As an NRI, financial planning means managing your money across two countries. You earn in one currency but may spend, invest or support your family in two currencies.
A good financial plan covers all sides: bank accounts, investments, taxes, insurance, a Will.
India’s Ministry of External Affairs counted around 1.78 crore NRIs as of January 2026, with large communities in the UAE, Saudi Arabia and the US, as shown in its population of overseas Indians data.
Money sent home is also a significant part of India’s economy. RBI data show that India’s net secondary income, largely comprising money sent home by Indians working abroad, rose to US 155.3 billion in 2025-26 from USD 135.6 billion the previous year.
This guide explains how you can organise your finances as an NRI, with practical examples for Indians living in the Gulf, the US and the UK, as well as those planning to return home.
What is NRI financial planning?
NRI financial planning means setting financial goals and creating a plan that works under the rules of both India and your country of residence. It covers where you keep your money, how you invest it, how your income is taxed, how you protect your family and how your assets will be passed on.
As a resident Indian, you generally plan around one country’s financial and tax rules. As an NRI, you have to consider two sets of rules, and that can impact a lot of financial decisions.
Why is financial planning for NRIs different?
Your money moves between currencies. The value of the rupee against the currency you earn can affect your financial goals. For example, one US dollar bought about ₹88.72 in October 2025 and around ₹96.73 in October 2026.
A stronger dollar can help when you send money to India. But if you are saving in Indian rupees for your child’s college fees in Canada, exchange-rate movements can work against you.
You have to follow two sets of rules. India’s Foreign Exchange Management Act (FEMA) governs how money moves into and out of India, while Indian tax laws determine how your Indian income is taxed. Your country of residence may also tax certain investments or income earned in India.
Your financial goals may be in different countries. You might be saving for a home in Dubai, planning to buy another property in Bengaluru and supporting your parents in Mysore. Each goal needs a separate plan based on when you need the money and which currency you will spend it in.
Anuj says “Most NRIs I meet are good at saving. The challenge is that their money is often spread across different accounts, investments and properties. You may have an old NRO account, a policy purchased years ago and a flat in India that you rarely visit. Putting everything together makes it easier to set the direction.”
Know your residential status first
Your residential status determines how India taxes your income. If you qualify as a non-resident, India generally taxes your income received or earned in India, such as rent from an Indian property or interest from an NRO account.
Your salary earned abroad is generally not taxable in India while you remain a non-resident, subject to the applicable rules.
You are generally treated as a resident in a financial year (April to March) if:
- You spend 182 days or more in India during that year; or
- You spend 60 days or more in India during that year and 365 days or more in the four preceding years.
Special rules apply to Indian citizens working abroad or visiting India. The 60-day threshold is generally replaced by 182 days in these cases. However, if your Indian income exceeds ₹15 lakh a year, the threshold for certain visiting Indian citizens may fall to 120 days.
There is also a deemed-resident rule for Indian citizens with Indian income above ₹15 lakh who are not liable to tax in another country, as TaxGuru explains.
The Income-tax Act, 2025, came into force on 1 April 2026. Although the provisions have been reorganised, the key day-count tests and thresholds remain unchanged.
What should you do? Keep a record of the days you spend in India every financial year. Before planning a long visit or an extended stay with family, check whether it could affect your residential status and tax liability.
Set up the right accounts: NRE vs NRO account and FCNR
Once you become an NRI, you must inform your bank and redesignate your resident savings account as an NRO account.
You can then use a combination of three types of accounts, depending on where your money comes from and where you may need it.
Feature | NRE account | NRO account | FCNR (B) deposit |
What goes in? | Money earned abroad | Indian income, such as rent, dividends and pension | Foreign earnings kept in foreign currency |
Currency | Indian rupees | Indian rupees | Foreign currencies such as USD, GBP and EUR |
Tax on interest in India | Generally tax-free for eligible NRIs | Taxable, with applicable TDS | Generally tax-free for eligible NRIs |
Sending money abroad | Freely repatriable | Up to USD 1 million per financial year, subject to conditions | Freely repatriable |
Currency risk | Yes | Yes | Generally no exchange-rate risk on the foreign-currency principal |
Best suited for | Foreign earnings you send to India | Income earned in India | Savings you may need in foreign currency |
An NRE fixed deposit can help you earn a predictable return on money brought into India, with interest generally exempt from Indian income tax for eligible NRIs. Interest on NRO deposits is taxable, and banks deduct TDS where applicable.
