The Once-a-Year NRI Portfolio Review: A Structured Checklist You Run Every Year Before 31 March

A reader in Dubai opened his India accounts in February to do his usual year-end tidy-up and found three things at once: his mutual fund KYC had slipped to "on hold" because he never completed the FATCA re-certification the registrar asked for in 2024, two of his folios had no nominee on record, and his equity allocation had drifted to 78% against a 65% target after two strong years. He fixed all of it in an afternoon, but he had been one rejected transaction away from not being able to redeem when he needed the cash, and he had let a full financial year of the Rs 1.25 lakh gains exemption lapse the year before. None of that was bad luck. It was the absence of a routine.

The 30-second answer: Run one structured portfolio review every year, ideally in February so you have weeks before the 31 March year-end. Work through eight checks in order: re-validate KYC and FATCA/CRS with the KRAs (NRIs must reach KYC Validated; the Registered grace window ends 30 April 2026), re-check your own residency (the 182-day test, plus the 120-day RNOR trigger from tax year 2026-27 if Indian income tops Rs 15 lakh), rebalance to target whenever any asset class drifts past a 5-point band, harvest gains and losses before 31 March, review currency exposure, confirm nominations across every account (up to three nominees allowed, mandatory on new accounts from 1 September 2026), check your USD 1 million repatriation headroom, and reconcile TDS against the AIS and Form 26AS.

This guide assumes you already know the basics: what NRE versus NRO means, how Section 115AD taxes your equity gains, and that the USD 1 million cap exists. What follows is the operating manual, the actual sequence I run on my own India portfolio each year and the order that matters, because several of these checks depend on the one before. Get residency wrong and your whole tax view is wrong. Rebalance before you harvest and you waste the exemption. The point of doing this once a year, deliberately, is that the compounding mistakes are the ones nobody notices until a redemption bounces or a refund takes fourteen months.

Do it in February, and do it in this order

The single most common failure is not skipping the review, it is doing it in the last week of March. Equity sell trades in India settle on a rolling basis and a redemption can take a few working days to reflect, so a trade you place on 30 March may not settle in the 2025-26 financial year at all, which defeats the entire point of harvesting before year-end. Give yourself a buffer. February is the right month: the market has had its run, you know roughly where your allocation sits, and you have weeks of runway before 31 March to place trades, get a Section 197 certificate if a large sale needs one, and complete a repatriation if you are using this year's headroom.

The order is not cosmetic. Residency comes first because it determines which rules apply to everything else. KYC and FATCA come next because a frozen folio means you cannot transact at all, so there is no point planning trades you cannot execute. Only then do you rebalance, harvest, review currency, fix nominations, check repatriation headroom, and reconcile TDS. Run them out of order and you will redo work.

Re-check your own residency before anything else

Your residency status is not a permanent badge. It is recomputed every financial year from your physical day count, and it can flip without you noticing. The primary test is unchanged under the Income Tax Act 2025: stay 182 days or more in India in a financial year and you are a resident. Below that you are normally non-resident.

The trap that catches frequent flyers sits in the secondary test. From the 2026-27 tax year, if your Indian-source income exceeds Rs 15 lakh, the threshold that can pull you into Resident but Not Ordinarily Resident status drops to 120 days in the year, combined with 365 days or more across the prior four years. The old number was 60 days, raised to 120 specifically for higher-income NRIs, so the rule is more generous than it used to be, but it still bites. If you have rental income, a chunky dividend year, or large Indian capital gains, your Indian income may quietly cross Rs 15 lakh, and a few extra weeks at home for a wedding or a sick parent can tip you from non-resident to RNOR. RNOR is not a disaster, your foreign income generally stays outside the Indian net, but it changes which ITR form you file and what you disclose. Count your days for the year just gone before you do anything else, and if you are close to a threshold, that is the year to be deliberate about your next trip.

The deeper residency mechanics, including the deemed-residency rule for Indian citizens not taxed anywhere and how RNOR phases into ordinary residence, sit in the residency and RNOR guide. For the annual review you need only the day count and the answer to one question: am I non-resident, RNOR, or ordinarily resident for this year. Write the answer at the top of your review notes, because the next seven checks all read off it.

