NRI FAQ
- How
do I know if I am a Non Resident?
- How
do I know if I am a Non Resident Indian (NRI)?
- How
do I know if I am a person of Indian origin?
- If I
am a NRI, what happens to my status when I come to
India?
- What
if I come to India for a holiday?
- What
if I come to India on a business trip?
- If I
am an NRI, what are the investment opportunities available
to me in India?
- If I
invest in India, can I take my money back?
- Do I
need permission to invest in India on repatriation
basis?
- What
are the different kinds of Bank Accounts that I, as an NRI,
can maintain in India?
- What
are Non-resident (External) (NRE) Accounts?
- Are
there any special features?
- Are
there any restrictions on operations in NRE accounts?
- Can
I borrow against these accounts?
- What
happens when I come back to India?
- Are
there any disadvantages in my having an NRE account?
- How
do I protect myself against the possibility of the Rupee
losing its value?
- What
is a FCNR account?
- Are
there any stipulations regarding maturity of a FCNR
account?
- What
are the other features of FCNR accounts?
- What
is the advantage of keeping my money in a FCNR account?
- Does
it mean I am protected from exchange rate fluctuation if I
put my money in a FCNR account?
- Can
I get forward cover for my FCNR or NRE accounts?
- Between
FCNR and NRE accounts, how do I decide where to place my
money?
- What
happens to my FCNR deposit when I come back to India for
good?
- What
is PIO Scheme?
How do I know if I am a Non
Resident?
Under the present rules, your non-resident status, for
exchange control purposes, is determined by the purpose
of stay abroad. Duration of stay in India is of limited
significance.. Generally,
If you stay abroad because you are employed there, you are
a non-resident.
If you stay abroad because you carry on a business or
pursue a vocation there, you are a non-resident.
If you are in a situation where your stay outside India is
for an indefinite period, you are a non-resident.
If there is any ambiguity regarding the above criteria, for
example, if you carry on business in India and abroad then you
will probably be considered a resident of India if you stay in
India for more than one hundred and eighty two days during the
course of the preceding financial year
(This definition is for exchange control purposes only.
For income tax there is a different definition based on period
of stay).
How do I know if I am a Non Resident
Indian (NRI)?
If you are a non-resident and are an Indian citizen, you
are a NRI.
If you are a non-resident foreign citizen and if you are of
Indian origin, you are a NRI.
How do I know if I am a person of Indian
origin?
If you are a foreign citizen and want to open bank accounts
or invest in Indian shares and securities, you are considered
to be of Indian origin if,
- You, at any time in your life held an Indian passport,
or
- You or any one of your parents or any one of your grand
parents was a citizen of India, or
- You are not of Indian origin but your spouse is an
Indian citizen or is a person of Indian origin. (Your bank
accounts and investments should be held jointly with your
spouse).
If you are a citizen of Pakistan or Bangladesh, you are not
considered to be of Indian origin even if you meet the above
criteria.
If you want to acquire immovable property in India, you are
considered to be of Indian origin if you
- at any time, held Indian passport, or
- you or either of father or grandfather was a citizen of
India,
If you are a citizen of Pakistan or Bangladesh or Sri Lanka
or Afghanistan or China or Iran or Nepal or Bhutan, you are
not considered to be of Indian origin even if you meet the
above criteria.
If I am a NRI, what happens to my status
when I come to India?
You become resident in India only when you come back to
India for employment, to carry on business or pursue a
vocation. You also become a resident if your stay in India is
for an indefinite period
What if I come to India for a
holiday?
You continue to be a NRI when you visit India for short
periods on holiday, leave, etc.
What if I come to India on a business
trip?
You continue to be a NRI when you visit India for short
periods on business as long as you continue to be gainfully
employed abroad.
If I am an NRI, what are the investment
opportunities available to me in India?
There is a whole range of investment opportunities is open
to you. Bank Deposits, Government securities, public sector
bonds, primary share issues (both public and private
placement), secondary equity markets, convertible and
non-convertible debentures, partnership and proprietary
concerns, start ups, mutual funds, company deposits, immovable
property etc.
If I invest in India, can I take my
money back?
If your investment has been allowed on repatriation basis,
you can take back abroad the principal and the income. If your
investment is on non-repatriation basis you can take back only
the income.
Do I need permission to invest in India
on repatriation basis?
The Reserve Bank of India and the Government have granted
general permission for some kinds of investment. In other
cases you need permission.
