what happens to stocks if someone become NRI after purchase?
- do I have to inform my broker?
- is there any extra charges or taxes?
basically what’s the difference?
hope this addresses your concern.
you can convert your existing resident individual account into an NRI-NRO trading & DEMAT account in Zerodha. However, converting your resident individual account to NRI-NRE Account is not possible.
An alternative to converting your resident individual account to NRI account is to transfer your holdings to another residential account and close your resident account and open a new NRI(NRE) account. (Share transfer from a resident account to an NRI(NRE) account is not allowed).
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@Kalpesh thanks for quick reply. i am not very familiar with NRE or NRO, what I’m planning to do is to move out of India in next few weeks and my status will be changed to NRI.
So will I be able to keep the existing shares in my Zerodha account in my name only?
Once your status is changed to NRI, you will have to report the same to your respective broker because there are some different rules for investment by NRI.
As the above post explains, you can either go for NRE or NRO trading account.
check this link to know the difference.
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No dear
You have to open an NRI demat account. You can transfer your security to your nri account from your individual resident account via DIS slip, cdsl offline transfer or via closure form
@HARSH_TAK oh why I cannot do that? as this way will take time isn’t it?
and once I convert or open relevant account, will I be able to trade in India once I become NRI?
When an Individual becomes a NRI, he can open 4 types of accounts with a broker
NRE Pins Accounts - In this account, you can buy and sell shares from the secondary market using NRE money. NRE funds represents money that you will be remitting from abroad in INR.
NRE Non Pins Account - In this account, you can buy IPO, Mutual Fund and ETF through NRE funds i.e funds remitted from abroad.
NRO Pins Accounts - Same as above the only difference is that the money can be resident indian money.
NRO Non Pins account - Same as above the only difference is that money used is resident Indian currency.
If you hold shares when you were a resident in India, you cannot transfer these to NRE Pins account. This is not possible. What you can do is as follows:-
Once you become a Non Resident (by status) you will have to open NRE accounts and inform your broker. The broker could (not sure) mark your existing resident account as NRO Pins account and open the remaining three accounts.
The advantage of NRO Pins and Non pins account is that if you have resident money, you could use this to buy shares.
The Pins and Non pins account are needed for reporting purposes.
The best option is to approach your existing broker and seek advise from him with regard to procedure.
Once you have these accounts, you can continue to buy and sell shares from which ever country you are in. Not sure about USA as there are other conditions I think.
Your brokerage will change as you are now an NRI and due to various reporting purposes, the brokerage is different for a resident and a non resident. I am sure you know the tax implication, on NRE accounts for funds received abroad, there is no TDS or Tax but for resident money you will be taxed at a higher rate and TDS will be deducted whether you are within the slab of 2.5 lacks p.a.
Once you settle down, do read about taxation on STCG and LTCG as well. For NRI, the basic exemption limit is not available when computing STCG and LTCG.