I live in the UK and am eligible to apply for British citizenship. But before doing so, I would like to know what are my options with respect to the following: Public Provident Fund (PPF) in which I have invested in Post Office for the last eight years; Mutual Funds with SBI and HDFC; LIC Jeevan Anand Insurance is expected to mature in 2027; HDFC Young Star Udaan Policy; and savings accounts with SBI and HDFC Bank. As a foreign national, can I inherit a small part of agricultural land or residential property from my mother?
-modesty
If you have been living in the UK for a long time, your residential status for taxation purposes in India may already be that of a non-resident. Once you become an NRI, you cannot have a resident bank account in India. As per RBI rules, you have to re-designate your resident bank accounts as NRO accounts or NRE accounts. Perhaps you can choose to merge the balances in different accounts and continue with a single NRO account, which will make things easier for you in terms of maintaining and complying with various requirements related to reporting and taxes. You can also consider opening an NRE account to deposit foreign earnings in India.
As an NRI, there are likely to be restrictions on how you invest in mutual funds, shares, etc. in India and there may be additional compliance requirements.
An NRI cannot open a PPF account; However, if the status of the resident holder of the PPF account changes after opening the account, such NRI can invest in PPF till maturity. As discussed, if you have not already done so, you will need to immediately convert your resident accounts to NRO, NRE or foreign currency non-resident accounts.
Any income from India will be taxable for you in India. TDS will be deducted on your capital gains before it is credited to your account.
NRIs are not allowed to acquire agricultural land in India. However, an NRO who is a citizen of India or an overseas citizenship of the India cardholder can acquire agricultural land or any immovable property in India from a person resident in India. Note that if you decide to sell such agricultural land, it can only be sold to a person residing in India.
Archit Gupta is the founder and CEO of Cleartax.
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