Example: Ravi, 34, works as a software engineer in Dubai. He sends part of his salary to his NRE account and receives rent from his Ahmedabad flat in his NRO account.
This arrangement helps him keep his foreign earnings separate from his Indian income and makes it easier to track the tax treatment and repatriation rules for each.
NRI investment options in India
NRIs can invest in several of the same asset classes available to resident Indians, although certain restrictions apply. These are the main options to consider when building your investment plan.
Mutual funds
Mutual funds pool money from multiple investors and invest it according to a fund’s strategy. They can be a practical way to build a diversified portfolio without selecting individual securities yourself.
You can invest through an eligible NRE or NRO account after completing the required KYC checks.
If you are new to mutual funds, our comprehensive guide to mutual funds in India explains how they work and what you should consider before investing.
However, there are two important points to remember.
First, many fund houses and investment platforms have restrictions on accepting investments from NRIs living in the US or Canada.
Second, US tax laws can treat Indian mutual funds as passive foreign investment companies (PFICs), which may result in complex reporting and unfavourable tax treatment. If you live in the US, speak to a qualified US tax adviser before investing in Indian mutual funds.
Also read: NRIs and OCIs May Soon Complete KYC Without Visiting India
Shares
You can invest in listed Indian shares through a demat account linked to your NRE or NRO account. If you want to buy shares on a repatriable basis, you generally need to follow the Portfolio Investment Scheme (PIS) requirements applicable to your investment route and bank.
Before investing, confirm the account setup, reporting requirements and whether you want the proceeds to remain in India or be transferred abroad.
Fixed deposits
NRE and FCNR deposits can be useful when you want predictable returns and expect to need the money in the next few years.
An NRE deposit is held in rupees, while an FCNR deposit is maintained in a permitted foreign currency.
National Pension System (NPS)
NRIs and eligible OCIs aged 18 to 85 can open an NPS Tier I account, as explained in Outlook Money’s guide to NPS for NRIs. However, NRIs cannot open Tier II accounts.
Under the PFRDA exit rules announced in December 2025, non-government subscribers can withdraw up to 80% of their corpus at exit, while the remaining 20% must be used to buy an annuity for regular pension payments.
If your corpus is ₹8 lakh or less, you can withdraw the entire amount. However, check the tax implications before withdrawing, as the full lump sum may not be tax-exempt.
PPF and Property
As an NRI, you cannot open a new Public Provident Fund (PPF) account. However, you can continue holding an account opened while you were a resident until it matures, subject to the applicable rules.
NRIs can purchase residential and commercial property in India, but agricultural land, farmhouses and plantation property are generally restricted.
Property can also be difficult to manage from abroad. If you are considering another flat because relatives recommend it, first look at the rental income, maintenance costs, liquidity and how the purchase fits your overall financial goals.
Anuj says: “Before choosing an investment, I ask NRIs one simple question: where will you eventually spend this money? If your goal is in India, a rupee-based investment may make sense. If you are saving for your child’s education abroad, you may need to account for that future dollar expense. Once you are clear about the goal and currency, choosing the right investment becomes much easier.”
Investing through GIFT City as an NRI
GIFT City in Gandhinagar is India’s international financial centre, offering eligible investors access to foreign-currency investments, including dollar-denominated options.
This can be useful if you plan to spend the money abroad and want to avoid converting it into rupees and back again.
For NRIs, GIFT City is another option to consider alongside investing directly in India or through overseas platforms.
However, GIFT City products come with their own eligibility conditions, minimum investment amounts, fees and tax implications. Read our guide on GIFT City investments for NRIs covering the options, and the step-by-step beginner’s guide to understand the process.
Before investing, compare the costs, risks, tax treatment and liquidity with other available options. GIFT City is worth evaluating, but it may not be necessary for every NRI portfolio.
NRI taxation in India: TDS, DTAA and filing returns
Tax is an area where NRIs can lose money unnecessarily if they do not understand the rules. Four things deserve particular attention.
- TDS can be higher than your final tax liability. Banks and buyers may deduct more tax than you actually owe on your income in India. By filing an Indian tax return, you can claim a refund. If you have capital gains or rental income, you will generally need to file ITR-2.
- Check if your country has a tax treaty with India. India has agreements called Double Taxation Avoidance Agreements (DTAAs) with many countries to help you avoid paying tax twice on the same income. To use these benefits, you generally need a Tax Residency Certificate (TRC) from your country of residence, as explained in AMFI’s tax guide. Check the requirements each year to make sure your documents are up to date.
