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Who qualifies as a Non-Resident
Indian (NRI)?
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An NRI is a person resident outside India who is a citizen of India or is a person of Indian origin.
Under the Foreign Exchange Management Act (FEMA), generally, a person is resident outside India if he is in India for less than 182 days during the course of the preceding financial year and also includes any person who stays abroad.
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A person who has gone out of India or who stays outside India for any of the following:
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Taking up employment
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Business or vocation
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Any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period
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Indian citizens working abroad on assignments with foreign Governments/Government agencies or international/regional agencies like the UNO, IMF, World Bank etc.
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Officials of Central and State governments and Public Sector Undertakings deputed abroad on temporary assignments or posted to a Branch/Office (including diplomatic missions) abroad
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Indians settled abroad permanently
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Indians gone abroad on immigration
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Crew members of Indian nationality or Indian origin employed by foreign airlines/shipping companies, if they are based at foreign ports and reside abroad
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For education,
"provided the student has stayed overseas for more than 182 days in the preceding financial year."
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Under the Income tax Act, an individual is resident in India in a year if he:
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is in India for at least 182 days or;
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is in India for 365 days or more in the 4 years preceding that year and is in India for 60 days or more in that year.
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In other cases, the individual will be a non-resident under the Income-tax Act.
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Who is a person of Indian
origin?
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You are a person of Indian origin if have at any time held an Indian passport,
or either of your parents or any of your grandparents were citizens of India by
virtue of the Constitution of India or the Citizenship Act, 1955 or are the
spouse of an Indian citizen or of a person of Indian origin (other than of
Pakistan or Bangladesh) and are now a foreign citizen (other than of Pakistan
or Bangladesh).
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What is an Overseas Corporate
Body (OCB)?
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Overseas Corporate Bodies are predominantly owned by individuals of Indian
nationality or origin, residing outside India, and are inclusive of overseas
companies, partnership firms, societies and other corporate bodies which are
owned directly or indirectly to the extent of at least 60% by NRIs. OCBs also
include overseas trusts in which at least 60% of the beneficial interest is
irrevocably held by such persons.
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Are OCBs required to produce any
certificate regarding ownership/beneficial interest in them by NRIs?
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Yes. In order to establish that the ownership interest or beneficial interest
in any OCB is held by individuals of Indian nationality / origin, they are
required to furnish a certificate from an overseas auditor / chartered account
/ certified public accountant in a 'Form OAC' where the ownership beneficial
interest is held directly by NRIs. The same formalities apply in case the
ownership beneficial interest is held indirectly by NRIs. Here they require to
submit 'Form OAC 1'.
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What are the various investment
opportunities in India available to NRIs?
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If you are an NRI, the following investment opportunities are open to you:
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Maintenance of bank accounts in India
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Investment in securities/shares and deposits of
Indian firms/companies
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Investment in immovable property in India
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Investment in Mutual Funds in India
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What types of accounts can I
open?
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As an NRI, you can open the following types of accounts:
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Non-Resident External (NRE)
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Non-Resident Ordinary (NRO)
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Foreign Currency Non-Resident (FCNR)
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In what currency can these
accounts be maintained?
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As an NRI, you can open the following types of accounts:
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Non-Resident Ordinary (NRO)
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Under this scheme you can open Rupee Checking
Accounts, namely Rupee Savings Account or Rupee Current Account, and Rupee
Fixed Deposit accounts. This account will be maintained in Indian Rupees.
Credits to your NRO account are restricted to legitimate dues in India and
foreign inward remittances. Only the interest on these accounts is
repatriable.Income Tax of 30% is applicable on the Interest Earned.
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Non-Resident External (NRE)
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Under this scheme you can open Rupee Checking
Accounts, namely Savings Account and Current Account, and Rupee Fixed Deposit
accounts. This account will be maintained in Indian Rupees.
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Foreign Currency Non-Resident (FCNR-B)
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Under this scheme you can open Fixed Deposit
Accounts in USD, GBP & EURO,
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Can I open these accounts with
any Bank in India?
