Change Of Tax Status For Existing Clients

Can a Resident Individual modify his Tax Status to Non Resident Indian ?

Yes, tax status can be modified to NRI from RI or vice versa, subject to fulfillment of Income Tax Act ,1961 explained in chapter :Definitions & Basic Information, question number 5.

How can a client change tax status from individual to NRI or vice versa in an E-wealth account?

Please find below process to change the tax status from individual to NRI or vice versa in E-Wealth account,

  1. Client needs to first change the tax status in KYC records. (Refer KYC change form for document checklist mentioned in Chapter-2 Question-9)
  2. Clients should have a new Bank account. (E.g NRE / NRO / Saving bank account)
  3. Partner needs to submit a physical form or E-form for E-Wealth account opening with new tax status with all the required documents to the nearest NJ branch.
  4. Also, the client needs to submit the Account Closure form of the previous E-Wealth account for which securities in holding should be NIL. If units live in an old E-Wealth account, the client needs to submit DIS (Delivery Instruction Slip) to transfer the units in the new E-Wealth account.

The request shall be processed in T+7 working days from the date received at HO. So old E-Wealth will be closed and a new E-Wealth account with the new tax status will be activated as per investor’s request.

Note:

  • Off market transfer requests from Individual to NRE accounts are not allowed. In such a case, client can submit Rematerialization request (demat to physical) or redeem the same.
  • Clients can not have two E-Wealth accounts in both tax status (NRI & Resident Individual) at a time.
  • Clients having the units under lockin period will not be able to request the OFF Market transfer from Resident Individual Account to any NRI(NRE/NRO) status. Such units should be converted to an offline mode first by submitting Rematerialization request.

Video instruction for Change of Tax Status – Video Location Partner Desk –> E – Publications –> Digital Video Gallery –> Desk Videos –> NRI DESK

What will be the impact on the investment of a client,if the tax status changes from RI to NRI ?

 Even after change in status from RI to NRI the client can continue to hold the securities which he/she had purchased as a resident Indian, on a non-repatriable(NRO)basis.

 Is there any capital gain if anyone changes tax status from RI to NRI and Vice-Versa?

No, incase of any client has changed to Non resident of india (NRI) from resident indian or vice-versa, there will be no capital gain tax applied at the time of transferring all the holding from old tax status to the new tax status.

In case of any tax status change cases in NJ E Wealth, is it possible to transfer the close ended Mutual Funds like ELSS into a new E Wealth account?

Clients having the units under lockin period will not be able to request the OFF Market transfer from Resident Individual Account to any NRI(NRE/NRO) status. Such units should be converted to an offline mode first by submitting Rematerialisation request.

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