Moving countries

Worth settling first

Without a date there are no deadlines — so this is the order the questions are worth answering in, not a countdown.

Start with the first question above. Which direction you are travelling decides the whole list — the two directions share almost nothing — so this stays empty rather than guessing at one of them.

Words you will meet

Every source on this subject assumes you already know these. Here they are in plain English, including the ones that sound alike and behave differently.

• RNORResident but Not Ordinarily Resident

  A transitional status for the first year or two after you move back to India. While it lasts, money you earn outside India generally is not taxed in India. How long you get depends on how much time you have spent in India over the past ten years, and it is fixed by the date you land.

  Often confused: People treat it as an automatic two years. It is not automatic, it is not always two, and it has to be worked out from your own travel history.

• FEMA residencyForeign Exchange Management Act

  The rule that decides what you may do with foreign money and accounts. Under it you become an Indian resident the day you arrive intending to stay — not after any number of days.

  Often confused: The income-tax residency test, which counts days. Two different laws, two different answers, and the same word for both. This is the most common mix-up in the whole subject.

• NRE accountNon-Resident External

  An Indian rupee account funded from money you earned abroad. The balance can be sent back out of India freely, with no annual cap.

  Often confused: NRO. One letter apart, and the difference is whether your money can leave the country without a limit.

• NRO accountNon-Resident Ordinary

  An Indian account for money earned inside India — rent, dividends, a salary. Sending money out of it is capped per financial year and needs paperwork.

• FCNR depositForeign Currency Non-Resident

  A fixed deposit held in a foreign currency rather than rupees, so it does not move when the exchange rate does. Freely repatriable, and it can usually be kept until it matures even after you become a resident.

• RFC accountResident Foreign Currency

  The account you can open once you are a resident again, to keep holding dollars or pounds rather than converting everything to rupees on arrival.

• LRSLiberalised Remittance Scheme

  The annual cap on how much a resident individual may send out of India. It is per person per financial year, so a couple has two.

  Often confused: The separate cap on taking money out of an NRO account, which applies before you become a resident and is a different, larger number.

• DTAADouble Taxation Avoidance Agreement

  The treaty that stops the same income being fully taxed twice. In practice it usually means tax you already paid in one country is credited against what you owe in the other — not that you pay nothing.

• TRCTax Residency Certificate

  Proof from the Indian tax authority that you are an Indian tax resident. Usually needed, along with a form, to get a foreign payer to stop withholding tax at the full default rate.

• W-8BEN

  The form you give a US broker or bank to tell them you are not a US person and to claim the lower treaty rate on dividends. Without it, the default withholding is the full rate.

• Transfer of ResidenceTR

  The customs concession that lets you bring used household goods into India without paying duty, if you have been abroad long enough and are genuinely moving.

• Schedule FAForeign Assets

  The part of an Indian tax return where foreign accounts and investments are listed once you are an ordinary resident. It is a disclosure, not an extra tax — but leaving things off it is treated far more seriously than getting a number slightly wrong.

• FBAR and FATCA

  The mirror image, for somebody moving to the United States: two separate US filings that list foreign accounts, each with its own threshold. Also disclosures rather than taxes, and also penalised out of proportion to the amounts involved.

• Totalisation agreement

  A treaty that lets working years in two countries be added together for state pension purposes. India and the United States do not have one, which is why US Social Security credits cannot be topped up with Indian working years.