An Indian Citizen who stays abroad for employment/carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons Posted in U.N. organisations and official deputed abroad by Central/State Governments and Public Sector undertakings on non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with non- resident Indian citizen (NRIs). Indians going abroad for study, seminars, lectures, or research are not NRIs. No student can be an NRI until he/she finishes his/her studies and starts working abroad.
For the purposes of Availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India: A foreign citizen (other than a citizen of Pakistan or Bangladesh)is deemed to be of Indian origin, if, he, at any time, held an Indian passport, or he or either of his parents or any of his grand parents was a citizen of India by virtue of the Constitution of India or citizenship Act, 1955 (57 of 1955).
Note : A spouse (non being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses.
For investments in immovable properties: A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Napal), is deemed to be of Indian origin if he held an Indian passport at any time or he or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).
Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include-overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of atleast 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which atleast 60% of the beneficial interest is irrevocable held by such persons.
Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be atleast 60%.
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 furnish a certificate from an overseas auditor/chartered accountant/certified public accountant 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.
Yes. Residents receiving foreign exchange from abroad by way of gift, inheritance, remuneration for services rendered, etc. are required to bring it to India within three months acquiring the foreign exchange and surrender it to an authorised dealer within seven days from its receipt in India. This rule also applies to non-residents who return to India for a purpose other than temporary visits.
Residents are required to declare such assets to the Reserve Bank within three months from acquiring them and obtain permission of the Reserve Bank for holding them.
Yes, provided the funds for the purpose are drawn out of their Resident Foreign Currency Accounts
Yes. Persons who have returned to India on or after April 18, 1992 and have stayed abroad for a continuous period of not less than one year have been granted general permission/exemption from the requirement of surrendering/declaring their foreign currency assets abroad. As a result they can continue to maintain their foreign currency accounts and other assets, viz., foreign currency shares/securities or immovable properties abroad. Under the general permission/exemption, Returning Indians can retain their foreign currency accounts with banks abroad and hold, transfer or dispose of their foreign currency assets. This can be done provided these funds/assets were lawfully acquired by them out of foreign exchange earned through employment, business or vocation outside India taken up or commenced while they were resident outside India and not in contravention of the provisions of the Foreign Exchange Regulation Act (FERA), 1973.
Yes. Residents who had acquired foreign currency assets abroad before July 8, 1947 can continue to hold them abroad, provided they were held outside India with the general or special permission of the Reserve Bank as on 6th July 1994. This general permission/exemption has also been granted by the Government of India vide their Notification dated July 6, 1994.
Yes. The resident donees or legal heirs can freely utilise overseas assets covered by the general permission/exemption assets as well as income earned thereon or sale proceeds received subsequently, for bona fide payments in foreign currency.
Applications for the purpose should be made in form FAD 1 to the Reserve Bank of India. The forms are available with the Exchange Control Department (Foreign Accounts Section), Amar Building, Bombay-400 001. Returning Indians are also offered the facility of keeping their foreign currency funds with a bank in India. This facility is known as the Resident Foreign Currency (RFC) Account Scheme.
This is a Scheme drawn up by the Reserve Bank permitting Returning Indians to open foreign currency accounts with banks in India for holding funds brought by them to India. This facility replaces the earlier (RIFEE) facility.
The Returning Indians can credit to RFC accounts, 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 Not Resident (External) (NRE) and Foreign Currency Non-Resident (FCNR) accounts.
Yes. Funds in RFC accounts can be remitted abroad for any bona-fide purpose of the account holder or his dependents as well as withdrawn freely for local payments in rupees.
Their applications for opening RFC accounts would be considered by the Reserve Bank. Persons who have gone abroad for studies, training, etc., are, however, not eligible for this facility.
No. Returning Indians are required to redesignate immediately on their return to India their NRE/FCNR accounts as resident rupee accounts or transfer the balances held in their NRE/FCNR accounts to Resident Foreign Currency (RFC) Accounts (if eligible). The Non Resident (Ordinary) (NRO) accounts also have to be redesignated as resident rupee accounts. The funds held in NRO accounts cannot be credited to RFC accounts.
Yes. Income from interest on moneys standing to the credit of NRE/FCNR accounts is exempt from income tax. Gifts from such accounts are also free of Gift-tax.
Income from the deposits will be free from Indian Income Tax. The deposit will also be exempt from Gift Tax for one-time gifting (in the case of NRIs only). Exemption from Income Tax will not be available to resident donee and those residents, who being joint holders, become owners of the deposit as survivor of the non-resident depositor.
Tax Exemption on interest earned on deposit held in foreign currency is available to non-residents and persons who are not ordinarily resident in India as defined under Income Tax Act, 1961.
Yes. Exchange Houses in the Gulf countries have been permitted to send remittances into India by means of DDs, MTs and TTs drawn on banks in India.
Yes. NRIs can take out of India precious stones and jewellery (both gold and non-gold) purchased by them in India, without any limit, provided the purchase is made against payment in any convertible foreign currency.
Yes. RBI permits on application such requests received from NRIs upto the value of Rs.20,000 for articles other than those made of gold or silver or those banned for exports.