Re-validate KYC and refresh your FATCA self-certification

This is the check that decides whether you can transact at all, which is why it comes before any trade. NRI mutual fund KYC went through a hard reset. Following SEBI's circular of 20 February 2024, effective 1 August 2024, the KYC Registration Agencies (KRAs such as CAMS-KRA and KFin) introduced tiered KYC statuses, and the one that matters is the move from KYC Registered to KYC Validated. Investors whose KYC was completed with documents that the KRAs could validate against official databases got "Validated" and can transact freely across all fund houses. Those who could not, a large share of NRIs because of foreign addresses and non-Aadhaar-linked details, were marked "Registered", which works only for funds where you already hold units and is on a grace window that runs until 30 April 2026. After that, a Registered NRI may have to re-submit documents for every new AMC, or upgrade to Validated, before fresh transactions go through.

Check your status now. You can look it up on the CAMS-KRA or KFin portals using your PAN and date of birth, and the mutual fund KYC guide walks through the upgrade. The reason this is a once-a-year check rather than once-and-forget is the second half: the FATCA and CRS self-certification. Under the same regime the KRAs must hold a current self-certification from you, declaring your tax residence and tax identification number abroad. If any of that changed in the year, you moved from the UK to the UAE, switched employers and tax jurisdictions, changed your overseas address, or crossed an income band, you must refresh the declaration. Non-submission is not a soft fail; it can result in the folio being put on hold and transactions rejected. The convenient part is that updating FATCA/CRS with one mutual fund through the CAMS-KRA portal propagates across participating funds, so it is one job, not twenty. The same applies to your bank: NRE and NRO accounts carry a FATCA declaration, and banks will ask you to refresh it periodically. Do both in the same sitting.

Rebalance to target, using a 5-point band

Now that you know your status and your accounts are live, rebalance. After two strong equity years almost every NRI portfolio I see is overweight equity relative to its own stated target, which means the investor is carrying more risk than they signed up for without having decided to. Rebalancing is not market timing. It is the discipline of selling what has run and buying what has lagged so your risk stays where you put it.

The standard trigger is a 5 percentage point band around each target. If your plan is 65% equity and 35% debt, you rebalance when equity drifts above 70% or below 60%, not on every monthly wobble. The band is deliberate: it cuts trading costs and, for an NRI, the tax and TDS friction of selling, while still pulling risk back to plan. Annual review plus the 5-point band is the combination most research supports over both calendar-only rebalancing (which trades when nothing has moved) and threshold-only (which can ignore the portfolio for years).

Here is what that looks like with numbers. Take Arjun, a US-based NRI, whose target is 65% equity and 35% debt on an India portfolio that has grown to Rs 1,00,00,000. After a good run, equity is now Rs 78,00,000 (78%) and debt is Rs 22,00,000 (22%). Equity has breached the 70% upper band, so the trigger fires.

To get back to 65/35 on a Rs 1 crore portfolio, target equity is Rs 65,00,000 and target debt is Rs 35,00,000. He needs to sell Rs 13,00,000 of equity and move it into debt. The question is which units to sell, and this is where the NRI-specific layer comes in. Selling Rs 13 lakh of equity that has appreciated will realise a long-term gain taxed under Section 115AD at 12.5% above the Rs 1.25 lakh annual exemption, with TDS deducted by the fund house at redemption. So Arjun does not sell blindly. He sells the lots with the smallest embedded gain first to keep the realised gain low, and he uses the rebalance as the moment to also harvest, which is the next check. Suppose the Rs 13,00,000 he sells carries an embedded long-term gain of Rs 4,00,000. After the Rs 1.25 lakh exemption, Rs 2,75,000 is taxable at 12.5%, about Rs 34,375 plus cess, with TDS withheld at source that he reconciles later against his AIS.

