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Notification: G. S. R. 354(E)
Section(s) Referred: s. 10(23D)
Statute: INCOME TAX
Date of Issue: 30/3/1999
In pursuance of clauses (a) and (d) of sub-section (1) of section 19 read with clause (a) of sub-section (1) of section 9 of the Foreign Exchange Regulation Act, 1973 (46 of 1973), the Reserve Bank is pleased to permit mutual funds as referred to in clause (23D) of section 10 of the Income-tax Act, 1961 :
(a) to issue, to non-residents of Indian nationality or origin (NRIs) or Overseas Corporate Bodies (OCBs) units or similar other instruments of Schemes approved by the Securities and Exchange Board of India subject to conditions in paragraph 2 ;
(b) to send such units/instruments out of India to their place of residence or location, as the case may be, and
(c) to make payment to non-resident investors, on repurchase of units or other instruments subject to conditions in paragraph 3.
2. The general permission granted herein to issue units is subject to the following conditions :—
(a) the mutual fund complies with terms and conditions stipulated by the Securities and Exchange Board of India;
(b) in respect of investment made on repatriation basis, the amount representing the investment is received by inward remittance through normal banking channels or by debit to NRE/FCNR account of the non-resident investor maintained with an authorised dealer in India;
(c) in respect of investment made on non-repatriation basis, the amount representing the investment is received by inward remittance through normal banking channel or by debit to the NRE/FCNR/NRO/NRSR account of the non-resident investor maintained with an authorised dealer in India.
3. The general permission granted herein to repurchase units is subject to the following conditions :—
(a) where the investment is made on repatriation basis, the amount representing the dividend/interest and maturity proceeds may be remitted through normal banking channels or credited to NRE/FCNR/NRO/NRSR account of the non-resident investor;
(b) where the investment is made by remittance from abroad through normal banking channels or by debit to NRE/FCNR/NRO account of the non-resident investor on non-repatriation basis the interest/dividend and maturity proceeds may be credited to the NRO/NRSR account of the non-resident investor; and
(c) where the investment is made by debit to NRSR account of the non-resident investor the dividend/interest and maturity proceeds shall be credited to NRSR account of the non-resident investor.
Explanation.—A person (not being a citizen of Pakistan or Bangladesh or Sri Lanka) shall be deemed to be of “Indian origin”, if—
(i) he, at any time, held an Indian passport; or
(ii) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or
(iii) that person is the spouse of an Indian citizen or of a person of Indian origin (not being a citizen of Pakistan or Bangladesh or Sri Lanka).
II. “Overseas Corporate Body” means any overseas company, partnership firm, society and other corporate body predominantly owned directly or indirectly to the extent of at least sixty per cent. by NRIs and includes an overseas trust in which not less than sixty per cent. beneficial interest is held by NRIS, directly/indirectly but irrevocably.
[No. 10/74/98-NRI]
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