NRI returning to India - Experience sharing, tips for financial planning

By Stan D'Souza, Bengaluru

Stan D’Souza is a finance professional who previously held senior positions in a bank and multinational companies of repute. "I used to manage company finances well, but when it comes to our personal financial management I think we all tend to be a bit relaxed and procrastinate due to pressure of work. I wish I had done better planning before coming back for good which would have resulted into better return on investments," he says. Presently he is doing consultancy work in the risk management and compliance related field, while helping his wife to run her wedding gown business (Bridal Brigade) which, he says, is more colourful than the dryness of finance field.

Feb 22: It is that moment in life when you have decided to come back and settle in India after spending considerable years abroad. You are excited, nervous and unsure of what is in store for you.

After living for over twenty years in Dubai, when I finally came back to settle in Bangalore, my initial experience was far from pleasant. From an orderly life with wide roads, controlled traffic, cleanliness, and rule of law, I was suddenly feeling out of sync. Of course coming to India on holidays cannot be compared with settling for good, which poses different challenges. As months pass by, being ‘a born Indian’ you learn to live in this organized chaos again, slowly but steadily. Inevitably you transform to be a part of the system and in some sense start enjoying it.

I would like to share some experiences and ideas to enable others to be better prepared for this transition, both from settling issues and financial wellbeing perspective. It is said ‘failing to plan is planning to fail’. This is true in every aspect of life. Many a time the decision to come back is thrust upon you so prematurely that you will feeltime is your biggest enemy.

Ease of settling:

If you think having a couple of crores of rupees will help you live here ‘happily ever after’ with the same life style, you are in for a surprise. The rents are not cheap, continuously rising, and so is the cost of basic necessities. The prices of groceries and household items are similar to that of Dubai multiplied by the exchange rate; sometimes much more. If you have your own house, you would be better off. However if you do not have one, buying a new one would deflate a big part of your savings.

We take electricity and water issues, for granted in the Gulf and even in the western countries. Here it is a daily struggle. You need to have a power backup with UPS. Corporation water is highly inadequate especially in new areas. You end up paying lots to buy tanker water, the price of which varies depending upon the season.

Traffic in Bangalore is a nightmare and time consuming. At times one is too close to comfort with the next person in the traffic. But you will get used to it. The good news is one cannot drive fast. There is some unwritten order in this chaos and people respect it. Having your own car is ideal; a smaller car is better if you intend to drive regularly in the traffic and in small lanes.

With everyone’s sons and daughters aspiring for higher studies, skilled labour is a scare commodity. Maintenance work is expensive and there is no time commitment. You are at their mercy and in majority of the cases the quality of the workmanship is poor. It is advisable, that you bring quality home tools as the workers expect you to have them.But over time you will develop contacts and a network of fairly good workers. It would be beneficial to bring your essential household furniture from abroad (a full container would work cheaper with less damage to the items). This proved to be cost effective for me and the quality of the furniture was superior to what was readily available in the local market.

The best part of Bangalore is the weather - it is very pleasant for most part of the year (sans some dust at main roads).I enjoy my fish here (better than Dubai!). I have found a good fish vendor in Johnson market, one Aslam Bhai, gives me very good fish which he gets from Mangalore. (Not that Aslam Bhai… Dubai ka chashma Cheen ki chaddiwala). You get fresh pork unlike frozen one in Dubai. Fresh seasonal Fruits, vegetables are available in plenty. You make friends here easily.

Mind your finances:

The issues that I would like to discuss here are relevant not just for those who return for good, but for people who live abroad and dream that life goes on and on. Advance planning is equally important here too if you want to live happily after returning to India. Here are a couple of points I would like to draw your attention to. I wish I too had thought in these lines before.

1. Taxation:
As a NRI if your India origin taxable income is more than Rs.2.5 lacs (Indian incomes like rents received, interest on NRO accounts etc.) you need to file your tax return. If you stay in India beyond 180 days you would be considered ‘resident’ for Income tax purpose. All your interest on NRI Bank deposits is taxable from day one of your becoming a resident. FCNR can be converted into RFC Accounts and can be held for two years without tax. Thereafter it becomes resident income and taxable.You need to declare your foreign assets in your tax return. Now with mandatory PAN card, one cannot escape and there are penal provisions for not filing tax returns.Hence tax planning is something you need to consider before you come for good.