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No. Only those banks holding an Authorised Dealers' License or banks specially
authorised in this regard by the Reserve Bank of India are permitted to open
these accounts on behalf of NRIs.
You can open an account with ING as we have an Authorised Dealer
status.
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Can I open these accounts in any
convertible currency?
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Yes, you can remit funds for opening the account in any convertible currency.
However, in the case of NRO / NRE, the remitted funds will be converted into
Indian Rupees at the spot exchange rate. These accounts will be maintained in
Rupees.
In the case of FCNR accounts, you can remit the funds in any convertible
currency. These accounts will be maintained in the currency of your choice i.e.
USD, GBP, EURO, JPY, AUD and CAD.
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What is the minimum amount with
which I can open an account?
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NRO - Savings Account
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Rs.5,000/-
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NRO - Current Account
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Rs.10,000/-
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NRO - Term Deposit Account
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Rs.10,000/-
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NRE - Savings Account
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Rs.5,000/-
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NRE - Current Account
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Rs.10,000/-
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NRE - Term Deposit Account
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Rs.10,000/-
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FCNR - Term Deposit Account
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USD 500/- or its equivalent in GBP or Euro
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Can I transfer funds from my
existing NRE/FCNR Accounts to open NRO Accounts?
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Yes,
you can.
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If I'm visiting India, can I use
Travelers Cheques or Currency to open an account or credit my existing NRE
Account?
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Travelers Cheques can be used to credit/open the account. NRIs bringing
Foreign Currency Notes & Travelers Cheques will have to submit a Currency
Declaration Form (CDF) to the customs authorities on arrival in India if the
foreign currency notes exceed USD 5,000/- or Travelers Cheques and notes
exceed USD 10,000/-. You must produce the CDF for endorsement by the bank when
you submit the money for opening/credit to an account.
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What is the frequency of
Interest payment on my accounts?
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NRO – Savings Account
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Half yearly
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NRO - Term Deposit Account
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Quarterly
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NRE - Savings Account
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Half yearly
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NRE - Term Deposit Account
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Quarterly
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FCNR - Term Deposit Account
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Half-yearly
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If you choose the reinvestment scheme, Principal & Interest will be payable on maturity. However, you get the advantage of a higher effective yield on maturity.
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Under which accounts can I avail
of a cheque book / ATM card facility?
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You can avail of a cheque book / ATM Card facility with an NRO - Savings
Account & Current Account as well as an NRE - Savings Account & Current
Account.
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What are the admissible debits
& credits to NRO Accounts?
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Debits are allowed freely
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Funds representing legitimate dues of the account
holder from local sources and proceeds of remittances received from abroad
through normal banking channels are credited freely.
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What are the permissible
debits/credits to the NRE/FCNR Accounts?
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Debits are allowed freely, however debits for
investments in Shares/securities/commercial paper of Indian companies or for
purchase or immovable property in India should be covered by general/specific
permission of RBI.
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Credits to an account, through funds from a local
source would be permissible only if the funds are repatriable.
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Also, proceeds of remittances received from abroad
in freely convertible currency through normal banking channels may be credited
freely
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Traveler’s Cheques or foreign currency tendered by
the account holder during his temporary visit to India.
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Interest / Maturity Proceeds of Government
securities including National Savings Certificates, dividends of Unit Trust of
India, provided these securities were purchased out of funds from NRE / FCNR
Accounts.
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Can I give a Power of Attorney
to a Resident Indian to operate my Non-Resident Accounts?
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A Power of Attorney is given only for operating
the account & not for opening the account. Further, the operations are
restricted only for making legitimate local payments.
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The Power of Attorney can make payments for the
purpose of making investments on behalf of the NRI.
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Under no circumstance is the Power of Attorney
holder allowed to repatriate the funds abroad or make payments or gifts on
behalf of the non-resident account holder.
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Can Power of Attorney Holders
credit proceeds of foreign currency notes / bank notes & Travelers cheques
to the NRE Accounts?
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No
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What is the exchange risk that
I'm exposed to under the different accounts?
