Common Question: My daughter will be leaving for the UK in the first week of September 2018 for higher studies and will not return to India until August 2019. So, she will be an NRI for the financial year 2018-19, as she will be out of India for more than 182 days. When should she declare her NRI status to the bank or mutual fund? Should it be just before leaving or only after 31 March 2019, when the financial year will be over and her absence from India will exceed 182 days? Which other financial institutions need to be informed of her NRI status? She holds a PAN but is not assessed for income tax.
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Answer: RBI, for the purpose of Foreign Exchange Management Act (FEMA), accords special status to students going abroad for studies. They would be treated as NRIs from the day of their departure from India.
Therefore, she must intimate banks about the change in her residential status (under FEMA) before her departure. She can also update her KYC details with mutual fund houses and other financial institutions.