Yes. In order to establish that the ownership/beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body/trust is required to initially furnish a certificate from an overseas auditor/chartered accountant/certified public accountant fulfilling the eligibility criteria of OCB in form OAC where the ownership/beneficial interest is directly held by NRIs, and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees. Thereafter a simple certificate signed by the Managing Director or Chief Executive Officers of the OCB on the lines indicated above may be submitted.

Note: In the case of closely held OCBs (i.e. where shareholders belong to the same family or are closely related to each other, certificate in form OAC/OAC1 may be submitted in the first instance along with documentary evidence to the effect that the shareholders belong to the same family or are closely related to each other. Annual submission of OAC/OAC1 thereafter is not necessary and it will suffice if a certificate signed by the Managing Director/Chief Executive Officer of the OCB is submitted stating that there is no change in the shareholding pattern since submission of the last certificate.

Broadly, NRIs are allowed to invest under the Portfolio Investment Scheme (buying through the secondary market) and through the Direct Subscription route (Investments though IPOs/Private Placements).

As per section 6(5) of FEMA, NRI can continue to hold the securities, which he/she had purchased as a resident Indian, even after he/she has become a non-resident Indian, on a non-repatriable basis.

Yes. It is the responsibility of the NRI to inform the change of status to the designated authorized dealer branch, through which the investor had made the investments in Portfolio Investment Scheme and the DP with whom he/she has opened the demat account. Subsequently, a new demat account in the resident status will have to be opened, securities should be transferred from the NRI demat account to resident account and then close the NRI demat account.

Yes. NRIs can bring into India GOLD up to 10,000 grams as part of their baggage once in six months provided they have stayed abroad for a continuous period of six months.

The gold may be brought into India in any form, including ornaments (Other than ornaments studded with stones and pearls).

Yes. They are required to pay customs duty in any convertible foreign currency at a rate equivalent to Rs 250/- per 10 grams of gold. Our Airport Exchange Bureaus at all three international airports in Kerala will accept payment towards this.

The rate of duty on import of silver is Rs 500 per kilogram which is payable in foreign currency.

Yes. Gold/Silver is brought by NRIs can be sold to residents against payment in rupees. Reserve Bank has granted general permission to persons resident in India to make payment to NRIs in Indian rupees by means of a crossed cheque in India and that such rupees are credited to Ordinary Non-resident Rupee (NRO) account of the NRI seller.

Note: Import of gold and silver into India is regulated under the Export Import Policy of the Government of India in force)

Yes, NRIs/OCBs can invest in domestic mutual funds on repatriation basis. NRIs/OCBs can also invest in Mutual funds floated by public and private sector mutual funds on non repatriation basis by giving a separate application in RBI. No separate approval for the same is required.

Similarly, they can also invest in Money Market Mutual Funds (MMMFs) floated by commercial banks and other financial institutions. No separate permission is required.

Yes, NRIs/OCBs can place funds in fixed deposits with public limited companies in India. If the permission to accept deposit from non residents is already being taken by Indian company, it is not necessary for the investor to take separate permission.

The investment can be done with full repatriation benefits for a period of three years.

Two types of rupee accounts viz. Non resident (external) Rupee Accounts (NRE) and Ordinary Non-Resident Rupee Accounts (NRO) are permitted to be maintained by NRIs. Funds in NRE Account are repatriable.

NRO A/c.: A NRO bank account is an ordinary saving bank account opened for Non resident Indians. This is why it is known as Non-Resident Ordinary account. The funds, standing to the credit of this account, cannot be repatriated outside India in foreign exchange, without prior permission of the Reserve Bank of India. Interest, earned on these accounts, is, however, eligible for repatriation outside India, net of Indian taxes. The remittance of interest (net of taxes) will be permitted by the authorized dealer, where the account is maintained, if the account holder makes an application to the authorized dealer, in the prescribed form. No RBI permission is required for remittance of interest.

