NRI Financial Planning in Thane: NRE, NRO and Repatriation

Who is an NRI, for the purpose that matters

There are two definitions and they do different jobs. Under FEMA, an NRI is a person resident outside India — the test is where you actually live and work, not how many days you spent in India. Under the Income-tax Act, residential status is decided by days of stay in the financial year (broadly 182 days, or 60 days plus 365 days over four preceding years, with different thresholds for higher-income individuals and for those going abroad for employment).

The practical consequence: you can be a non-resident for tax purposes and still hold resident bank accounts by mistake, or be a resident for tax and still be treated as non-resident under FEMA. Both have consequences. The first thing we check with a new NRI client is whether the bank accounts, mutual fund folios and demat accounts have actually been converted to non-resident status.

NRE vs NRO vs FCNR: which account does what

The choice of account determines whether your gains can leave the country. Invest from an NRE account and both principal and appreciation are repatriable. Invest from an NRO account and the redemption proceeds stay subject to the USD 1 million annual limit, with Form 15CA/15CB and a chartered accountant's certificate where required. Getting this wrong at the investment stage cannot be fixed at the repatriation stage.

Investing in Indian mutual funds as an NRI

NRIs and OCIs can invest in most Indian mutual fund schemes — on a repatriable basis from NRE/FCNR accounts, or a non-repatriable basis from NRO accounts. KYC must be updated to non-resident status, and the folio needs the overseas address and, where applicable, a FATCA declaration.

Two practical constraints catch people out. First, some AMCs do not accept subscriptions from certain jurisdictions, particularly the United States and Canada, because of local regulatory requirements. Second, NRI status changes the TDS treatment on redemption, so the cash-flow assumption in a plan has to use post-TDS numbers.

We build NRI portfolios using mutual funds, SIF and, for larger corpora, PMS or AIF where the minimums and the mandate fit.

Direct equity and the PIS route

If you want to hold Indian shares directly, you need a Portfolio Investment Scheme account through a designated bank, linked to your NRE or NRO account, with each trade reported by the bank to the RBI. Under the current rules, an individual NRI or OCI may hold less than 10% of the paid-up equity capital of a single listed company on a fully diluted basis — the limit was raised from 5% with effect from 12 June 2026 — and the combined NRI/OCI ceiling is 24%.

For most NRIs, direct equity is the wrong starting point. It adds single-stock risk, PIS paperwork and cross-border reporting to a portfolio that is usually better served by diversified funds. We cover the equity option through our equity desk only where the client has the time and appetite to hold individual positions.

How gains are taxed

For equity-oriented mutual funds, the position for FY 2026-27 is:

• Long-term (held over 12 months): 12.5% on gains above ₹1.25 lakh per financial year, under section 112A.
• Short-term (held 12 months or less): 20%, under section 111A.
• Debt and specified mutual funds acquired on or after 1 April 2023 are taxed at the investor's slab rate regardless of holding period.

The ₹1.25 lakh exemption is aggregate per taxpayer per year, not per scheme — a detail that costs people money when they redeem several funds in the same year. NRIs also face TDS on redemption at the applicable rate, and can claim treaty relief under DTAA where their country of residence has one with India. The full mechanics are in our mutual fund taxation guide.

The five mistakes we see most often

1. Resident accounts left unconverted after moving abroad, which creates FEMA exposure.
2. Investing from the wrong account, permanently restricting repatriation of the gains.
3. No India-side nominee or succession paperwork, which is the single largest operational risk for NRI portfolios.
4. Ignoring the home country's reporting — many jurisdictions tax worldwide income and require disclosure of Indian accounts.
5. Reacting to Indian market news from a different time zone, usually at the worst possible moment.

How we work across time zones

Manas Money is based in Wagle Estate, Thane West, and works with clients in 24+ cities across 7 countries. Meetings are scheduled in a window that works for both sides — early morning India time for the US west coast, evening for the UK and Gulf. Document collection, KYC and mandate setup are handled digitally.

Reviews happen quarterly, and always before a repatriation rather than after. If you are planning to move money out in a financial year, the sequencing of redemptions, the ₹1.25 lakh exemption and the TDS position should be decided in advance, not discovered at the bank.

For the India-side portfolio itself, see NRI services and financial planning. If you are still in India and about to move, start with the Mumbai guide — the planning sequence is different for someone who has not yet left.