NRI Legacy Planning Guide

An NRI's financial life sits across two legal systems, two tax regimes and two probate courts. The instruments that work for a resident Indian frequently fail — or fail expensively — for an NRI. Legacy planning has to be built for both jurisdictions from day one.

Account architecture first. NRE (repatriable, tax-free interest, foreign-source only), NRO (Indian-source income, tax-applicable), and FCNR (foreign-currency deposit) each play a different role. Mixing them is the most common source of FEMA notices.

Investments. Mutual funds are open to NRIs subject to KYC and FATCA — but US and Canadian residents face restrictions from many AMCs. Direct equity is permitted through PIS. Real estate: agricultural land is prohibited; residential and commercial property is permitted with repatriation limits.

Taxation is dual. India taxes Indian-source income for NRIs; the country of residence taxes global income for tax residents. Double Taxation Avoidance Agreements (DTAA) — India has over 90 — determine which country taxes what, and at what rate. Form 10F, TRC and self-declaration are the paperwork trinity.

Succession is where most NRI estates fail. A Will drafted in the US or UK may not be automatically recognised in India, and vice versa. Best practice: two Wills, one per jurisdiction, drafted so neither revokes the other, each covering only assets in that jurisdiction. For Indian assets, register the Will in India and appoint an Indian executor.

Repatriation limits — currently up to USD 1 million per financial year from NRO — matter for beneficiaries. Plan the mix of NRE and NRO holdings so that heirs are not trapped by remittance ceilings after your death.