You do not need prior permission to invest in Bank
Deposits. If you want to invest in new issues of shares or
debentures, the issuing company will get the necessary
approval. Mutual Funds will also get the clearance from the
RBI so you do not have to bother.
What are the different kinds of Bank
Accounts that I, as an NRI, can maintain in India?
If you are keen on repatriation of both principal and
interest, you can open a Non Resident External (NRE) account
or a Foreign Currency Non Resident (FCNR) account.
On non-repatriation basis you can maintain a Non Resident
Ordinary (NRO) account, a Non Resident (Special) Rupee (NRSR)
account or a Non Resident Non repatriable (NRNR)
account.
What are Non-resident (External) (NRE)
Accounts?
These are Indian Rupee accounts, which you can maintain as
Saving Bank, Current or Term Deposits.
You can hold the
account jointly with another non- resident Indian.
You can
authorize a resident to operate the account for all local
payments except gifts.
Are there any special features?
The principal and interest can be taken back abroad.
You
don’t have to pay income tax on the interest earned on these
deposits. You need not pay wealth tax on the
deposits.
Are there any restrictions on
operations in NRE accounts?
Yes there are. For example, you cannot credit local funds
to your NRE account. Some, not all, of the sources from which
you can credit funds to your NRE Account are given below:
- Inward remittance from abroad
- Transfer from other repatriable accounts (NRE/ FCNR
accounts)
- Proceeds of foreign currency traveler's cheques or
currency notes during visits to India.
- Income from investments made on repatriable basis.
- Sale proceeds of investments made on repatriable
basis.
Can I borrow against these
accounts?
You can take a loan or overdraft in India against your NRE
deposit for some approved purposes. You can also borrow
overseas against these deposits.
Your relatives and friends in India can get credit
facilities in India against the security of your NRE fixed
deposits subject to some conditions.
What happens when I come back to
India?
When you are in India on short visits, you retain your NRI
status and your NRE account will continue as it is.
When you come back to take up residence in India your NRE
account will be redesignated as a resident account.
Are there any disadvantages in my
having an NRE account?
Yes there is one disadvantage. As the account is held in
Rupees, if the Rupee depreciates you will lose. Imagine you
had opened a NRE Fixed Deposit account with an inward
remittance of US $100 with the intention of taking back your
money in dollars when the deposit matures. If the Rupee
/Dollar exchange rate at that time was 42.50, your account
would have been credited with Rs. 4250. If, when the deposit
matures, the exchange rate is Rs 43.50 to the dollar, your
deposit amount will get you only $ 97.70 to take back.
On the other hand, if the exchange rate was Rs 41,50 you
will get $102.41.
How do I protect myself against the
possibility of the Rupee losing its value?
If you want to place a deposit in India and are worried
about the Rupee depreciating, you can open a Foreign Currency
Non Resident (FCNR) account.
What is a FCNR account?
FCNR (Foreign Currency Non Resident) Account is similar to
the NRE account. The big difference is that unlike the former,
which is maintained in Rupees, you can have a FCNR account in
US Dollars, Pound Sterling, Deutsche Mark or Yen.
Are there any stipulations regarding
maturity of a FCNR account?
Unlike the NRE account, which can be a savings, current or
term deposit, your FCNR deposits has to be a fixed deposit for
one of these three maturities: (a) one year and above but less
than 2 years, (b) two years and above but less than 3 years
and (c) three years.
What are the other features of FCNR
accounts?
FCNR accounts are no different from NRE accounts as far as
opening of accounts, reparability of funds abroad, tax
exemptions, joint holding, availing of loans etc.
What is the advantage of keeping my
money in a FCNR account?
You need not worry that the Rupee will depreciate in value
while your deposit is with the bank. (See question 16).
Does it mean I am protected from
exchange rate fluctuation if I put my money in a FCNR
account?
No, you are protected against the Rupee losing value, but
if the currency in which you placed your deposit depreciates,
you will lose.
Can I get forward cover for my FCNR or
NRE accounts?
Yes. You can get forward cover for the balances in your
FCNR or NRE account.
Between FCNR and NRE accounts, how do I
decide where to place my money?
If the rupee depreciates the NRE holder loses while the
FCNR holder is protected. If the Foreign currency depreciates
the FCNR holder loses while the NRE holder is protected. The
NRE account pays a higher rate of interest than the FCNR
account.
Along with the above factors you should also consider the
fact that you can book forward contracts.
Depending on your personal situation, investment objectives
and appetite for risk you should be able to decide where to
put your money. However, it may be a good idea to get
professional advice.
What happens to my FCNR deposit when I
come back to India for good?