2. NRIs who do not plan to return soon: If you have sizeable NRO deposits for which TDS is deducted and you file returns, you can convert them to NRE deposit and not pay any tax or have TDS deducted. I am sure many are not aware of this provision. RBI permits up to USD 1 million to be transferred into NRE deposits from NRO funds. What you need to prove is that the NRO amount was from foreign remittances. The process is simple. You need to submit a certificate in this regard from a Chartered Accountant to your Bank and the Banks would do the rest. The interest rates in India are expected to come down continuously going forward and hence, this option could be used to avail higher NRE interest rate for a longer maturity. Please do the cost benefit analysis taking into consideration tax savings also.

3. Financial Planning is something very important which should not be postponed. It is like a budget with a long term view where your life’s goals are be matched to your financial needs at different stages of your life. Whatever investment you would do should be as per this plan, rather than momentary decisions based on advices from sellers of investments with vested interests. Many fail to do this either because of paucity of time, lack of knowledge and end up in miserable investments. There are lots of good financial Advisors and you need to test them for their ideas and choose one. On my return I tried couple of RMs from Banks and some independent financial advisors. My experience is an independent adviser of repute would be good as his/her proposition includes wider net of investment options than Bankers who are focused on products related to their Banks only. The former are also cost effective. I am lucky that I met someone with over 10 years’ experience, a person of Mangalorean origin, having five offices in three cities, who is not pushy and he gave me lot of options. Once I did my financial plan, I started initially with small investments through his investment wing. Now over a year I am really happy.

4. Investing: Cardinal rule in any prudent investing is ‘do not keep all your eggs in one basket’. Hence diversify. Keep adequate insurance, both life and medical.

Bank deposits are what I think most NRIs invest in. But once you are back, Bank fixed deposits (FD) are not tax efficient. There is no inflation related tax benefits allowed for Bank deposits. There are other avenues like mutual funds (MF) both equity and debt as underlying assets. For equity mutual funds, after one year there is no tax on capital gains. For debt mutual funds, you get indexation benefit (inflation deduction) on capital gains beyond 3 years. Thus very much tax efficient compared to Bank FD. Now debt mutual funds are safer andyield returns higher than Bank FD net of tax. Equity mutual funds are more volatile based on the Stock market. The best way to invest in equity MFs is through SIP route. Here every month or every week depending on how comfortable you are, a certain amount is systematically invested in these mutual funds. This will average out the risk. Indian economy is poised to grow very well in years to come and equity investments would yield better returns on the long run with no capital gains tax.

5. Tax free bonds: Once you are back and if you are lucky, sometimes you get opportunities to invest in tax free bonds, which are 15 years of maturity and with 8 to 9% tax free interest. This is as good as getting 11.5% on Bank deposits. You could also invest up to Rs.1.5 lakhs per year in Public provident Fund. This is again tax free, but need to be held for a longer period. The Tax free bonds are very safe with good ratings and are tradable on the Stock exchange.

6. Real estate is something many NRIs are interested in. This is definitely a good investment. Compared to flats, holding land will yield more returns in the long run, but it is associated with lot of management issues especially in Bangalore with many unpleasant incidents. You definitely need somebody locally to look after your investments.

7. PMS: One thing I would recommend would be to have a PMS account (Portfolio Management Account) with wealth managers of repute. Here your wealth managerhandles your investment on your behalf with your Power of Attorney. Of course the investments are discussed with you as per plan and you will have a separate Bank and a Demat account in your name. There will be online visibility of the investments made on your behalf. Moreover, there are stringent rules by SEBI (Securities Exchange Board of India) which is a watchdog with quasi-judiciary powers. Of late SEBI has come down heavily on many companies who flouted their rules. I am personally investing through PMS, and am comfortable with the growth of my investments.

If I can be of any help I may be contacted on my email: Best wishes to all my friends and well-wishers in India and abroad.