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Since accounts under the NRE scheme are held in Rupees, you will bear the
exchange risk if the Rupee depreciates and if you want to make an outward
remittance.
In the case of FCNR schemes , this account is maintained in the currency of
your choice (USD, GBP, EURO, JPY, AUD & CAD), therefore you will not bear
any exchange risk.
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Can I repatriate money out of balances held in my NRO accounts?
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Interest earnings can be repatriated. In addition to this, remittance/s up to USD 1 million per calendar year from balances in NRO accounts subject to payment of applicable taxes is allowed for any purpose up to an aggregate value of USD 1 million:
The documents required to be produced for effecting a remittance are:
1. Account holder's Letter giving details of purpose of remittance and certifying the same
2. Cheque or debit authority if the same is not contained in the letter in item (i)
3. Application in Form A2
4. A certificate from a Chartered Accountant
5. FEMA Declaration to be filled in by the NRI
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Can I repatriate money from my Property and Investment Income?
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All forms of current income arising out of investments in India are repatriable. This includes income by way of interest, dividends, rentals, etc. Current income is repatriable even if the asset generating the income itself is not.
There is no ceiling on the value of such remittances and the amounts are remitted out of the NRO Account based on the following documents: The documents required to be produced are:
1. Account holder's Letter instructing the remittance
2. Copy of document/s establishing the inheritance and value of proceeds credited to the NRO account
3. Chartered accountant's certificate in the format prescribed by IT authorities
4. Cheque or debit authority if the same is not contained in the letter in item (i)
5. Application in Form A2
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Can I repatriate money from the Sale Proceeds of my Immovable Property?
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There are fairly liberal provisions relating to remitting overseas, proceeds arising from sale of properties in India. These provisions can be considered under three categories:
• Property acquired by the Non Resident after becoming a non-resident and out of either remittances from abroad or from NRE and FCNR deposits held with banks. The extent of remittance is restricted to the amount of repatriable funds used to acquire the property. Further the facility is restricted to two properties
The documents required to be produced are:
o Account holder's Letter giving details of purpose of remittance and certifying the same
o Copies of sale deeds or other property ownership document evidencing the acquisition and sales consideration
o Evidence that the acquisition was from repatriable sources (inward remittance certificate and/or certificate that the payment was made from NRE/FCNR deposits)
o Cheque or debit authority if the same is not contained in the letter in item (i)
o Application in Form A2
o Chartered accountant's certificate in the format prescribed by IT authorities
• Sale proceeds of immovable properties held by NRIs/PIOs can be remitted along with other remittances allowed out of NRO accounts mentioned earlier in the note subject to a value ceiling of USD 1,000,000 per financial year (April-March)
The documents required to be produced are:
o Account holder's Letter giving details of purpose of remittance and certifying the same
o Copies of sale deeds or other property ownership document evidencing the holding of the property for ten years and the sale consideration
o Cheque or debit authority if the same is not contained in the letter in item (i)
o Application in Form A2
o Chartered accountant's certificate in the format prescribed by IT authorities
• Property acquired by inheritance as an NRI can be remitted along with other remittances allowed out of NRO accounts mentioned earlier in the note Requirements subject to a value ceiling of USD 1,000,000 per financial year (April-March): The documents required to be produced are
o Account holder's Letter giving details of purpose of remittance and certifying the same
o Copy of document/s establishing the inheritance and sale proceeds of property credited to the NRO account
o Cheque or debit authority if the same is not contained in the letter in item (i)
o Application in Form A2
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Can I repatriate money from Inheritances?
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Inheritance proceeds of Assets other than property can also be remitted by an NRI along with other remittances allowed out of NRO accounts mentioned earlier in the note subject to a value ceiling of USD 1,000,000 per financial year (April-March) The documents required to be produced are:
1. Account holder's Letter giving details of purpose of remittance and certifying the same
2. Copy of document/s establishing the inheritance and value of proceeds credited to the NRO account
3. Cheque or debit authority if the same is not contained in the letter in item (i)
4. Application in Form A2
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Can I repatriate money from other Investments?