Now the counterfactual that shows why the band beats panic. Had Arjun ignored the drift and let equity ride to, say, 85% before a correction knocked it back, he would have taken the full volatility of an 85% equity book and then likely sold in fear near a low, realising losses or smaller gains and paying transaction friction at the worst time. The 5-point band forced a disciplined Rs 13 lakh trim at a calm moment, locked his risk at plan, and the tax cost of doing it deliberately was a known Rs 34,000-odd rather than an unknown drawdown. The lesson holds across portfolio sizes: rebalancing is cheap insurance, and for an NRI the only twist is to choose your lots so the tax tail does not wag the dog. The full framework for setting the target in the first place is in the asset allocation guide.

Harvest gains and losses before 31 March, in the same trades

Do not separate rebalancing and harvesting into two rounds. They are the same trades viewed two ways, and combining them is how you stop wasting the Rs 1.25 lakh annual long-term equity exemption, which resets every financial year and cannot be carried forward. If you sell nothing in a year, that allowance is simply lost.

Gain harvesting is the move residents and NRIs both underuse. Each financial year you can realise up to Rs 1.25 lakh of long-term equity gains tax-free, then immediately rebuy the same units at the higher cost. You have reset your cost base upward at zero tax cost, so a future sale shows a smaller gain. Over a decade of doing this, you shave a meaningful slice off your eventual tax bill, and for an NRI it is pure upside because the exemption is one of the few equity reliefs you get on the same terms as a resident. The catch is that NRIs, unlike low-income residents, cannot also soak up the basic exemption limit against these gains, so the Rs 1.25 lakh is your whole allowance and you should use all of it.

Loss harvesting is the other side. If part of your portfolio is underwater, selling to book the loss lets you set it off against gains and, where unused, carry it forward for eight assessment years. The rules have real edges for NRIs: a long-term capital loss can be set off only against long-term gains, while a short-term loss can offset either, and you must file your return by the due date to carry losses forward at all. The mechanics, including how the set-off ordering works and the carry-forward filing trap, are in the capital loss set-off guide.

Put it together on one investor. Priya, a UK-based NRI, is rebalancing and finds she will realise a Rs 90,000 long-term gain from her sell-side trim, well inside the Rs 1.25 lakh exemption, so it costs nothing. She also holds a debt-oriented fund showing a Rs 1,50,000 short-term loss. She harvests the loss in the same window, sets Rs 90,000 of it against nothing taxable (the gain was already exempt) and carries the rest forward, having filed on time. Then she tops up her gain harvesting: she sells additional equity lots carrying a further Rs 35,000 long-term gain to fully use the Rs 1.25 lakh allowance (Rs 90,000 plus Rs 35,000), rebuys them, and resets that cost base higher. Had she done none of this, she would have carried the unbooked loss with no return to attach it to and let Rs 35,000 of exemption evaporate. The difference is not dramatic in one year; compounded over the fifteen years she will hold this portfolio, it is real money. The point is that the rebalance, the loss harvest, and the gain harvest are one coordinated set of trades placed before 31 March, not three errands. The broader playbook is in tax-efficient investing for NRIs.

Review your currency exposure, not just your asset mix

This is the check that has no resident equivalent and that almost every NRI under-thinks. Your India portfolio is denominated in rupees, but your liabilities, your retirement, your children's fees, your eventual life, may be in dollars, pounds or dirhams. A 65/35 equity-debt split that looks balanced in rupees can be wildly unbalanced in your home currency once you account for the rupee's long-run drift against the dollar. The rupee has depreciated against the USD over decades, so rupee assets earmarked for a dollar future carry a currency drag that a pure rupee investor never feels.

The annual review is where you ask two questions. First, how much of my total net worth is in rupees versus my spending currency, and is that the split I want given where I will actually live and spend. There is no single right answer; an NRI planning to return to India should hold more in rupees than one who will retire in Canada. Second, am I being paid for the currency risk I am taking. If your rupee debt is yielding 7% but you expect 3 to 4% annual rupee depreciation against your home currency, your real return in home-currency terms is far thinner than the headline, and a comparable home-currency bond might serve the same goal with less risk. You do not need to hedge currency actively, most NRIs should not, but you should size your rupee exposure on purpose rather than by accident. The practical move at review time is to convert your whole India portfolio to your home currency on a single date each year and track that number, not the rupee number, so currency drift cannot hide inside a rising rupee total.