NRIs can open NRO account for transactions in rupees without any approval. It can be maintained in the nature of current, savings, recurring or fixed deposit account. NRIs may also open this account jointly with residents. After the person returns to India permanently, this account can be again designated as a resident account.

NRE A/c.: A NRE bank account is an external saving bank account opened for Non resident Indians. NRE account may be opened without any approval if the funds for this account are transferred in freely convertible foreign currency. The funds, standing to the credit of this account, as well as interest earned thereon, are remittable outside India in free foreign exchange, without permission of the RBI. The interest income is not subject to Indian Income-tax. Credits to the accounts should be in the form of remittance in foreign exchange from outside India, as well as other funds, which are eligible to be remitted outside India, in free foreign exchange. Funds, emanating from local sources, are not eligible to be credited to these accounts, unless these funds are otherwise remittable outside India, in terms of the existing Exchange Control Regulations.

NRIs may jointly open this account with another NRI. This account can be maintained in the form of saving or current or recurring or fixed deposit account. Balances held in this account and any interest earned on this account are exempt from tax.

Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account are not generally repatriable. Repatriation of balances held in NRO accounts is allowed subject to certain conditions. Funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can be credited to NRE accounts. Funds due to the non-resident account holder which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts. The interest income earned on NRO attracts income tax deduction at source.

Yes money can be freely transferred from NRE account to NRO accoun

No, money cannot be transferred from NRO account to NRE account. Money even by error if transferred from NRE account to NRO account, it cannot be transferred back to NRE account

Authorized dealers have been permitted to credit the proceeds of foreign currency notes/travelers cheques brought by the account holder from abroad during his visit to India provided they are tendered in person. Where the amount of foreign currency notes tendered exceeds U.S.$5000 or its equivalent or the total amount of currency notes and travelers cheques tendered for credit to NRE accounts exceeds US $ 10,000 or its equivalent, it should have been declared to the Customs on the Currency Declaration Form (CDF) at the time of the account holder's arrival in India.

Yes, by giving a Letter of Authority in the specified format to the Branch in which he is having his account. The authority to operate the account is only for local disbursements. The close relative who is authorized will not have the power to make gifts, transfer the account or close the account.

Yes, the balances lying in the following accounts can be repatriated anytime outside India:

(i) NRE account holders can not only repatriate the amount held in this account but also the interest accrued on this account.

(ii) Balances in NRO account can be remitted abroad with the permission of RBI. However, only the funds received from abroad can be repatriated. It may be noted that normally this account is used for depositing the local funds/incomes of NRI.

(iii) The balances held in NR-NR-RD a/c cannot be repatriated abroad but the interest accrued on this account is permitted to be repatriated

Yes, NRIs returning from abroad after a continued stay of at least one year can maintain their bank accounts abroad. They can deposit all income earned abroad while they were resident there. Also any income earned on any asset (immovable or not) acquired while staying abroad can be deposited in this account. Moreover, any pension received by such person from the erstwhile employers can also be deposited in this account. Any fresh credit to such account can be made only if it is out of foreign currency acquired from the above mentioned sources.

Yes, any NRI returning to India can deposit his income earned outside India in the Resident Foreign Currency Account (RFC A/C), although if the NRI decides, he can retain his income outside India.

Under this scheme NRIs who were resident outside India for a continuous period of at east one year and have become resident after returning back to India are permitted to maintain this account in any freely convertible foreign currency for depositing his income earned outside India.

The following amounts can be deposited in the RFC A/C -
(i) Balances in Bank accounts outside India and interest thereon.

(ii) Dividend, interest, profit earned on investment in foreign currency in the form of shares or securities.

(iii) Rent etc. earned from Immovable property outside India.

(iv) Foreign Exchange earning through employment, business or vocation outside India which was taken up while stay abroad.

Repatriation is allowed upto US dollars 1 million per calendar year for any purpose from the balances in NRO accounts subject to payment of applicable taxes. The limit of US dollars 1 million includes sale proceeds of immovable properties held by NRIs/PIOs for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI/PIO for the balance period.

NRO accounts can be held jointly with residents. However, NRE accounts cannot be held jointly with residents. It can be held jointly only with NRIs..

