What are the implications of not being able to change the status of bank accounts from resident to NRO even after the tax status been changed to that of NRI?
08 October 2012
Practically there is not much problem. If you have taxable income in India say from property either movable or immovabe, this has to be credited to NRO Account. If these amounts are credited to ordinary account after you become NRI, it may create problem while filing IT returns. Even now you can simply send a letter along with copy of pass port, visa, residential address at abroad, residential address in India to your bankers to change the ordinary status to NRO status.
Thanks for your advice. Actually i have a personal loan and recurring deposit linked to my resident savings account which needs to be closed before i can change the status of my savings account. And to close these i have to be in India due to some formalities. And this is the basic reason why i am not being able to change the account status. Also i have income in India only from below sources:
1. Interest on FD. 2. Few MFs.
I will close my RDs and Loans as soon as i visit India in July next year. Do you suggest me some other ways or do you see any significant problems in case the status is not changed immediately.
10 October 2012
Though you have personal loan availed in your capacity of resident status, it can continue. There is no problem. For RD also the proceeds will be credited to your NRO account (after submitting the papers to the Bank). You need not come personally for this purpose. Keep an evidence of having sent. Literally, even the resident status is not changed for the accounts open before leaving abroad, generally no complications would arise.
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