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Comment on this article


    Thu, Nov 15 2018

    Hi Stan. Nice article, I am on the. Look out for a financial advisor. Can you recommend someone

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  • younus rabbani, saudi arabia

    Tue, Jan 31 2017

    i stay here from last 18 years
    i have NRE account and terms deposit of nre account
    plz advise if i return back to india this year

    my nre account and deposits what to do?

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  • Dr.Raman, Chennai/riyadh

    Sun, Mar 20 2016

    Dear Sir
    Very very helpful article, thanks for all suggestions.I am a senior citizen now planning return to India.Please comment about Post office deposit like senior citizen monthly income scheme Can one in RNOR(resident not ordinary resident the period is 2yrs, after one looses NRI status andif one has been NRI for 10 or more years) status eligible to invest in the scheme & comment about LIC monthly income scheme
    with best wishes

    DisAgree [2] Agree [7] Reply Report Abuse


    Mon, Mar 14 2016

    Dear Stan,
    Extremely helpful input , just a few questions
    1) I have NRE FDs in India fixed for 5 years , I am planning to relocate this year what would be the tax implications on the interest earned on the NRE FD.

    DisAgree Agree [6] Reply Report Abuse

  • SS, Bangalore/ Dubai

    Sat, Mar 12 2016

    Hi Stan, this is informative and I see the challenges from the same perspective. Wanted to check with you on the Health Insurance. Our company covers insurance till we live here and it is probably too late to get a cover after returning back. Would you recommend subscribing to a health policy early on to avoid such concern or is there something you have encountered on this. Having spoken to couple of advisers in India, they only advise to take up policy and start premium right away whereas I may be looking at around 10 years still here.

    DisAgree Agree [1] Reply Report Abuse

  • Mohd. Rasheeduddin., Hyderabad.

    Mon, Jun 01 2015

    Mr. Stan your article is very informative. God bless you. thank you very much.

    DisAgree [1] Agree [3] Reply Report Abuse

  • thangaraju, dammam, ksa

    Sat, Mar 07 2015

    Eric Coelho, Mangalore,
    I would like to add the following as continuation of your article:
    Having come back after spending considerable time abroad, one can provide service to the society for common cause. For example:
    1) Adopt a village and support to improve.
    2) Adopt a rural school and support to improve
    3) Active member of NGO
    4) Free teaching/coaching
    5) Do some thing related to your profession/experience for common cause.

    I believe such activities would provide you higher satisfaction level and keep you physically/mentally active.

    All the best.

    DisAgree [3] Agree [9] Reply Report Abuse

  • Sudarshan Shetty, Udupi/Saudi Arabia

    Fri, Feb 27 2015

    Dear Stan

    Good to here you have finally settled down in India. Its worthwhile to here such a open message my colleague. This is a truth of the journey from a very organized society and back to India in order rebuild and reorganize and take up the new challenges. It has its own advantage, growth area and the success. Wish you all the best.

    DisAgree [2] Agree [3] Reply Report Abuse

  • Lancy Madtha, Dubai, UAE

    Fri, Feb 27 2015

    Dear Stan,
    Very useful information in your Article, thank you. Wishing you and Lynette ample of success in your respective ventures.
    With kind regards to you and family,
    Lancy Madtha
    Integrated Freight & Logistics Group Companies,
    Dubai, Jebel Ali, Abu Dhabi,
    United Arab Emirates.

    DisAgree [2] Agree [4] Reply Report Abuse

  • James Mendonca, Dubai/Vamanjoor

    Thu, Feb 26 2015

    Hi.Stany good article which I am sure will benifit lot of NRI like me.All the best for your consultancy service.

    DisAgree [1] Agree [9] Reply Report Abuse

  • Jossie Mascarenhas, Bajpe / Dubai

    Wed, Feb 25 2015

    It’s a great article painstakingly written by a genius. An easy to understand simple language adds beauty to it. Please keep writing in more depth on similar, financial subjects especially on real estate, mutuals etc

    Stan we wish u a happy stay in India. We really miss u here in Dubai.

    But Dubai’s loss is India’s gain.

    DisAgree [2] Agree [9] Reply Report Abuse

  • Christopher Lobo, Mangalore / Seeb Muscat

    Wed, Feb 25 2015

    Hi Stan I tried sending you a email on it says this add is not correct . Pls let me know the right one as I would like to Thank you for this nice informative article.

