Moving back to India after years abroad touches almost every part of your money: your tax status, bank accounts, investments in both countries, insurance and even what you can ship home duty-free. Most of the costly mistakes come from doing things in the wrong order. This checklist puts the steps in sequence, from the months before you fly to your first full year as an Indian tax resident, with the rules as they stand in October 2026.
1. Understand your tax status first
Your Indian tax status decides when your foreign income starts being taxed here, so it shapes every other decision. Under the Income-tax Act, 2025 (in force from 1 April 2026):
- You are resident in a tax year if you stay in India for 182 days or more, or for 60 days or more in the year plus 365 days or more in the preceding four years. For Indian citizens and persons of Indian origin visiting India with Indian income above ₹15 lakh, the 60 days becomes 120.
- Deemed resident: an Indian citizen with Indian income above ₹15 lakh who is not liable to tax in any other country is treated as resident.
- RNOR (resident but not ordinarily resident): you stay RNOR if you were non-resident in nine of the ten preceding years, or spent 729 days or less in India in the preceding seven years.
While you are RNOR, income that arises outside India is taxed in India only if it comes from a business controlled in, or a profession set up in, India. That is the window to receive foreign income, sell foreign assets or take foreign retirement withdrawals without Indian tax. Once you become ordinarily resident (ROR), your worldwide income is taxable here and you must list foreign assets in Schedule FA of your return; the ITR-2 instructions say the schedule "need not be filled up if you are Not Ordinarily Resident or a Non-Resident".
Work out your likely status year by year with the residential status calculator, and see RNOR status explained for how your return date changes the window.
2. Bank accounts: what changes and when
| Account | What RBI says on return | What to do |
|---|---|---|
| NRE savings and FDs | To be redesignated as resident accounts, or the money moved to an RFC account, "immediately upon the return of the account holder to India for taking up employment or on change in the residential status" | Tell the bank as soon as you return; choose resident rupee or RFC |
| NRO | "May be designated as resident accounts" on return | Convert to a resident savings account or close it; banks such as ICICI treat this as mandatory |
| FCNR(B) deposits | May continue "till maturity at the contracted rate of interest"; on maturity converted to a resident rupee or RFC account | No need to break them early |
| RFC (Resident Foreign Currency) | Can receive NRE and FCNR(B) balances, foreign assets converted under FEMA Section 6(4), and pension or benefits from an overseas employer; "free from all restrictions" on use abroad | Open one if you want to keep savings in foreign currency |
An RFC account is useful if you expect to spend money abroad again, for example on children's education, because the balance stays in foreign currency with no restriction on using it outside India. RBI's rules set no time limit on holding it. Do not confuse it with an RFC (Domestic) account, which is a non-interest current account for small foreign-currency receipts such as payments or gifts received while visiting abroad. The full comparison is in NRE vs NRO accounts.
3. Investments in India
- Shares and demat (PIS): it is your responsibility to tell both the bank that handled your Portfolio Investment Scheme and your depository participant about the change of status. The usual route is to open a resident demat and trading account, then transfer your holdings and close the NRI one. NSDL requires a depository participant to process a transfer-and-close request within two working days.
- Mutual funds: update the tax status in each folio from NRI to resident, along with your Indian address and bank account. CAMS, one of the main registrars, has a tax-status change facility for its folios.
- PPF and NPS: update your status, address and linked bank account with the bank or post office (PPF) and your NPS provider. Once you are resident, PPF can again be extended at maturity; see PPF for NRIs and NPS for NRIs.
4. Assets abroad: you can keep them
FEMA Section 6(4) lets a resident keep foreign currency, foreign securities and property abroad that were acquired while living outside India, or inherited from someone who did. RBI has clarified that returnees may "freely utilise all their eligible assets abroad as well as income on such assets or sale proceeds thereof", including for fresh investments abroad, without RBI approval, as long as the money comes from those eligible assets.
- US retirement accounts: keep them invested and avoid cashing out early. See 401(k) and IRA after moving back to India.
- Indian mutual funds held as a US person: these can be PFICs for US tax. See PFIC tax on Indian mutual funds.