Confirm nominations across every single account

Nominations are the check everyone agrees is important and almost nobody actually does, until a death in the family turns a missing nominee into months of legal grief for the people left behind. As an NRI living thousands of miles away, the cost of an unnominated account falling into succession limbo is higher for your family, not lower, because they may have to navigate Indian probate from abroad.

The rules just got both stricter and easier. From 1 September 2026, every new single-holder demat account and mutual fund folio must either carry a nomination or a formal opt-out declaration; you can no longer leave the field blank. Existing accounts should be brought into line too. The improvements are worth using: you can now appoint up to three nominees per demat account or folio with specific percentage shares, the only mandatory nominee details are name and relationship (PAN, Aadhaar and passport are optional now), and you can modify or cancel nominations as many times as you like. For jointly held accounts nomination remains optional, but I would still set one. Go account by account: each bank account (NRE, NRO, FCNR), each demat, each mutual fund folio, each PPF or insurance policy if you hold them. They are nominated separately, and a nominee on your demat does not cover your bank account. This is twenty minutes of work that spares your family a year of paperwork.

Check your USD 1 million repatriation headroom

If you are accumulating rupee balances in an NRO account that you will eventually want abroad, the annual review is where you decide whether to repatriate this year, because the USD 1 million per financial year limit on NRO repatriation does not roll over. Unused headroom on 31 March is gone; you start fresh on 1 April. An NRI sitting on a large rupee corpus who waits five years for "one big transfer" will breach the cap and need RBI approval, whereas the same person moving funds in annual tranches stays inside the limit comfortably.

The mechanics changed shape in 2026 and the names will confuse you. Each repatriation from NRO needs Form 15CA (your declaration) and Form 15CB (a chartered accountant's certificate that the tax due on the remitted amount has been paid). Under the Income Tax Act 2025, effective 1 April 2026, these are renamed Forms 145 and 146 respectively, but the substance is the same: a CA verifies the tax position before the bank releases the funds. There is no RBI approval needed up to USD 1 million; the bank processes it on the strength of the forms. The decision at review time is simply whether you have rupee funds you want abroad and headroom to move them, and if both are yes, to start the CA certificate process early because it takes time. The interplay with which account holds what, and why funds sitting in NRE are already freely repatriable while NRO funds need this drill, sits in the broader investments hub.

Reconcile your TDS against the AIS and Form 26AS

The last check closes the loop on every trade you just made. When you redeemed equity, sold property, earned NRO interest or received a dividend, tax was deducted at source, and the only way to be sure you get credit for all of it, and to catch over-deduction, is to reconcile against the two statements the Income Tax Department maintains against your PAN. Form 26AS is the narrow one: it now shows only TDS, TCS and tax-payment data (and is being renamed Form 168 from the 2026-27 tax year). The Annual Information Statement (AIS) is the wide one: it captures the full universe of reported transactions, your interest, dividends, capital gains, foreign remittances and high-value transactions, with the Taxpayer Information Summary (TIS) as its condensed feed into your pre-filled return.

For an NRI the reconciliation is not optional housekeeping, it is where money gets recovered. Two failure modes are common. First, TDS shows in 26AS but at a figure higher than your actual liability, the classic over-deduction on property and off-market deals where the buyer withheld on the whole sale value instead of the gain; you only get that back by filing and claiming it. Second, the AIS reports a transaction wrongly, a redemption double-counted, a gain miscomputed, an interest figure inflated, and if you file on the AIS figure without checking, you overpay or invite a notice. The fix is built in: the AIS has a feedback mechanism, so where an entry is wrong you mark it (duplicate, not mine, incorrect amount) and the corrected view flows into your return. Do this reconciliation before you file, not after, because unwinding a wrong filing is far more work than getting it right once. The full walk-through of reading these statements as an NRI, including which TDS section codes to expect against which income, is in the Form 26AS and AIS guide.

The annual review checklist

Run this top to bottom each year, in February. The order is the dependency order.