If you wish your FCNR deposit can continue till maturity at
the contracted rate of interest. However, for all other
purposes such deposits would be treated as resident deposits
from the date of your return of to India. On maturity, the
deposit should be converted into a resident Rupee account or a
Resident Foreign Currency account RFC account (if you are
eligible).
What is PIO Scheme?
The Indian Citizenship Act, 1955
does not permit dual citizenship. A person may be non-resident in India
but still retain his Indian citizenship. However, sometimes the NRI opts
to change his citizenship. Once an NRI opts for citizenship of another
country, he ceases to be a citizen of India. In law, there is no
difference between a foreign citizen of foreign origin and a foreign
citizen of Indian origin. The foreign citizen must comply with several
rules and regulations which an Indian citizen need not comply with. Eg
Indian citizens do not require visa to visit India. This creates several
problems for those NRIs who are not Indian citizens. With a view to assist
them and to make their visits trouble free, the government has come out
with a Person of Indian Origin ( PIO ) Card scheme. This article aims to
give a synopsis of the PIO scheme.
The PIO scheme has come into
effect from 31 March, 1999.
For the purposes of this scheme,
certain terms have been defined. We shall discuss some of the more
important ones :-
"Indian Mission" means the
Embassy of India / High Commission of India / Indian Consulate in a
foreign country.
"Person of Indian Origin"
means a foreign citizen (not being a citizen of Pakistan, Bangladesh and
other countries as may be specified by the Central Government from time to
time) if,
- he/she at any time held an Indian passport;
or
- he/she or either of his/her parents or grand
parents or great grand parents was born in and permanently resident in
India and other territories that became part of India provided neither
was at any time a citizen of any of the aforesaid countries; or
- he/she is a spouse of a citizen of India or
a person of Indian origin covered under (i) or (ii) above.
Accordingly, Persons of Indian
Origin upto the fourth generation (great grand parents) settled throughout
the world may obtain benefits under this scheme.
"PIO Card" means a card
issued under this Scheme.
Form of application for issue /
renewal of a PIO Card
An application for issue/ renewal
of a PIO Card must be made in the prescribed form and must be accompanied
by documentary evidence to show that the applicant is a person of Indian
Origin.
Authority to which application is
to be made
An application for issue of a PIO
Card must be made to an Indian Mission in the country where the applicant
is ordinarily resident.
Applicants already in India on
Long Term Visa (more than one year) must make the application for issue of
a PIO Card to the following authorities:-
- Those residing in :-
|
(a) |
Delhi |
- |
Foreigners Regional Registration Officer, Hans
Bhavan, I.P. Estate New Delhi- 110002 |
|
(b) |
Mumbai |
- |
Foreigners Regional
Registration Officer, Annexe II, Commissioner of Police, Craw Ford
Market, Mumbai-400001 |
|
(c) |
Calcutta |
- |
Foreigners Regional
Registration Officer 237, Acharya Jagdish Chandra Bose Road
Calcutta- 700020 |
|
(d) |
Chennai |
- |
Chief Immigration Officer,
Bureau of Immigration, Shastri Bhavan Annexe, No. 26 Haddows Road,
Chennai-600006 |
-
Those residing in areas other
than (A) above:-
Joint Secretary (Foreigners), Ministry of
Home Affairs, Ist floor, Lok Nayak Bhavan, Khan Market, New
Delhi-110003.
Authority to grant a PIO
Card
The authority to grant a PIO Card
shall be an officer in an Indian Mission notified for the purpose or the
Joint Secretary Ministry of Home Affairs, Government of India or the
Foreigners Regional Registration Officer, New Delhi, Mumbai, Calcutta or
the Chief Immigration Officer, Chennai.
Validity of PIO
Card
A PIO Card shall be valid for a
period of twenty years subject to the validity of the passport of the
applicant.
Fees
A fee of US$ 1000, inclusive of
US$ 250 (non-refundable) as processing fee, will be payable alongwith the
application. In case of rejection of the application, US$ 750 shall alone
be refunded to the applicant.
Facilities to be extended to a
PIO Card holder
A PIO Card holder shall not require a visa to visit India.
A PIO Card holder will be exempted from the requirement of
registration if his stay in India does not exceed 180 days.
In the event of continuous stay in India of the PIO Card holder
exceeding 180 days, he/she shall have to get himself/herself registered
within 30 days of the expiry of 180 days with the concerned Foreigners
Registration Officer at District Headquarters.