- US citizens and green-card holders: you remain subject to US tax on worldwide income, and the treaty's saving clause stops you using most treaty benefits against the US. Keep filing US returns.
5. Identity paperwork: Aadhaar and PAN
- Aadhaar: if you hold an Indian passport you can enrol after you arrive; UIDAI treats you as entitled to Aadhaar without the 182-day wait. If you hold a foreign passport (for example as an OCI cardholder or US citizen), you must first live in India for 182 days or more in the 12 months before applying.
- PAN: make sure it is operative and linked to Aadhaar. An inoperative PAN causes higher TDS and blocks products such as FD-backed credit cards. There is no separate PAN form for residential status; you declare it in your tax return and in bank and broker KYC.
6. Shipping your belongings: transfer of residence
The Baggage Rules, 2026 replaced the 2016 rules from 2 February 2026. Personal and household items brought back on transfer of residence get a duty-free allowance that depends on how long you were abroad:
| Time abroad | Duty-free allowance |
|---|---|
| 3 to 12 months | ₹1.5 lakh |
| At least 1 year in the preceding two years | ₹3 lakh, if not used in the preceding three years |
| 2 years or more | Up to ₹7.5 lakh, if short visits to India in the preceding two years total no more than six months and the allowance was not used in the preceding three years |
Check the full conditions and excluded items with customs or your shipping agent before you pack.
7. Insurance
- Health insurance: under IRDAI rules you can carry waiting-period credits only when moving between Indian insurers, so a foreign policy does not port into an Indian one. Expect fresh waiting periods for pre-existing conditions, and buy Indian cover early, ideally before your foreign cover ends. The 60-month moratorium period, after which a policy can no longer be contested except for fraud, also starts afresh.
- Term insurance: review whether your cover is still adequate in rupees and whether a foreign policy will continue once you live in India. See term insurance for NRIs.
8. US Social Security
There is no Social Security (totalisation) agreement between the US and India, so US and Indian work years cannot be combined. Indian citizens can keep receiving US benefits in India only if they meet the 40-credit or 10-year US residence exception. US citizens can generally receive benefits while living abroad.
9. Credit and loans
Your foreign credit history will not follow you, and most lenders want time with an Indian employer. Plan a secured credit card early and see loans after returning to India for what banks ask for.
The checklist in order
| When | Do this |
|---|---|
| 6–12 months before | Work out your RNOR window; decide what to sell or withdraw abroad and when; plan 401(k)/IRA and PFIC exposure; buy Indian health insurance |
| Before you fly | Keep US broker and bank access working (phone, email, two-factor); list shippable goods for the transfer-of-residence allowance; collect income and tax records |
| First month back | Redesignate NRE and NRO accounts; decide on RFC; tell your PIS bank and depository participant; update mutual fund tax status; enrol for Aadhaar if eligible; check PAN is operative |
| First year | Open a resident FD and secured card to build credit; keep track of days in India; file your Indian return as RNOR |
| First ROR year | Report foreign assets in Schedule FA; decide on the withdrawal-basis option for US, UK or Canadian retirement accounts; pay advance tax on foreign income |
Common mistakes
- Leaving NRE accounts as they are. RBI expects them redesignated immediately on return.
- Breaking FCNR(B) deposits early. They can run to maturity at the contracted rate.
- Selling everything abroad in a rush. FEMA lets you keep foreign assets, and the RNOR years are often the best time to sell.
- Filing Schedule FA too early, or too late. It is required once you are ROR, not while you are RNOR.
- Waiting to buy health insurance. Waiting periods start only when the Indian policy starts.
Bottom line
Get your tax status right first, then fix your Indian accounts in the first month, keep your foreign assets unless there is a reason to sell, and use your RNOR years deliberately. To see how your US and Indian money fit together after the move, try the Return to India planner or bring everything into the FinPlann NRI plan.
This checklist explains the rules in general terms. Tax and FEMA rules depend on your exact dates and citizenship, so confirm decisions with a chartered accountant who handles NRI tax and FEMA work, and, if you still file abroad (for example a US return), with a tax preparer in that country.