    DisAgree [1] Agree [5] Reply Report Abuse

  • Stan D'Souza, Bangalore

    Wed, Feb 25 2015

    Hi Christopher,
    My email address is please note you have typed "s" instead of "z".

    DisAgree [2] Agree [9] Reply Report Abuse

  • antony arun dsouza, mlore

    Wed, Feb 25 2015

    Good article regarding investment in India.Useful for NRI's who want to settle down in home country.All the best Sannu.Thanx a lot.

    DisAgree [1] Agree [8] Reply Report Abuse

  • Stany Pinto, Mangalore, Doha Qatar

    Tue, Feb 24 2015

    A wonderful & informative article. Thanks for sharing your experience and useful information to educate NRI's to plan their future back home.

    DisAgree [5] Agree [7] Reply Report Abuse

  • Marj, Mangalore/Qatar

    Mon, Feb 23 2015

    Dear Stany,
    Wonderful article. Very informative.

    DisAgree [2] Agree [12] Reply Report Abuse

  • Walter Cyril Pinto, kallianpur/udupi

    Mon, Feb 23 2015

    Indeed very useful, factual and informative article
    Being an ex NRI, back before 2 decades, I have tried and tested mutual funds to save tax on income from savings
    Mutul funds have products for
    1. ultra short term as little as 3 days
    2. Short term up to 3 years
    3. Medium term above 3 years
    4. Long term more than a year but preferably for capital which can be left alone for more than 5 years, in equity and balanced funds
    The information is useful for those who wish to earn tax efficient better returns from savings
    In my experience as Independent Financial Advisor for more than a decade, confidential consultation and prudent asset allocation, and sticking to a financial plan based on financial goals, is absolutely essential.
    The choice of a product must be a goal and not higher returns!
    Real estate the biggest draw back is conversion of white money to black money
    Mutual funds the gains are tax free/tax efficient, and above all white or legal, completely transparent costs and portfolios, and very well regulated
    Wish all the best to all those who wish to get the best out of their hard earned money

    DisAgree [1] Agree [12] Reply Report Abuse

  • ad, mangaluru

    Mon, Feb 23 2015

    Compared to many countries India is the desired country to live. Cost of living is very moderate, you can live as a pauper as well as a very expensive life. the beauty is one can move around and live healthy in a moderate beautiful climate throughout the year unlike rest of the world. fresh food is in abundance to enjoy throughout the year.
    The returnees must be tolerant to India rather than comparing to London or Dubai. I don't think one has lived there free given the hectic and miserable life style.
    Enjoy India, its a land to enjoy and live despite the drawbacks which are minuscule compared to many so called developed countries.

    DisAgree [6] Agree [20] Reply Report Abuse

  • Ambrose DMello, Pangala/ Mumbai

    Sun, Feb 22 2015

    Well analyzed and quite an informative article dear Mr Stan. Yes, after a long stay overseas, it becomes a bit difficult to decide - yet one has to take a call (earlier the better) and to move on with life to savor the fruits for all that one has sacrificed for.

    DisAgree [2] Agree [12] Reply Report Abuse

  • Apolinaris D'Souza, Valencia/Muscat

    Sun, Feb 22 2015

    Great article and valuable advise to all NRI's who one day or other has to return HOME. Great Job Stan. Let the people also know your Musical genius, in your next article. Keep it up. Best Regards.

    DisAgree [2] Agree [11] Reply Report Abuse

  • Ronnie, Kinnigoli/Canada

    Sun, Feb 22 2015

    A must read for everyone who lived and earned money in the gulf states. Many do not even know that there are other venues to invest their hard earned savings except trusting it to the banks. There is a difference between living in a tax free country and where there are taxes. Probably in a tax free environment many fail to learn or worry about life after exiting such zones. I have heard about many returnees from the gulf countries heading towards bankruptcy in the pursuit of living their lives in the environment of organised chaos - a setup very common in India.