Debits for local payments/investments are allowed freely. Credits to an account, of funds emanating from a local source would be permissible only if the funds are of a repatriable nature i.e. funds which are eligible to be remitted abroad.

Banks re designate such accounts as resident accounts on return of the account holder to India.

No. Bank We pay interest at the contracted rate till the maturity of the deposit if the deposit is held for the full term even after conversion into resident rupee account.

The accounts cannot be opened by the Power of Attorney holder in India. However, the latter can operate the accounts for the purpose of local payments to be made on behalf of the non-resident account holder. The Power of Attorney holder is not permitted to make gifts from these accounts and, is not allowed to make remittances outside India.

The accounts are to be re-designed as resident accounts, when the non-resident account holder becomes a person, resident in India. In the case of fixed deposits opened by the account holder, before becoming resident in India, the contracted rate of interest will be paid till maturity of the deposits. Similarly, FCNR deposits will be eligible to be held in respective currencies till maturity of the deposits, even after the non-resident holder become a resident in India. He will, however, cease to get tax exemption on interest on the erstwhile deposits (NRE/FCNR deposits), after he becomes resident in India. In certain situations, it might be advisable for the account holder to convert the account to a Resident Foreign Currency Account Deposit (RFC)

Yes. NRI accounts can be opened in the name of crew members of shipping companies if their posting is not based in India and they derive their income from abroad in foreign currency.

Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with banks in India. At present such deposits are permitted in USD, GBP, Euro and JPY.

FCNR A/c.: These accounts can be opened in four foreign currencies:
1. Pounds Sterling
2. US Dollars
3. Japanese Yen
4. Euro.

For the purpose of opening an account, remittance in foreign exchange, in the same currency, should be received in India. The accounts can be opened only as fixed deposits, with a minimum maturity of one year and, a maximum maturity of three years. The principal, as well as interest, earned on these accounts, is remittable outside India, in the same currency or, in other convertible currency, as desired by the account holder. The interest, earned on these deposits, is exempt from Indian Income-tax.

No. FCNR accounts can be maintained only in the form of `term deposits', i.e. a deposit kept for fixed periods ranging from 12 months to 3 years.

Banks would treat the deposits held in FCNR accounts as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit.

Non Resident (Non Repatriable) Rupee Deposit Scheme -NR-NR-RD Scheme can be utilized by NRIs. NRIs can invest through this scheme in term deposit maintained out of the funds transferred in India in freely convertible foreign currency through proper banking channels.

This account is however, maintained in Indian rupees. The deposits can be for a period ranging from 6 months to 3 years

Non Resident Indians are allowed to make real estate investments in India without any cap on the quantity or the number of investments. But instead of giving a preferential treatment to NRIs bringing in valuable foreign exchange, the government goes all out to make investments in real estate a difficult proposition with a set of regulations that an NRI has to follow under the Foreign Exchange Management Act, 1999.
All purchases and sales are bound by the rules and regulations under the FEMA, which replaced the earlier Foreign Exchange Regulations Act. After fulfilling the formalities stipulated by the RBI to bring in investments, the NRI faces yet another hurdle - there is a cap on returns he can repatriate out of the investments made in immovable properties in India.
NRI interest is high on deposits as the interest accruals on such deposits and the deposit amount itself can be repatriated. Only preference that an NRI also enjoys in commercial or capital investments like real estate, banking and civil aviation is that the investments caps for NRIs are higher than for a foreign national.
Foreign direct investors in sectors where foreigners are permitted to invest are allowed to epatriate profits from businesses in India as dividends. NRIs have no dividend option for repatriation. In areas where NRIS are allowed to repatriate profits like deposits, it is estimated that NRIs have made deposits of nearly US$ 10 billion.

All NRI investments in real estate or immovable properties are considered as a transaction that gets regulated under the FEMA. This is essential because an NRI would be dealing with foreign exchange. It is considered to be a type of transaction which is bound to have some international financial implication. The current account transactions or capital account transactions of the NRI which are used to make investments in real estate thus get automatically regulated under FEMA. Current Account Transaction consists of payments due as interest on loans and net income from investments.

