up resident (and ordinarily resident) for the year you leave, your income for the whole year, including the foreign salary you earn after you leave, is taxable in India, and you rely on the tax treaty and foreign tax credit to avoid paying twice. Check your own dates with the residential status calculator.

Banking rules use a different test. Under section 2(v) of FEMA, a person who goes abroad "for or on taking up employment outside India" stops being a person resident in India straight away. That is why your bank accounts change on departure, even when your tax status for the year is still resident.

What happens to your savings account when you move abroad?

It cannot stay a resident account. RBI's Master Direction on Deposits and Accounts (para 6.10) says that when a resident becomes a person resident outside India, "his existing resident account should be designated as NRO account."

• NRO account: your old account, renamed. It takes Indian income such as rent, dividends, interest and pension (para 6.7). Interest on it is taxable in India.
• NRE account: a new account for money you earn abroad and send home. It is fully repatriable, and its interest is tax-free in India for as long as you are a non-resident under FEMA.
• Joint holders: an NRO account can be held jointly with a resident relative on a "former or survivor" basis (para 6.6), which helps if a parent manages bills for you.

Resident fixed deposits are converted the same way. The full comparison of the two account types, including the US$1 million a year limit on moving NRO money out, is in NRE vs NRO accounts.

What happens to your mutual funds and SIPs?

You can keep them. What you cannot do is leave the folios marked "resident individual" with a resident bank account attached. Every fund house wants three things:

1. KYC with an overseas address. Update your KYC with the new foreign address and a proof of it. The tax-status change form of most fund houses makes the overseas address mandatory for an NRI.
2. Change of tax status, resident to NRI. Bajaj Finserv AMC's form, for example, offers "RI to NRO" as the change and lists only an NRO account as the new bank mandate. A FATCA and CRS declaration goes with it, naming your new country of tax residence.
3. A new SIP mandate. Your existing SIP debits a resident account that is about to become an NRO account. The same form asks you to attach a mandate modification form for running SIPs, and a separate declaration if you are moving to the USA or Canada.

That separate US and Canada declaration exists because fund houses set their own rules for investors living in those two countries. Check each fund house before you assume a SIP will continue, and read mutual fund investment for NRIs for the rules country by country.

ELSS: the three-year lock-in carries on. Each SIP instalment is locked for three years from its own date, so a running ELSS SIP keeps creating new locked units. Becoming an NRI does not release them early. Note that the section 123 deduction (old section 80C) is only available in the old tax regime.

What should you do with your demat and trading account?

Stop using the resident one for new trades and move your shares. RBI's Master Direction on Foreign Investment (para 1.3) says that when a resident becomes a non-resident, "the investment shall be considered on non-repatriation basis." NSE's NRI FAQ says the same: you can keep shares bought as a resident, on a non-repatriable basis.

In practice that means:

• Open an NRO demat and trading account and transfer your existing holdings into it. Sale proceeds go to your NRO account.
• If you want to buy Indian shares with foreign money and take the proceeds back out, you also need a repatriable (NRE) trading account linked to a Portfolio Investment Scheme (PIS) permission from one designated bank branch. NSE allows separate NRE and NRO trading accounts.
• As an NRI you trade on delivery only. NSE's FAQ is direct about it: no intraday trades in the cash segment, and "Short Selling is not permitted."

Tell the broker and your depository participant before you leave, and stop placing new trades from the resident account once you are abroad.

PPF, NPS and EPF: keep, stop or withdraw?

EPF deserves its own decision. The Employees' Provident Fund Scheme, 2026 replaced the 1952 scheme from 29 June 2026, and its migration rule is the same as before: you can take the full balance out just before you leave. Whether you should depends on how long you have been contributing, because withdrawals before five years of continuous service are taxable, and interest credited after you stop working can be taxed too. I'm covering EPF for NRIs in a separate guide that publishes shortly.

Insurance: what continues and what needs a call?

• Term life insurance: an Indian policy you already hold usually keeps running. RBI's Master Direction on Insurance allows rupee policies for people living abroad and lets the insurer accept premiums from an NRO account (para 4.2(b)(ii)). Tell the insurer your new address and country of residence. If your family abroad might need the payout in foreign currency, note that a claim is paid in foreign currency only in proportion to the premium paid in foreign currency (para 4.3(i)). Term insurance for NRIs covers this in detail.
• Health insurance: read the policy wording on treatment outside India before relying on it abroad. Keeping an Indian policy alive can still make sense if you expect to come back, because IRDAI's portability rules let you carry waiting-period credit only between Indian insurers. Start again later and the waiting periods start again too.
• Employer group cover ends with the job. Don't count it.

Loans and credit cards

Loans: a home or car loan does not have to be closed. RBI's Master Direction on Borrowing and Lending (para 7.1) lets the bank "allow continuance of loan/overdraft till its original maturity", at the bank's discretion. Once you are abroad, repayments must come from an inward remittance or from your NRE, FCNR(B) or NRO account. Tell the lender and move the EMI mandate to the right account before your resident account is converted.

Credit cards: RBI permits banks to issue international credit cards to NRIs, with bills paid by inward remittance or from NRE, NRO or FCNR(B) balances (para 6.13 of the Deposits Master Direction). Whether your existing resident card is converted, replaced or closed is the bank's own policy. Ask before you go, so that an Indian card you depend on is not cancelled while you are abroad.

Aadhaar and PAN

• PAN stays the same for life. You don't apply for a new one. Update your status to NRI in bank, broker and fund-house KYC, and use the same PAN in your tax return.
• PAN-Aadhaar linking is not required for a non-resident. The e-filing portal lists "a non-resident" among those exempt, and exempt individuals are not hit by the consequences of an inoperative PAN.
• Keep your Indian mobile number active, or switch it to a plan you can keep cheaply. Banks and the e-filing portal send OTPs to it.

Your first tax return after leaving India

Your first return as an NRI is for the tax year in which you become non-resident. A few things change:

• You cannot use ITR-1. The e-filing portal says ITR-1 is "applicable for a Resident (other than Not Ordinarily Resident) Individual". NRIs with salary, interest, rent or capital gains usually file ITR-2.
• Only Indian income is taxed if you are a non-resident for the year. Your foreign salary is not.
• No Schedule FA. The foreign assets schedule is for ordinarily residents only.
• TDS goes up. Interest on NRO deposits suffers TDS at 30% plus surcharge and cess under section 393 (old section 195), unless you claim a lower treaty rate. A return is how you get any excess back.
• Sometimes no return is needed. The Income Tax Department notes that section 216 of the 2025 Act keeps the old relief: an NRI whose income is only specified investment income or long-term capital gains, with tax deducted at source, need not file.

The country-by-country filing detail is in ITR filing for NRIs. Your new country will have its own reporting rules for Indian accounts, and they depend on your full situation there.

The checklist in order

Common mistakes

• Leaving the savings account as resident. It feels harmless, but RBI's rule is that it becomes an NRO account once you live abroad, and fixing it later means explaining the gap to the bank.
• Sending foreign salary into the NRO account. It works, but the money then needs paperwork to go back out, and the interest is taxed. The NRE account exists for this.
• Assuming SIPs just carry on. A SIP linked to a converted account, or to a fund house that doesn't accept your new country, will bounce or be rejected.
• Day-trading from the old resident account. An NRI can't trade intraday or short-sell, and using a resident account after you leave makes it worse.
• Planning a long visit home in the year you leave. The 182-day count is for the whole tax year. A long visit can turn you resident for that year and make your foreign salary taxable in India.
• Forgetting the Indian mobile number. Without it, OTPs stop, and so does almost everything else.