    DisAgree [2] Agree [15] Reply Report Abuse

  • Bennet Vas, Mangalore

    Sun, Feb 22 2015

    Good article, writer is spot on on many aspects of life in India for NRI's relocating to their home base after decades abroad. Nonetheless, while the quality of life in India may not be on par for those who were doing well and have spent decades abroad,In India one sure has "self respect" - many who worked in the Gulf under the half baked locals know what I mean. Further one has to be content with what one has and live accordingly, often I find the Gulfie's / Ex Gulfies living like Beekari's with the continued "saving" mentality that I often wonder - why did they amass wealth and when are they going to spend it ?? I don't advocate splurging, but when we open our purses and spend the petro dollars here - many indirectly benefit. I fully endorse the comments of Mr. Eric Coelho and on a lighter note second the opinion of Mr. Samson Rebello, Kallianpur/Dubai - Indeed for those who are used to the good quality liquor, what one pays here for HARSH POISONOUS SPIRITS - I am talking of Rs. 1000 plus for a 750 ML bottle of Blenders pride that will last for three solo sittings .. bottom line - liquor budget needs big planning and will set you back by not less than Rs. Ten Thousand a month - that is with Moderate only night time tipple !!!!!

    DisAgree [6] Agree [23] Reply Report Abuse

  • Ronnie & Maureen Crasta, Houston, TX

    Sun, Feb 22 2015

    Excellent write up Stan and a good headsup for those planning their return. This should be well thought and uted. Thanks

    DisAgree [3] Agree [11] Reply Report Abuse

  • Florine Cutinho, Mangalore - Bangalore

    Sun, Feb 22 2015

    Dear Stan, Thanks very much for all the useful info for NRIs.

    DisAgree [3] Agree [9] Reply Report Abuse

  • steven, DXB

    Sun, Feb 22 2015

    Thank You Sir for advice. At least start now planning.

    DisAgree [4] Agree [5] Reply Report Abuse

  • Max and Jessie Rasquinha, Mangalore, Houston/Dallas, Texas

    Sun, Feb 22 2015

    Thank you, Mr. Stan D'Souza, for your wonderful article as you have begun your journey of early retirement in India after spending twenty years of your youth in Dubai. Your experiences abroad will greatly benefit thousands of Indians in Bangalore and around, and we therefore wish you best of success in all that you wish to pursue in your life.

    India is a great place to retire, at any age, so long as one has done his or her homework well and got fully prepared for all the new challenges ahead. As you rightly pointed out,the inflation of living cost in India needs careful study in appreciation of many other side benefits that one can enjoy by coming back home at the right time when you are young and capable to tackle many new tasks and responsibilities. Tasty fish, tasty water, tasty fruits, tasty native languages and customs, tasty climates and many more have a premium to pay, but it is a pride to have the confidence in ourselves that our country has enough valuable benefits to offer us during our retirement life.

    Our community, our neighborhood and our adaption to the local environment is a gift that many are not aware unless and until one visits India often and becomes familiar with so many positive advantages one can get in our own native land.

    The developments of enormous infrastructure facilities obviously bring cost of living high, and that is relevant to whichever country you travel and try to make as your permanent home. But going back to India, and getting entrenched with all the positive benefits available to each one of us is something worth considering deeply and then arrive at a final decision.

    Your expertise as a Financial Consultant will be a true benefit to many that know the value of financial planning, and India could be a best haven for many that desire a happy retirement life. We should live a moderate life wherever we are, but dying rich is equally worthwhile because others can also enjoy what you have left behind. It's all LIFE !

    DisAgree [3] Agree [12] Reply Report Abuse


    Sun, Feb 22 2015

    Thanks Mr. Stan for advise for returning NRI's. Stan's advise on bank FD's and mutual funds and other tax benefits is more suggested. Also his last two advise real estate and PMO's is lighter also kept at last options. It is well said don't put all eggs on same basket.

    Most NRI's specially in gulf countries who lives with family returning to India plan keep as 10% chances until they retire. its good.

    The bank deposits earn interest and how it co-op with inflation? you get 10 - 11% interest and same time we have inflation 5 - 6% per annum.