Capital Account Transactions means transactions which alters the assets or liabilities, including contingent liabilities outside India of an NRI. It includes transactions involving acquisitions or transfers of immovable property outside India, other than a lease not exceeding five years by an NRI or a resident, remittances outside India of capital assets of an NRI and foreign currency accounts in India of a person resident outside India. Even deposits between a person resident in India and a person resident outside India are considered as capital account transactions.

The Reserve Bank has granted a blanket permission to NRIs to purchase property in India for their residential and commercial purposes. There is also no limit on the number of investments or the quantity of investments that can be made in real estate. The immovable property can be purchased by inward remittances from any place outside India or through funds maintained in NRI accounts in the banks within the country.

FEMA stipulates that before making a purchase a specified form called the IPI 7 needs to be filed with the central office of the RBI along with the title deed or any other certified copy of the document proving that the NRI has executed an agreement to purchase property within the country. The form has to he filed within 90 days of the purchase of property and has to be accompanied with a bank certificate stating the consideration paid for the purchase. Permissions are generally granted without undue delays if all the relevant papers are submitted

NRI desiring to sell property within India has a lock in period of three years. That is, NRI under the FEMA regulations is allowed to sell property only after three years from the date of acquisition for the property or from the date of payment of the final installment of the consideration for its acquisition, whichever is later.

No.

Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bonafide residential purpose. They are, therefore, not required to obtain Permission of Reserve Bank.

They may repatriate sale proceeds of immovable property acquired in India to the extent of repatriable funds used for acquiring the property, without any lock in period, upto two residential properties. The balance amount will be repatriable through NRO account subject to conditions applicable for repatriation of balances from NRO accounts already mentioned.

The Government of India has adopted a liberal policy, with respect to investments by NRIs and OCBs in India. Such investments are allowed, both, through the RBI route and also through the Government route, i.e., through the Foreign Investment Promotion Board (FIPB) NRIs and OCBs are permitted to invest up to 100% equity in real estate development activity and civil aviation sectors. Investment, made by the NRIs and OCBs, are fully repatriable, except in the case of real estate, which has a 3 year lock-in period on original investment and, 16% cap on dividend repatriation.
For those proposals that do not qualify under the automatic route, Government approval is granted through FIPB.

Regulations regarding acquisition and transfer of immovable property in India by a person resident outside India has been notified vide RBI Notification No. FEMA 21/2000-RB dated May 3, 2000as amended vide Notification No. FEMA 64/2002-RB dated June 29, 2002and Notification No. FEMA 65/2002-RB dated June 29; 2002and relevant directions issued in the form of A.P. (DIR Series) Circulars. These are available on RBI website:

www.fema.rbi.org.in

Debits for local payments/investments are allowed freely. Credits to an account, of funds emanating from a local source would be permissible only if the funds are of a repatriable nature i.e. funds which are eligible to be remitted abroad.

General Permission is available to purchase only a residential/commercial property in India to a person resident outside India who is a citizen of India (NRI) and who is a Person of Indian Origin (PIO).

For the purpose of acquisition and transfer of immovable property in India, a PIO means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who (i) at any time, held Indian passport; or (ii) who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

NRI/PIO who has purchased residential/commercial property under general permission is not required to file any documents with the Reserve Bank. They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid.

The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NTE/FCNR accounts maintained with banks in India.

Yes. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.

Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation.

There is no restriction on number of residential/commercial property that NRI/PIO can purchase under the general permission available

No.

Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘purchase’. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire any immovable property in India by way of purchase.

Yes. A Foreign National of non-Indian origin including a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan may acquire only residential accommodation on lease, not exceeding five years for which he/she does not require prior permission of Reserve Bank of India

No. A person resident outside India cannot acquire by way of purchase agricultural land/plantation property/farm house in India.

Yes. Under general permission available NRI/PIO may acquire residential/commercial property by way of gift from a person resident in India or a NRI or a PIO.