#	Check	What you are confirming	Watch out for
1	Residency	Your status for the FY from day count	182-day test; 120-day RNOR trigger from TY 2026-27 if Indian income tops Rs 15 lakh
2	KYC status	KYC Validated, not just Registered	Registered grace window ends 30 April 2026
3	FATCA/CRS	Self-certification current with KRAs and banks	Refresh if tax residence, address or income band changed; non-submission freezes folios
4	Rebalance	Allocation back to target	Trigger at a 5-point drift; sell lowest-gain lots; place trades before 31 March
5	Harvest	Rs 1.25 lakh gain exemption used; losses booked	Exemption does not carry forward; file on time to carry losses forward
6	Currency	Rupee exposure sized for your spending currency	Track the portfolio in home currency, not just rupees
7	Nominations	Every account, demat and folio nominated	Up to 3 nominees; mandatory on new accounts from 1 September 2026
8	Repatriation	USD 1M headroom used if you need funds abroad	Does not roll over; Forms 15CA/15CB (145/146 from 1 April 2026)
9	TDS reconcile	AIS, TIS and 26AS match your records	Over-deduction recoverable only by filing; flag wrong AIS entries via feedback

Edge cases

You changed tax-residence countries mid-year. A move from, say, the UK to the UAE during the financial year complicates two checks at once. Your FATCA/CRS self-certification must be updated to the new jurisdiction, and your treaty position changes: the India-UAE treaty can take your share gains to zero, which the UK treaty does not, so a sale timed after your UAE move may be taxed very differently. If you are mid-move, get the residency and treaty position settled before you place rebalancing trades, because the timing of a sale around the move date can swing the tax materially.

Your portfolio is below the rebalancing band but you still have harvesting room. Rebalancing and harvesting are independent triggers. Even if no asset class has drifted past 5 points, you should still run the gain harvest to use the Rs 1.25 lakh exemption, because that allowance lapses regardless of whether you rebalance. Do not skip the harvest just because the allocation is on target.

You are RNOR this year. If your day count pushed you into RNOR, your foreign income is generally outside the Indian net but your Indian income and gains are fully taxable, and your ITR form changes. RNOR is also a planning window worth using deliberately if you are in the process of returning to India; the residency guide covers how to sequence asset sales across the RNOR years before you become ordinarily resident and your global income comes into scope.

A large property sale is in the rebalance. If part of your year-end activity is selling Indian property, do not treat it as a routine rebalancing trade. The buyer must deduct TDS under Section 195 and often over-withholds on the full sale value, locking up lakhs. Apply for a Section 197 lower-deduction certificate weeks before the sale, which is exactly why the review belongs in February, not late March.

The closing read

The honest read is that the value of this review is almost entirely in the doing it on schedule, not in any one clever move inside it. The NRIs who get hurt are not the ones who picked the wrong fund; they are the ones whose KYC quietly lapsed, who let three years of the gains exemption evaporate, who never nominated a folio, or who discovered a frozen account the week they needed cash. So for most NRIs the recommendation is simple: block a February afternoon every year and run these nine checks in order, residency first because everything reads off it, KYC second because a frozen account makes every other plan moot, then rebalance and harvest as one coordinated set of trades placed with settlement runway before 31 March. Track your portfolio in your home currency, not rupees, so currency drift cannot hide. Repatriate in annual tranches if you are building a corpus you will want abroad, because the USD 1 million cap does not wait. The exception who should not just self-serve this is the NRI with a large property sale, a mid-year country change, or a residency status sitting right on a threshold: those three are worth a CA's hour, because the cost of getting them wrong dwarfs the fee. Everyone else: it is a checklist, run it.

Related guides

• NRI portfolio asset allocation
• Tax-efficient investing for NRIs
• NRI mutual fund KYC
• Form 26AS and AIS for NRIs
• Capital loss set-off and carry-forward for NRIs
• NRI residency and RNOR rules
• All Investments guides
• All Taxation guides

This guide is educational and general in nature. It is not individual investment or tax advice. Repatriation limits, KYC rules, nomination deadlines and residency tests changed in 2024 to 2026 and several take effect under the Income Tax Act 2025 from 1 April 2026, so confirm the current position and your specific situation with a qualified chartered accountant or SEBI-registered adviser before you act.