    NRI's who lives specially in Gulf need to plan from the beginning itself rather than from starting to plan settle down in India. As soon NRI's take up employment and after couple of years must start to plan income generating investment thats real estate and PMO's. The real estate investment may generate 6-7% income but simultaneously there will be capital appreciation also of 7 - 15% minimum. Real estate investment could be buying apartment, commercial units in commercial buildings and malls, purchase land lease out etc.

    Another investment is PMOs would have annual profit or sell on higher price

    DisAgree [5] Agree [11] Reply Report Abuse

  • Samson Rebello, Kallianpur/Dubai

    Sun, Feb 22 2015

    Well good informative article.

    To add on some NRI's who return don't account the amount will be spent on Liquor. May be social drinking or festivities. Because its cheaper in Gulf comparatively very very expensive in India and it can upset the monthly budget.This may sound silly but this also one of the factor to be considered.

    DisAgree [2] Agree [15] Reply Report Abuse

  • Eric Coelho, Mangalore

    Sun, Feb 22 2015

    Self being a financial person for nearly 35 years, sharing financial experience is a good thought but when I read this article, I sit back and think is it really worth it. We accumulate so much wealth that we should keep in FDs, in Real Estate, In Insurance, in Tax Free Bonds and finally have a PMS. I have seen people accumulate so much wealth that greed, arrogance and ego creeps in. My advice to every human on this earth, "Make money and wealth only to the extent you require" in Short "Live Rich" but when you leave this earth "Die Poor". Ensure that all your wealth is given away to charity. Someone asked me is it advisable to "Live rich and die poor" and I said it is the right step but what about your children, so I said they are well educated and brought up with family values and they will also follow the same rule "Live Rich and Die Poor. So people "Good to make money, nothing wrong" but dont regret later at your last breath that you made so much that you cannot spend it or empty it.

    DisAgree [8] Agree [69] Reply Report Abuse

  • Rita, Germany

    Sun, Feb 22 2015

    @Eric coelho Mangalore,how right you are.we think of our children and and.Of course we should.At the same time what we sometimes accumulate for "children" ,they have no interest,or have their own.First think of self suppose children put you out,or get sick.Then rest for a good reason either to who is n Need of,or good cause,or education.

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  • Jossey Saldanha, Mumbai

    Sun, Feb 22 2015

    All the best Stany ...

    DisAgree [4] Agree [7] Reply Report Abuse

  • John Vas, Kulshekar/Dubai

    Sun, Feb 22 2015

    Wish you A Safe financially protected life in Bangalore. It is really a good write up to educate NRI's to plan their future in India. Most of the time we are carried away with some selfish brokers who are experienced in their field only interested in our MONEY and do not have genuine interest to GUIDE us in different financial investments available. GOOD LUCK & HOPE TO READ MORE WRITE UPS IN FUTURE THROUGH YOUR EXPERIENCE IN INDIA FOR NRI'S.

    DisAgree [2] Agree [13] Reply Report Abuse

  • Suleman Byari, Udupi

    Sun, Feb 22 2015

    Well articulated. Useful to those NRI who are well to do.

    DisAgree [2] Agree [11] Reply Report Abuse

  • anna dcruz, Belman/Dubai

    Sun, Feb 22 2015

    Thank you Stan for sharing this useful information for the benefit of NRIs contemplating return to the home country. Sharing the pros and cons of Bangalore was quite informative.

    DisAgree [2] Agree [13] Reply Report Abuse

  • S.H, Mangalore

    Sun, Feb 22 2015

    Good article. Returning to India always looks scary mainly due to lack of infrastructure. But there is limitation especially in Gulf countries for Education of Children . This may be the reason they are returning to India. Hope few more will share their experience

    DisAgree [3] Agree [31] Reply Report Abuse

  • Joseph Dsouza, Mangalore/Qatar

    Sun, Feb 22 2015

    Dear Mr Dsouza,

    Thanks for sharing your experience. Very useful article. God Bless

    DisAgree [3] Agree [22] Reply Report Abuse

  • Ronald D, Udupi

    Sun, Feb 22 2015

    Highly useful article. It may help most of NRI's planning to settle in India some stage in future.
    there could be more challenges such as charity seekers and extortion calls if you exhibit comfortable life!

    DisAgree [4] Agree [35] Reply Report Abuse

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