No. Under section 2 (ze) of the Foreign Exchange Management Act, 1999 ‘transfer’ includes among others, ‘gift’. Therefore, a foreign national of non-Indian origin resident outside India cannot acquire residential/commercial property in India by way of gift.

No. A person resident outside India cannot acquire agricultural land/plantation property/farm house in India by way of gift.

Yes. A person resident outside India can hold immovable property acquired by way of inheritance from a person resident in India as per the provisions of Section 6(5) of the Foreign Exchange Management Act, 1999.

With the specific approval of Reserve Bank a person resident outside India may hold any immovable property in India acquired by way of inheritance from a person resident outside India, provided the bequeathor had acquired such property in accordance with the provisions of foreign exchange law in force at the time of acquisition or under FEMA regulations.

NRI can transfer by way of sale residential/commercial property in India to a person resident in India or to a NRI or a PIO.

FEMA extends to the whole of India. It also applies to all branches, offices and agencies outside India, owned or controlled by a person, resident in India. It also applies to any contravention, there under, committed in or, outside India, by any person to whom the Act applies

Any person, contravening FEMA, shall be liable, upon adjudication, to a penalty up to three times the sum involved in such contravention, where such amount is quantifiable, or up to Rupees Two hundred thousand, where the amount is not quantifiable. In addition, where such contravention is a continuing one, the person will be liable to further penalty, which may extend to Rupees Five thousand for every day after the first day, during which the contravention continues.

Yes. A person of Indian origin resident outside India may transfer residential or commercial property in India by way of gift to a person resident in India or to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India. A Person of Indian origin resident outside India may also transfer by way of gift agriculture land/farm house/plantation property in India to a person resident in India who is a citizen of India.

Yes. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

Yes.

Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.

Yes. Reserve Bank has granted general permission for letting out of any immovable property in India. The rental income or proceeds of any investment of such income has to be credited to NRO account.

One can choose not to grant the Power of Attorney (POA) to the developers. However this will mandate the mailing of all documents to your foreign residence and associated time delays. A good compromise is to grant the POA to the builder only for specific necessary items.

Residential property

The notification gives general permission to foreign citizens of Indian origin.

· to acquire by way of purchase or inheritance

· to dispose off by way of sale Any immovable property, other than agriculture land/ farm house/ plantation property.

· To acquire by way of gift, and

· To dispose off by way of sale or gift Any residential property, subject to certain conditions.

In case of purchase, the conditions are:

· The consideration is paid out of foreign remittance or out of NRE or FCNR account.

· Purchases of residential property is only for bona fide residential purpose. In case of acquisition by way of gift, the conditions are:

· It is effected between "relatives" (as defined under companies act, 1956).

· Incase of persons resident outside India, they can acquire a maximum of two properties, without RBI permission.

· Gift-tax liability has been paid. In either case, a declaration in form IPI-7 with certified copy of conveyance deed and a certificate from bank regarding payment particulars has to bee filled by the purchaser within 90 days of acquisition to the Controller, Exchange Control department, foreign Investment division (III), RBI, Central office, Mumbai.

Commercial property

Foreign citizens of Indian origin could acquire and sell commercial property in India subject to certain conditions.

· Purchase consideration is paid out of foreign remittance or out of funds in NRE/ FCNR account.

· Declaration in form IPI7 is to be submitted within 90 days to RBI.

· Repatriation (form IPI to be used) to the extent of original investment made shall only be permitted subject to fulfillment of following conditions:

· Property has been purchased on or after May 26, 1993.

· The property is not transferred before three years from the date of purchase deed or from the date of payment of final installment, whichever is later.

· The balance sale proceed should be credited to NRO account. Letting out of the property Letting the property is allowed through the general permission given by the RBI
.

Repatriation

Repatriation of sale proceeds is permitted with prior approval of RBI, provided

· Such property is purchased on or after May 26, 1993.

· Such sales take place after three years from the date of acquisition or from the date of payment of final installment of consideration, whichever is later.

