Hello folks! Mani here. The guy who thought financial planning for return to India meant “convert all dollars to rupees and hope for the best.”
I moved back in 2017. My financial plan was written on a napkin. During turbulence. With a crayon. It showed.
Let me save you from my spectacular money mistakes.
The 90-Day Money Plan: Your Financial Landing Gear 🛬
Your first three months need a plan. I had no plan. I had hopes. Dreams. Delusions.
I thought my bank accounts would open instantly. They did not. I thought my investments would transfer seamlessly. They did not. I thought my credit history would follow me. It really did not.
| Task | Timeline | Reality Check | My Experience |
|---|---|---|---|
| Bank Account Setup | First week | 3-4 weeks with KYC | Took 37 days and 4 branch visits |
| Emergency Fund Setup | Week 2-3 | Often delayed by transfers | Used credit cards while waiting. Bad idea |
| Credit Building | Month 2-3 | Starting from zero | My US 800+ score became Indian zero |
I used international credit cards for first month. Paid foreign transaction fees. Those fees alone could have funded a nice vacation. Instead they funded bank profit margins.
The Housing Dilemma: Rent or Buy? 🏠
Everyone has opinions about property. Everyone. My Uber driver. My vegetable vendor. Random people at family functions.
“Real estate always goes up.” “Property is best investment.” “Renting is waste of money.” I heard it all. Believed it all. I was wrong.
| Option | 5-Year ROI (2018-2023) | Hidden Costs | My Housing Adventure |
|---|---|---|---|
| Buy Immediately | 3-5% in major cities | Property tax, maintenance, society fees | Bought immediately. Regretted immediately |
| Rent 2-3 Years Then Buy | Saved 15-20% on purchase price | Rent payments, moving costs | What smart people did |
| Rent Long Term | More liquidity and flexibility | No wealth building | Not considered because “log kya kahenge?” |
I bought property within two months of return. At market peak. In area with excess supply. Using housing loan at higher interest rate due to no credit history. Created personal case study in what not to do.
Credit Score: Starting From Zero 📉
Your amazing foreign credit score becomes zero in India. I learned this while applying for credit card. The bank staff actually laughed.
I showed my US credit report proudly. 810 score. Bank officer said “This is very impressive sir. For America. Here you have no score.”
| Credit Building Method | Timeline to Decent Score | Success Rate | My Credit Journey |
|---|---|---|---|
| Secured Credit Card | 6-8 months | High | Discovered this option months too late |
| Small Personal Loan | 10-12 months | Medium | Took loan I didn’t need just for history |
| Regular Bill Payments | 12+ months | Slow but steady | Autopay everything now |
My first credit card had ₹50,000 limit. I used to have cards with limits higher than my annual salary. Financial humbling experience.
Investment Portfolio Restructuring 📊
Your investment strategy needs complete overhaul. I kept US-focused thinking. For Indian reality.
| Investment Type | India Returns (2018-2023) | US Returns (Same Period) | My Portfolio Mistakes |
|---|---|---|---|
| Equity (Index) | Nifty50: 15% annually | S&P500: 12% annually | Kept too much in US accounts |
| Real Estate | 3-6% in major cities | 5-8% in major markets | Overinvested based on relatives’ advice |
| Fixed Income | 6-7% FDs, 7-8% debt funds | 2-3% treasuries/CDs | Ignored tax implications |
I maintained investment accounts across countries. Created tax nightmare spanning continents. My CA charges premium rates for my “unique international situation.” I funded his children’s education.
Cash Flow Management: The Two-Currency Problem 💵
Managing money in two currencies is complex. I created new level of complexity through poor planning.
| Management Approach | Cost | Effectiveness | My Money Movement Chaos |
|---|---|---|---|
| Consolidated Regular Transfers | 0.5-1% fee | High | Did exact opposite with random transfers |
| Currency Hedging Strategy | Varies | Medium | Learned this existed after major losses |
| Multi-Currency Account | Annual fees | Medium | Discovered these existed one year too late |
I made random transfers whenever exchange rate looked “good.” No strategy. No planning. The rate always looked better next week. Always. Currency traders probably used my transfer timing to make opposite moves.