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Non Resident Indians are allowed to invest in most options that are open to Resident Indians. Proceeds of such investments can be repatriated from India provided:
• The investment is made from repatriable funds i.e. remittance from abroad or from NRE/FCNR accounts
• General or specific RBI approval exists
• Capital Gains tax wherever applicable is paid or provided for
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Can I open a joint account?
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| NRO |
Yes |
Yes |
| NRE |
No |
Yes |
| FCNR |
No |
Yes |
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What taxes may I be liable to pay if I have an NRI Account?
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| NRO |
Yes -30% plus surcharge (30.9%) |
No |
| NRE |
No |
No |
| FCNR |
No |
No |
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If I hold any NRI account with a
Resident Indian, will the Resident Indian be exposed to tax obligations?
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No. The Resident Indian is not exposed to any tax obligations.
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Can I nominate an Indian
Resident or an NRI?
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Yes, you can nominate an NRI or an Indian Resident subject to the following
conditions:
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Funds held in the NRO cannot be repatriated by the
non-resident nominee & will be credited to the nominee's NRO account.
Application from a resident nominee for remittance of funds outside India for
meeting the liabilities of any of the deceased Account Holders or for similar
purposes should be forwarded to the Rerserve Bank of India.
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In the case of a resident nominee, the funds held
in the NRE/FCNR account can be repatriated subject to prior specific RBI
permission.
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Can I avail of loans against my
non-resident deposit accounts?
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Yes. You can avail of loans against your NRO/NRE/FCNR Deposits, the
loan/overdraft can be used for personal purposes or for carrying on Business
activities other than 1) Relending 2) Agricultural/Plantation activities 3) Real
Estate Business.
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Can I transfer funds between
NRE Accounts?
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Yes. Transfer of funds from NRE Accounts maintained by two different persons
may be allowed for bonafide personal purposes such as personal expenses,
education of children, and gifts.
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Can I break my deposit before
the maturity period?
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Yes, you can break your deposit before the maturity period. NRE Deposits booked
on or after 1st May 2003 will qualify for interest only if they have run for a
minimum period of 12 months. NRO Deposits would qualify for interest only if
they have run for a period of 15 days, FCNR deposits will qualify for interest
only if they have run for a 1 year period.
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Can my deposits with the bank
be automatically renewed on maturity?
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If the customer leaves renewal instructions, the deposit will be renewed at
maturity in accordance with the instructions. In the absence of any
instructions, we will roll over principal & interest for the same period at
the rates prevailing on the date of maturity.
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Are there any facilities
available for returning Indians?
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Returning Indians can avail of the following facilities:
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Maintenance of assets abroad: An NRI, who
has stayed abroad continuously for at least one year, is permitted to maintain
his investments in bank deposits, shares, securities, business and immovable
properties abroad.
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Eligibility to open a Resident Foreign Currency
Account (RFC): NRIs returning permanently, after a continuous stay of
minimum one year abroad, can open Resident Foreign Currency Accounts with banks
in India.
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What is the Resident Foreign
Currency Account Scheme?
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This is a scheme permitting persons of Indian nationality or origin who have
returned to India for permanent settlement (Returning Indians) after being
resident outside India for a continuous period of not less than one year, to
open foreign currency accounts against the proceeds held in NRE/FCNR accounts
of Funds remitted from abroad.
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What types of accounts can I
open under RFC scheme?
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You can open Current, Savings and Fixed Deposit Accounts under the RFC scheme.
However you will not be given a cheque book facility, on the RFC
Savings/Current Account.
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In which currency can I maintain
RFC accounts?
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RFC accounts can be maintained in any permitted currency such as USD, GBP, JPY,
EURO etc.
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What is the frequency on
interest payment on RFC Savings & Deposit Accounts?
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The frequency of interest payments on RFC Savings & Deposit Accounts is half yearly.
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Is there a nomination facility
available for RFC Accounts?