· Repatriation is limited to the extent of foreign exchange paid for acquisition of immovable property (in case of sale of residential properties, the amount equivalent in foreign exchange paid for acquisition of maximum two properties). Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank of India at Mumbai within 90 days of the sale of the property. Note - An OCB even if it remits fund from abroad, would still require RBI permission to acquire property in India. Real estate business Carrying on any business by any person or entity is governed by section 29 of FERA. A notification dated April 27, 1992, in pursuance of section 29(1) has been issued granting general permission to NRIs for acquiring any interest in proprietary/ partnership on a non-repatriation basis. However, one of the conditions laid down by the notification is that the said concern must not be carrying on any real estate business.

Investment by NRIs in real estate development companies:

NRIs are permitted to invest upto 100% in the new issue of equity shares/ debentures of Indian companies engaged in the following areas:

· Development of serviced plots and construction of residential premises.

· Real estates covering construction of residential and commercial premises including business centers and offices.

· Development of township.

· Manufacture of building Material.

· Financing of housing development.

This facility has been extended to OCBs also. OCBs will also be permitted to repatriate net profit (upto 16%) arising from sale of such investment after the lock-in period of three years.

Note-The purchase consideration should be met either out of inward remittances in foreign exchange through normal banking channels or out of funds from NRE/ FCNR accounts maintained with banks in India.

Important factors

Following factors should be considered before investing in India.

· The investment is non-repatriable.

· Arrangement for maintenance.

· Wealth Tax implications

RBI does not welcome any investment in immovable property but the line of demarcation between what may be regarded as a pure investment and a bona fide requirement is very thin. So NRIs can freely invest in residential/ commercial premises subject to conditions about payment and non-repatriation. Though in the case of commercial premises, carrying on any commercial activity would require permission under section 29 of FERA.

Loans to NRIs for acquisition of a flat/ house.

Authorized dealers can grant loans/ overdrafts to NRIs holding Indian passport against security of immovable property proposed to be acquired by them.
Certain financial institutions also provides housing finance eg HDFC, LIC Housing Finance Ltd. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investors' NRE/ FCNR/ NRO account

It is easier to bring money into the country. Getting out has a number of bottlenecks, which is a constant disappointment for the NRI community. FEMA says no matter what the proceeds of the sale may be, the amount for repatriation should not exceed the amount paid for acquisition of the immovable property in foreign exchange received through the normal banking channels or out of funds held in foreign currency Non-Resident Accounts. The repatriation of sale proceeds is restricted to only two properties. NRIs are also restricted from repatriating returns form real estate investments in the form of dividends.

In respect of residential properties purchased on or after 26th May,1993, Reserve Bank considers applications for repatriation of sale proceeds up to the consideration amount remitted in foreign exchange for the acquisition of the property for two such properties. The balance amount of sale proceeds if any or sale proceeds in respect of properties purchased prior to 26th May,1993, will have to be credited to the ordinary non-resident rupee account of the owner of the property.

Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final installment of consideration amount, whichever is later.

Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property.

Yes. Authorized dealers can permit remittance of pension to NRIs provided the person concerned has no other income in India. If, however, the NRI has any other income in India, the amount of pension should be credited to his NRO account and his net income including pension is allowed to be remitted after payment of applicable taxes.

Yes. RBI will consider application from NRIs for remittance of assets, inherited by them in India. Such remittance may be permitted up to US$ 100,000 per year.

Money can be transferred to one’s NRE/NRO bank account in India, through various channels offered by Bank. Some of them are:

Online Modes:

1. E-transfer

2. Cheque Transfer

3. Power Transfer

4. Net Express

5. Card transfer

6. Special gulf products

Offline Modes:

1. Insta transfer

2. Speed transfer

3. Demand drafts

4. Home point

5. Cheques

6. Wire transfer

7. POSB in Singapore

Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC,LIC Housing Finance Ltd.,etc. to grant housing loans to non-resident Indian nationals for acquisition of houses/flats for self-occupation subject to certain conditions.