Insurance Needs: Total Reset Required 🏥
Your insurance needs complete overhaul. I discovered this during medical emergency. Worst possible timing.
| Insurance Type | Indian Requirement | US Policy Validity | My Insurance Gaps |
|---|---|---|---|
| Health | Minimum ₹50 lakh family cover | Usually invalid | Had zero coverage for 4 months |
| Term Life | 10-15x annual income | May remain valid but complicated | Maintained US policy with currency mismatch |
| Property | Reconstruction cost | Invalid for Indian property | Discovered requirement after water damage |
I had major surgery three months after return. With no health insurance. Still making payments. That mistake alone could fund small car. Instead funded hospital expansion wing probably.
Taxes: The Two-Country Tangle 🧾
Tax filing becomes complex. I learned this through expensive tax notices. From both countries.
| Tax Aspect | Requirement | Complexity Level | My Tax Adventures |
|---|---|---|---|
| FBAR Filing (US) | Required for accounts over $10,000 | High | Missed filing first year. Paid penalties |
| Schedule FA (India) | All foreign assets | Very High | Discovered requirement after deadline |
| DTAA Benefits | Requires proper documentation | Extreme | Paid double tax because didn’t understand forms |
I missed FBAR filing deadline first year. Received notice from FinCEN. Had to Google what FinCEN was. Then panicked. Then filed late. Then paid penalties. Financial education through fear and fines.
Retirement Account Strategy 🧓
Retirement planning spans countries. I had no strategy. Just confusion.
| Account Type | Best Approach | Common Mistake | My Retirement Chaos |
|---|---|---|---|
| 401k/IRA | Usually best to maintain | Early withdrawal with penalties | Actually got this right somehow |
| NPS in India | Good for tax benefits | Starting too late | Discovered this existed 2 years after return |
| EPF in India | Mandatory with employment | Missing employer matching | Had gap months with no contributions |
I discovered NPS two years after return. Calculated lost tax benefits. That amount could fund nice international vacation. Instead funded higher tax payments.
Estate Planning: The International Puzzle 📜
Estate planning becomes complex with assets in multiple countries. I ignored this completely. Created potential disaster for family.
| Planning Element | Requirement | My Planning Failure |
|---|---|---|
| Indian Will | Separate from foreign will | Didn’t create for 3 years |
| Nomination Updates | Required for all accounts | Discovered some still had ex-girlfriend as nominee |
| Foreign Asset Handling | Country-specific rules | No planning whatsoever |
I maintained outdated nominations on accounts. Had ex-girlfriend as nominee on mutual fund. Discovered during random document check. Narrowly avoided awkward future situation for my wife.
Final Thoughts From a Financial Disaster Recovery Expert 🧠
Financial planning for return to India requires strategy. Actual strategy. Not my approach of “figure it out when we get there.”
I went from financial chaos to financial stability. Eventually. After making enough mistakes to write “What Not To Do With Your Money” bestseller.
Start planning before return. Maintain organized documents. Get expert advice.
And remember: The financial mistakes you avoid are your best return on investment. Unlike me who collected financial mistakes like rare stamps.
Got questions about financial planning for return? Drop them in comments. My expensive mistakes are your free education.
Sources and Helpful Links:
- Reserve Bank of India – Returning Indian Guidelines: https://www.rbi.org.in/Scripts/FAQView.aspx?Id=100
- FEMA Regulations for Returning Indians: https://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx
- Income Tax Department – Foreign Asset Declaration: https://www.incometaxindia.gov.in/Pages/international-taxation/foreign-assets.aspx
- IRDAI Insurance Guidelines: https://www.irdai.gov.in/ADMINCMS/cms/NormalData_Layout.aspx?page=PageNo4172
- Back to India Movement Financial Guide: https://backtoindia.com/financial-guide
- NPS Official Portal: https://www.npscra.nsdl.co.in/