A PIO Card holder shall enjoy parity with NRIs in respect of all
facilities available to the latter in the economic, financial and
educational fields except in matters relating to the acquisition of
agricultural / plantation properties. These facilities will
include:-
- Acquisition, holding, transfer and
disposal of immovable properties in India except of
agricultural/plantation properties;
- Admission of children in educational
institutions in India under the general category quota for NRIs-
including medical/engineering colleges, IITs, IIMs etc.
- Various housing schemes of Life Insurance Corporation of India,
State Governments and other Government agencies
However, no parity shall be allowed in the
sphere of political rights.
- All future benefits that would be extended to NRIs would also be
available to the PIO Card holders
Cancellation of PIO
Card
The Central Government may, by
order , cancel the PIO Card, if it is satisfied that:
- the PIO Card was obtained by means of fraud, false representation or
the concealment of any material fact; or
- the PIO Card holder has shown himself by act or speech to be
disaffected towards the Constitution of India and other laws of India;
or
- the PIO Card holder is a citizen or subject of any country at war
with, or committing external aggression against India; or of any other
country assisting the country at war with, or committing such aggression
against India ; or
- the PIO Card holder has been sentenced in India for indulging in
acts of terrorism, smuggling of narcotics, arms, ammunitions etc. or has
been sentenced for committing an offence punishable with imprisonment
upto one year or fine upto rupees ten thousand; or
- it is not conducive to the public interest that the person should
continue to hold a PIO Card.
No reasons shall be assigned for withdrawal
of the Card.
Please find below proforma of the Application
Form
EMBASSY OF INDIA _____ _____ _____ ______
_______ _____
HIGH COMMISSION OF INDIA ____ ______ ________
______ ___
CONSULATE GENERAL OF INDIA ____ _____ _____
_____ ______
APPLICATION FORM FOR THE
GRANT/RENEWAL OF A PIO CARD
(TO BE FILLED UP IN
DUPLICATE)
PHOTO
- (a) Name of the applicant:
(b)Surname at birth (if
any):
(c)Other names (where applicable):
(d) Date of birth:
(e)
Place of birth: (town, city, country):
- Father's / Mother's / Spouse's name & nationality:
(a)
Father:
(b) Mother:
(c) Spouse (where applicable):
- Address:
(a) Present:
(b) Permanent :
(c) Address in India
(verifiable):
- Profession or occupation:
- Business / Office address:
- Male / Female:
- Marital status: Married / Unmarried
- Nationality (at the time of birth)
- (a) Present nationality (if different):
(b) Date on
which acquired:
- Passport particulars of applicant:
(a) Passport Number:
(b)
Date of issue:
(c) Date of expiry:
(d) Country which issued the
Passport:
(e) Place of issue:
- Does the applicant hold dual nationality:
(if so, please give
details including the details of all the passports held etc.)
- Did the applicant at any time held the nationality of any country
other than the present nationality, if so, please give details including
the period:
- Whether the applicant or either of his/her parents or grand parents
or great grand parents held an Indian passport at any time, if so
details thereof:
(a) Passport Number:
(b) Date of issue:
(c)
Place of issue:
(d) Date of expiry
(Enclose photocopy of
relevant documents)
- Whether the applicant or either of his/her parents or any of his/her
grand parents or great grand parents was born and was permanently
resident in India as defined in the Government of India Act, 1935 at any
time, if so, following details may be indicated:
(i) Date & Place
of birth:
(ii) Proof of residence etc:
(Enclose Photocopy of
relevant documents)
(Note : if applicant is the spouse of a
citizen of India or a person of Indian origin, his/her particulars
should be indicated).
- Has the applicant ever been refused Indian passport/travel document
or visa for visiting India, if so, give complete details: (i.e.
place & date of application, purpose, reasons for refusal
etc.)
- Details of previous PIO Card (wherever applicable):
(a)
Date of issue:
(b) Date of expiry:
(c) Place of issue:
- Name & complete addresses of two persons known to the applicant
living in India:
(a) Name:
(b) Complete postal address:
(c)
Telephone No.
- Details and mode of payment of fee:
DECLARATION
I hereby declare that the above statements are
true to the best of my knowledge and belief.**
( Signature of the applicant)
Two specimen signature of the applicant:
- Please enclose all relevant documents substantiating your claim as a
person of Indian origin.(Please also see Col. 13 and 14).
- Attach 4 recent stamp size photographs.
** Furnishing of false information will result
in summary rejection of the application.
Note : Acceptance of application form does not
confer any right on the applicant to the PIO Card
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