Authorized dealers have been granted permission to grant loans up to non-resident Indian nationals for acquisition of house/flat for self-occupation on their return to India subject to certain conditions. Repayment of the loan should be made within a period not exceeding 15 years out of inward remittance through banking channels or out of funds held in the investments' NRE/FCNR accounts.

Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passport subject to certain conditions.

One will need a guarantor for a loan mainly for collateral security. The guarantor will have to demonstrate appropriate net worth to cover for the loan. Usually one can have a guarantor in any city where the loan issuer has a branch. Talk to loan issuers they will work something out for NRIs and foreign banks.

As per regulatory guidelines, Tax (if applicable) has to be deducted at source for all the profits done in the equity market transactions. Before crediting sales proceeds it is the responsibility of the broker and the PINS cell to determine the appropriate Tax and deduct it at source

TDS rate is different as per the tenure of the investment. It can be classified into

a. Long-term capital gain – If the period of holding is more than 1 year i.e. the difference between the date of purchase and sell is more than 1 year, then the TDS rate applicable is 0 %. Before 1st Oct 2004 this rate was 10% now it is tax-free.

b. Short-term capital gain - If the period of holding is less than 1 year i.e. the difference between the date of purchase and sell is less than 1 year, then the TDS rate applicable is 10%. Before 1st Oct 2004 this rate was 30%.

TDS is computed on the profit amount or the gain as per the applicable rate i.e. short term or long term.

For any TDS to be deducted and money to be remitted to bank account, there are three things that have to be verified.

· 1. Amount of gain = Selling price – Purchase price

· 2. Duration of holding i.e. long term or short term = Selling date – Purchase date

· 3. Source of fund for purchase i.e. NRE or NRO

Important: TDS is deducted only at the time of crediting sales proceeds.
This can be explained better with the following example:
Case: I bought 100 shares of RIL on 1st January, 2004 @ Rs.400, and sold the same on 2nd February, 2005 @ Rs.450, the TDS computation would be as follows:
Gain = Selling price – Purchase price
= 45000 – 40000
= Rs.5000
Therefore gain for TDS is equal to Rs.5000
Duration = Selling date – Purchase date
= 02/02/05 – 01/01/04
= > I year
Therefore applicable tax rate is 0%
Source of fund = NRE or NRO
Scenario 1: The sale proceeds to be credited to NRO/NRE bank account and under PINS
Since the selling is allowed under PINS account, it means the PINS cell has all the records pertaining to purchase and entire sales proceeds (net of brokerage) will be credited to NRO/NRE bank account as TDS rate applicable is 0% and the source of fund i.e. NRE or NRO for purchase is recorded with PINS cell.
Therefore net credit to the bank account = 45000 – (0% of 45000)
= 45000-0
= 45000
Scenario 2: The sale proceeds to be credited to NRO bank account and not under PINS i.e under Non-PINS
Since PINS cell do not keep records of acquisition under Non-PINS, it will require the documents to prove the purchase date and purchase price. Since the credit has to be done to NRO account, it will not require proof for source of funds.
If documents are not provided, then it will deduct the maximum TDS possible and credit the remaining proceeds.
Gain = Selling Price – Purchase Price
= 45000 – 0 (since the documents to prove the purchase price is not given)
= 45000
Therefore gain for TDS is assumed to be Rs.45000
Duration = Selling date – Purchase date
= 02/02/05 – 0
= < I year
Since purchase date is not available maximum rate will be applied i.e. 10%.
Source of fund = NRE or NRO
Since credit of funds is required in NRO account, no proof of source of fund is required.
Therefore net credit to the bank account = 45000 – (10% of 45000)
= 45000-4500
= 40500

Scenario 3: The sale proceeds to be credited to NRE bank account and not under PINS i.e under Non-PINS
Since PINS cell do not keep records of acquisition under Non-PINS, it will require the documents to prove the purchase date and purchase price and also the source of funds.
If documents are not provided, then it will deduct the maximum TDS possible and credit the remaining proceeds.
Gain = Selling Price – Purchase Price
= 45000 – 0 (since the documents to prove the purchase price is not given)
= 45000