- Know how much tax you pay on mutual funds. If you sell equity mutual fund units held for 12 months or less, your gains are taxed at 20%. If you sell them after 12 months, long-term gains above ₹1.25 lakh in a financial year are taxed at 12.5%, plus applicable surcharge and cess.
- Know the tax rules before selling property. If you have held a property for more than 24 months, the long-term capital gains tax rate is generally 12.5%, plus applicable surcharge and cess. The buyer also has to deduct TDS. From 1 October 2026, resident buyers purchasing property from an NRI no longer need a separate TAN(tax deduction account number) to deposit TDS and can use their PAN instead, as Outlook Money explains. If you expect to pay less tax than the amount being deducted, you can apply for a certificate that allows the buyer to deduct less TDS.
Repatriation rules: moving money back abroad
Repatriation means transferring money from India to your country of residence. The rules depend on the account holding the money and the source of the funds.
- NRE and FCNR accounts: Eligible balances can generally be repatriated in full.
- NRO accounts: Remittances are generally permitted up to USD 1 million per financial year, subject to applicable conditions, tax compliance and documentation. This limit can also cover eligible proceeds from property sales.
- Tax documents: Banks may require supporting tax forms before processing an NRO remittance. From 1 April 2026, Form 15CA and Form 15CB have been replaced by Forms 145 and 146 under the new tax framework, as explained in SBNRI’s guide.
Keep your property sale deeds, tax payment receipts, bank statements and other supporting documents organised. Missing paperwork can delay a transfer even when the money is eligible for repatriation.
Insurance and an emergency fund
Before focusing on investment returns, make sure you and your family are financially protected against unexpected expenses.
Health insurance for your parents. Medical expenses can rise quickly, especially as parents grow older. WTW projected India’s medical cost trend at 12.9% for 2026 in its Asia-Pacific medical inflation report. If your parents depend on you, an appropriate Indian health insurance policy can help reduce the burden of hospital bills. Our health insurance advisory service can help you compare available options.
Life insurance that stays with you. Your employer’s life insurance abroad may end when you leave the job. A personal term life insurance policy can provide protection that is not tied to your employment.
As general guidance rather than a fixed rule, some financial planners suggest life cover of around 10 to 15 times your annual income. Your actual requirement should account for outstanding loans, family expenses and future goals.
An emergency fund. A common starting point is six months of expenses, although you may need more depending on your circumstances. If you work in the Gulf, for example, losing your job may also mean having to leave the country at short notice.
Your emergency fund should be accessible when you need it, without forcing you to sell long-term investments at an unfavourable time.
Review your insurance and emergency savings whenever your income, family responsibilities or employment situation changes.
Estate planning and Wills for NRIs
Estate planning is often overlooked, but it becomes particularly important when your assets are spread across two countries.
It involves deciding who should receive your assets and making it easier for your family to access them. Zenith’s guide to estate planning explains the basics.
Make a Will for your Indian assets. A Will made abroad may be valid in India, depending on the circumstances, but using it to settle Indian assets can involve additional formalities. A properly drafted will covering your Indian assets can make the process easier for your family.
Without a valid Will, your assets may pass under intestate succession rules. The legal outcome may not match what you would have chosen.
Remember that a nominee is not necessarily the legal owner. The Supreme Court’s December 2023 ruling clarified that nomination does not automatically override the rights of legal heirs in the cases covered by the judgment. A nominee may hold or receive an asset without becoming its ultimate beneficial owner. You can read more about the Supreme Court’s clarification on nomination and succession rights.
For example, naming your brother as the nominee for an investment does not necessarily mean he will inherit it. Keep your nominations updated and ensure they are consistent with your estate plan.
Anuj says, “When your money and assets are spread across countries, your family may already have enough to deal with when something happens to you. A clear Will, an updated list of accounts and correct nominations can make a difficult time less stressful. These are simple steps, but they can save your family a lot of paperwork and confusion.”
Planning your return to India: the RNOR window
If you plan to return to India permanently, start preparing one to two years in advance.
Your bank accounts. When you return permanently, your NRE accounts must be changed to resident accounts or moved to an RFC (Resident Foreign Currency) account. Interest earned on NRE accounts also becomes taxable once your tax status changes. FCNR deposits can generally continue until maturity at the agreed interest rate.
Your tax status. When you return, you may qualify as RNOR (Resident but Not Ordinarily Resident) before becoming a full Indian tax resident. This status generally depends on how long you have lived outside India and how many days you have spent in India. During the RNOR period, most foreign income is generally not taxable in India, subject to certain conditions.
