Under Foreign Exchange Management Act, 1999, Non-resident Indian are:
Who can open and how?
An existing bank account of an Indian national going abroad and becoming a Non-Resident Indian is automatically designated as Non-Resident (Ordinary) account (NRO). An NRI can also open such ordinary accounts even by making remittances from abroad or by transfer from an existing Non-Resident account in India in his own name. Such accounts can also be opened by Overseas Corporate Bodies (OCBs). NRO account can be opened, while a NRI is on a visit to India or simply by making remittances from abroad. NRO accounts can be in the sole name of an NRI or in joining names of more than one NRI or in joint names with any of the close relatives in India. In other types of joint accounts, prior permission of Reserve Bank of India (RBI) is required.
What type of accounts can be opened?
NRO account can be in the categories of current, saving, and term deposit accounts.
What types of transactions are permitted?
All types of transactions of deposits and withdrawals to and from NRO account are normally permitted. However, the RBI has prescribed certain transactions required to be reported to RBI in prescribed forms.
Can the funds be repatriated?
Repatriation is subject to RBI approvals however, the funds can be freely withdrawn from the local disbursement without RBI approval.
Is interest earned exempt from tax?
The interest of deposits in NRI accounts and balances standing to the credit of such accounts are not exempted from Income Tax.
Who can open and how?
NRI as well as OCBs are permitted to open NRE account. NRE accounts can be opened by depositing foreign currency alongwith the account application form i.e. account opening form may be signed by NRI abroad and the signature of NRI may be verified by bank abroad or by Indian embassy or by Notary Public Officials abroad. NRE account can be opened during the visit to India by tendering foreign currency traveller's cheques or foreign currency notes.
What type of accounts can be opened?
All types or account i.e. current, saving and term deposit can be opened under NRE accounts scheme. NRE accounts can be opened in single or joint name. However, in case or account opened in joint name, all the joint holders should be resident of external group countries.
Can the funds be repatriated?
The entire credit balance can be repatriated outside India at any time without any reference to RBI. At the time of repatriation, the amount to be repatriated is converted into the designated foreign currency at the prevailing market rate of exchange. NRE account offers all the facilities of the NRO account plus complete repatriation without informing the Reserve Bank.
Who can open and how?
Both Non-Resident Indians, and OCBs are eligible to open FCNR (B) accounts. NRI and OCBs resident in bilateral group of countries cannot open FCNR accounts without RBI approval. FCNR (B) accounts are permitted in the following currencies.
The rates of interest on the above account vary for each type of designated currency.
What type of accounts can be opened?
FCNR (B) account is permitted in the form of fixed deposits for a maximum period of 3 years. Current and Saving accounts are not available under this scheme.
NRI are permitted to acquire immovable property in India other than agricultural/plantation property or farm houses.
Any non-resident person, who has established in India a branch, office or other place of business (excluding a liaison office) for carrying on in India any activity, in accordance with FEM (Establishment in India of Branch or office or other Place of Business) Regulations, 2000, may acquire any immovable property shall furnish a declaration in Form IPI to the Reserve Bank of India within 90 days from the date of acquisition.
Non-resident Indians are permitted to transfer any immovable property in India to a resident person, and any immovable property other than agricultural or plantation property or farmhouse, to a non-resident Indian or person of Indian origin.
Persons of Indian origin are permitted to transfer any immovable property in India other than agricultural land / farm house / plantation property, by way of sale to a resident person; any agricultural land / farm house / plantation property in India, by way of gift or sale to resident person who is a citizen of India; and any residential or commercial property in India; by way of gift to a resident person or NRI / PIO.
Any Non-Resident person who has acquired any immovable property in India, for establishing or for the purpose of a branch, office or other place of business (excluding a liaison office), is permitted to transfer such property by way of mortgage to a authorised dealer as a security for any borrowing.
The sale proceeds of an immovable property in India can be repatriated if following conditions are fulfilled:
(The condition for non-repatriation of sale proceeds for a period of three years has now deleted by RBI circular dt. 1.11.2002)
Yes Authorised dealers and hosing financial institutions in India approved by the National Hosing Banks may grant housing loans to NRIs/PIOs for acquisition of immovable property in India subject to the following condition:
Typically the security for the loan is first mortgage of the property to be financed, normally by way of deposit of title deeds and / or such other collateral security as may be necessary.
In additional interim security may be required, if the property is under construction. Collateral or interim security could be in the form of assignment of life insurance policies, surrender value of which is at least equal to the loan amount, pledge of shares other investments.
Yes, normally it is desirable to appoint a Power of Attorney in India to represent you in dealings in India. The power of Attorney should be executed as per drafts provided by the housing finance company. The power of Attorney can be given to any person of your choice in India.
The RBI has granted general permission to NRI's and foreign citizens of India origin, to let out their residential properties. However, there are restrictions on the repatriation of the rental income earned from such letting out the property. The rental income is on a non-repatriation basis. Thus funds (rental income) can be credited to the NRO Account/ Residential Account in India.