Therefore gain for TDS is assumed to be Rs.45000

Duration = Selling date – Purchase date
= 02/02/05 – 0
= < I year
Since purchase date is not available maximum rate will be applied i.e. 10%.
Source of fund = NRE or NRO

Since credit of funds is required in NRE account, proof of source of fund used for purchase is required. Till the time proofs are received no credit would be given to the bank account of the NRI and the monies will be parked in the suspense account with Bank.
Therefore net credit to the bank account = 45000 – (100% of 45000)
= 45000-45000
= 0

NRI should provide the proofs latest by 3rd of next month following the month of sale, failing which the proceeds net of 10% of sales proceeds (maximum tax possible) would be credited to the NRO bank account.

For credit to NRO account

1.Document to prove the duration (1 of the following)

· a. Demat statement

· b. Contract note of the purchase date

· c. IPO application letter along with allotment advise

2. Document to prove the purchase price (1 of the following)

· a. Contract note

· b. IPO allotment advise

Note: If the duration is more than 1 year, then no document is required to prove the purchase date, as the applicable tax rate will be 0%
For credit to NRE account

1. Document to prove the duration (1 of the following)

· a. Demat statement

· b. Contract note of the purchase date

· c. IPO application letter along with allotment advise

2. Document to prove the purchase price (1 of the following)

· a. Contract note

· b. IPO allotment advise

Note: If the duration is more than 1 year, then no document is required to prove the purchase date, as the applicable tax rate will be 0%.

3. Document to prove the source of funds (1 of the following)

· a. IPO application form along with allotment advise

· b. In case of dematerialization of shares, copy of original certificate along with the DRF form

Any other documents that are not mentioned above but can substantially prove the requirement can be accepted.

Effective 17th July 1992, the Central Government has granted exemption from the surrender requirement to persons who return to India after a continuous stay abroad of one year and above in respect of funds/assets acquired by them abroad otherwise than in contravention of FERA 1973 or our of foreign exchange earned through employment, business or vocation outside India taken up or commenced while they were resident outside India. Persons satisfying the conditions of general exemption can retain their foreign currency accounts with banks abroad and/or hold, transfer or dispose of their other foreign currency assets such as shares, securities or investments in business, etc. and immovable properties.

Yes. They would enjoy complete freedom for utilization of these assets as well as income earned or sale proceeds received subsequently.

Yes. They can repatriate these funds to India and hold them separately with authorized dealers under the Resident Foreign Account Scheme.

This is a Scheme by Reserve Bank permitting persons of Indian nationality or origin, who have returned to India on or after 18th April 1992 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 with banks in India for holding funds brought by them to India. Persons who have returned to India before 18th April 1992 can also open RFC account if (a) they are holding foreign currency assets abroad with Reserve Bank's permission or (b) are in receipt of pension or other monetary benefits from their erstwhile employers abroad. We accept RFC in USD in SB Account and Term Deposits for 6 months to 36 months.

The entire amount of foreign exchange brought to India at the time of their return to India for permanent settlement as well as the balances standing to the credit of their NRE and FCNR accounts at the time of return can be credited to RFC accounts. However, the foreign exchange brought to India in the form of foreign currency notes/bank notes/traveler’s cheques should have been declared to Customs at the time of arrival on the Currency Declaration Form (CDF) if it exceeded U.S. $ 10,000 or its equivalent. In the case of foreign currency/bank notes, such as declaration of form CDF is compulsory if the amount exceeds U.S. dollar 5,000 or its equivalent.

Yes. The entire income from such assets or sale proceeds of such assets repatriated to India can be credited to RFC accounts.

Yes. The entire amount of pension received from abroad can be credited to his RFC account.

Yes. Funds in RFC accounts can be remitted abroad for any bonafide purpose of the account holder or his dependents including exchange required for travel and other personal purposes and investments.

Their applications for opening such accounts would be considered by Reserve Bank....