Your investments abroad. Once you become a full Indian tax resident, your foreign income may become taxable in India, and you may need to report your overseas assets in your tax return. Plan ahead to decide which investments to keep, sell or move.
Example (illustrative): Suresh, 56, works in London and plans to retire in Pune in two years. He reviews his UK investments and checks the tax implications in both countries before deciding what to keep or sell.
He also moves part of his savings into Indian investments to build a regular income in rupees. Our guide to retirement planning can help you estimate how much income you may need after retirement.
A step-by-step NRI financial planning checklist
- Check your residential status for the current financial year and record your days in India.
- List your assets and loans in India and abroad, along with their nominees.
- Write down each financial goal, the amount required, the currency and the target year.
- Redesignate your resident savings account as NRO and use NRE or FCNR accounts appropriately for foreign earnings.
- Build an emergency fund and review term life and health insurance for yourself and your parents.
- Match your investments to the country and currency in which you will spend the money.
- Obtain your TRC where required, understand treaty benefits and file an Indian tax return to claim any eligible refund of excess TDS.
- Make a will covering your Indian assets and update your nominations.
- If you plan to return to India, review your RNOR eligibility and account requirements one to two years in advance.
- Review your plan annually and whenever you experience a major life change.
6 Common NRI financial planning mistakes
Avoid these common mistakes when managing your money across countries:
- Leaving money idle in an NRO savings account without considering more suitable options.
- Buying additional property simply because family members recommend it.
- Failing to inform your bank when your residential status changes, potentially creating FEMA compliance issues.
- Ignoring the tax rules of your country of residence, particularly if you live in the US and hold Indian mutual funds.
- Not filing an Indian tax return and missing the opportunity to claim an eligible refund of excess TDS.
- Waiting until the last minute to plan your return to India, leaving little time to assess the RNOR window and restructure your finances.
If you work in the US on a visa, employment and immigration uncertainty may also affect your financial decisions. Our article on why US job uncertainty matters for Indian professionals’ financial planning explains why you should plan for different outcomes rather than depend on a single assumption.
How can Zenith Finserve help you?
At Zenith Finserve, we work with Indian families in India and abroad with a goal-based approach. For NRIs, this means building a financial plan that considers both countries, covering bank accounts, investments, taxes, insurance and estate planning.
If GIFT City investments fit your requirements, our GIFT City investment services can help you understand the available options. If you are still evaluating professional advice, our guide on how to choose a financial advisor can help you assess what to look for.
Anuj says, “A good NRI financial plan is not about chasing the highest return. It is about putting your money in the right account, choosing investments that match your goals and keeping your family’s future in mind. When you need the money, it should be properly documented and accessible.”
Conclusion
NRI financial planning is about getting the basics right across two countries. Understand your residential status, use NRE, NRO and FCNR accounts for the right purposes, and choose investments based on where you will eventually spend the money.
Review your taxes, protect your family with suitable insurance and make a will. If you plan to return to India, start early so you have time to review your accounts, overseas assets and potential RNOR benefits.
Put everything together, review your plan once a year and seek professional help if you feel the need.
FAQs
What is the difference between an NRE and an NRO account?
An NRE account holds money earned abroad. Its interest is tax-free in India for NRIs, and the full amount can be sent back abroad.
An NRO account holds money earned in India, such as rent. Its interest is taxed, and you can send up to USD 1 million a year back abroad after paying tax.
What are the best NRI investment options in India?
Common choices are mutual funds, listed shares, NRE and FCNR fixed deposits, NPS and property.
The right mix depends on your goals, your host country and when you need the money. US and Canada based NRIs may find fewer mutual fund options.
Do NRIs pay tax in India on foreign income?
Not while they remain non-residents. NRIs are taxed in India only on income earned or received in India. Once you return and become a full resident, India taxes your worldwide income.
Can NRIs invest in NPS and PPF?
NRIs can open an NPS Tier I account. They cannot open a new PPF account, but can keep contributing to one opened as a resident until it matures.
How much money can an NRI send back abroad from India?
There is no limit on NRE and FCNR balances. From an NRO account, you can send up to USD 1 million per financial year, after paying the tax due and submitting the required forms.
When should a returning NRI start planning?
Ideally one to two years before the move. That gives you time to plan your RNOR window, decide which foreign assets to keep and change your Indian accounts in an orderly way.
