Resiednt & Non Resident:
The status depend on intention and not on physical stay(unlike Income Act)
In general person becomes an NRI when he goes out of India to
- take up any employment
- carry on any business activity/vocation
- stay outside India for an uncertain period
Person of Indian origin:
A person who or whose any parent or grand parent was an Indian citizen,spouse
of such pseron.Excludes citizen of Bangladesh or Pakistan.
Dealing in Foreign Exchange:
- No person in India or resident in India can acquire , hold or dispose off foreign exchange without Reserve Bank of India approval.
- No person who is a resident in India can pay to a non-resident ;or to pay any one else on behalf of a non-resident.
Resident Foreign Currency Account(RFC):
Non-residents who return to India aftera continues period of one year ,can
continue to retain foreign assets abroad without declaring same to RBI.
They can open RFC account and credit the remittances out of foreign assets in this account.RFC A/C can be used for various
personal purposes.
Repatriation of income on non-repatriable investments:
Repatriable of net income /interest earned on investments/deposits
in India held on non repatriation basis by NRIs/OCBs is permitted.
However repatriation of income accrued by way of sale proceeds of assets is not permitted.
Application should be made to the bank who can allow remittances without referring the mattter to RBI.
Investment without repatriation basis by NRIs /OCBs:
- Portfolio investment in equity shares/debentures through stock exchanges in India.
- Portfolio investment in preference shares /non convertible debentures of Indian cmpanies and master shares of UTI through stock exchanges.
- RBI grant general permission for 5 years.For individuals form NRI and for OCBs form NRC.
- Investment in new issues of equity shares /debentures of public/private companies not engaged in plantation/real estate and agricultural activities.
- Investee company file form DIN with RBI.
- Investment in proprietory/partnership firm engaged in trading/industrial and commercial activities except plantation/real estate and agricultural activities.
Investee company file form DIN with RBI.
Investment with repatriation basis by NRIs /OCBs:
- Portfolio investment in equity shares/debentures through stock exchanges in India.
- RBI grant general permission.For individuals form RPI and for OCBs form RPC.
- Portfolio investment in preference shares /non convertible debentures of Indian cmpanies and master shares of UTI through stock exchanges.
- RBI grant general permission.For individuals form RPI and for OCBs form RPC.
- Investment in new issues of equity shares /debentures of public/private companies not engaged in plantation/real estate and agricultural activities or activities specified in Annex.III of Industrial Policy of 1991.
- No permission require.
Investment with immovable property by NRIs:
NRI can invest in immovable property if investment is made from foreign funds. He/she has to file declaration in form IPI 7 if repatriation facility is required.
Repatriation of original investment upto 2 residential property or any number of commercial property allowed after 3 years on applying to RBI in form IPI 8.