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For Non-Resident nominees, funds can be remitted abroad to the extent of their
entitlement if on the date of the account holder's death such nominees are
residing outside India. If the nominee is residing in India on the date of
death of the account holder, then the equivalent amount will be paid to him in
Indian Rupees.
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What funds can be credited to
RFC Accounts?
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The entire amount of foreign exchange assets
acquired or held while he was resident outside India. This could be in the form
of deposits in banks outside India, investments in foreign currency, shares and
securities or immovable properties situated outside India or investments in
business etc. outside India. It includes foreign exchange earnings through
employment, business or vocation outside India commenced by the NRI while he
was resident outside India.
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Also, all balances standing to the credit of their
NRE/FCNR Accounts at the time of return can be credited to RFC Accounts.
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NRIs bringing Foreign Currency Notes &
Traveller's Cheques will have to submit a Currency Declaration Form (CDF) to
the customs authorities on arrival in India if the foreign currency notes
exceed USD 5,000/- or Traveller's Cheques and notes exceed USD 10,000/-. You
must produce the Currency Declaration Form for endorsement by the bank when you
submit the money for opening/credit to an account.
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Can income received from my
overseas assets in the form of dividends etc, or sale of proceeds of such
assets be credited to RFC Accounts?
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Yes
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Can my pension from abroad be
credited to my RFC Account?
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Yes
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Can funds held in the RFC
Accounts be remitted abroad?
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Funds in RFC Accounts can be remitted abroad for any bonafide purpose of the
account holder.
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Can funds from RFC Accounts
be utilised for local payments?
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Yes. The amount will be converted and credited to the customer’s resident a/c.
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Can NRIs invest their funds in
government securities or units of Unit Trust of India?
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Yes.
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Are NRIs allowed to invest in
Public Provident Fund ie PPF, National Saving Certificates(NSCs) and Post
Office Savings Bank?
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No. NRIs are not permitted to invest in PPF, NSCs and Post Office Savings
Schemes.
However investments made by a resident (in PPF, NSCs or Post Office Savings
scheme),who subsequently becomes NRI may continue to be held upto its maturity
on a non-repatriation basis.
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Is permission of Reserve Bank
required for NRIs to invest in proprietary/partnership concerns on
Non-Repatriation basis?
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No
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Is permission of Reserve Bank
required for making investments in new issues of shares/debentures of Indian
companies on Non-Repatriable basis?
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No
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Can NRIs make investment in
non-convertible debentures of Indian companies?
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Yes
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Can NRIs purchase shares of
Indian companies through a private arrangement?
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Yes. However, the company offering shares for subscription must seek RBI
permission to allot shares through a private arrangement to the NRI.
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Can an NRI invest in immovable
property?
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Non-resident Indian citizens can freely purchase and sell residential and
commercial properties in India. Foreign citizens need to obtain RBI's
permission for the same. However, a foreign citizen of Indian origin need not
obtain RBI's permission for purchasing and selling residential and commercial
properties (other than agricultural/plantation land and farm houses) for
bonafide purposes, provided these purchases are met out of foreign exchange
funds.
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Can an NRI invest in Mutual
Funds?
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Yes, an NRI can invest in Mutual Funds. However in the case of Money Market
Mutual Funds, the investments will be on a non-repatriable basis.
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Do NRIs need RBI permission to
invest in Mutual Funds?
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No , NRIs can invest & redeem units in Mutual Funds without prior
permission from RBI. Contact ING for further details.
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How do I invest in Mutual Funds?
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You can invest by issuing a cheque against your NRO/NRE Accounts. If you invest
from funds in your NRE/FCNR Accounts then you will be able to repatriate income
on Mutual Fund earnings abroad.
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Is any prior specific permission
required from RBI for investment in Company deposits of Indian Companies?
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No
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What is the maximum maturity
period of these company deposits?
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Company deposits for NRIs have a maximum maturity of 3 years.
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Can I invest in Company
Deposits with repatriation benefits?
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Yes, you can invest in company deposits with repatriation benefits.
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How do I invest in Company
Deposits?
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The amount can be remitted through normal banking channels or by debiting your
exisitng NRE/FCNR Accounts.
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