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1. Remittance from Non Resident for not permitted businesses/activities in India

(i) Non Resident is not permitted to invest in the following businesses and activities

(a) Business of Chit fund company

(b) Business of Nidhi company

(c) Business of Real estate trading

(d) Construction of farm house

(e) Trading in Transferable Development Rights (TDRs)

(ii) Business of Real Estate Trading is not including the followings:-

(a) Development of townships, construction of residential and commercial premises ,  roads and bridges in India

(b) Henceforth non-resident is permitted to develop the townships, construction of residential and commercial premises , roads and bridges in India

2. Remittance from Non Resident for permitted businesses/ activities in India

(i)Non Resident is permitted to remit from outside India through normal banking channels

(ii) And also to Debit to the following  accounts

(a) FCNR (B) Account

(b) NRE Rupee Account

(c) NRO Rupee Account

3. Remittance to Non Resident against the sale proceed of Asset in India

(i) AD Bank is permitted to remit against the sale proceed of assets.

(ii) Assets are including the followings:-

(a) Deposit with bank , partnership firm or company

(b) Balance in provident fund or superannuation benefits

(c) Amount of claim or maturity proceeds of Insurance policy

(d) Sale proceeds of shares, securities, immovable property or any other asset

(iii) AD bank is permitted for remittance in accordance with the provisions of Act, Rules or Regulations of the RBI

4. Remittance from NRO Rupee Account in India

(i) AD bank is permitted to remit from NRO rupee

(ii) However AD bank is not permitted to remit to the citizen of Nepal or Bhutan.

(iii) List of eligible persons for remitting from India is following:-

(a) Retired person from employment in India

(b) Person who had acquired the credit into NRO rupee account when he was resident in India

(c) Person who had acquired through inheritance from a person who was resident in India

(d) Widow as resident outside India who had inherited the assets of her deceased husband

(e) Person who has come to India for study/training and also completed his study/ training

5. Remittance with approval from the RBI

(i) AD bank is permitted for a remittance where amount is exceeding USD 1 million per financial year from NRO rupee account with approval from the RBI

(ii) AD bank is permitted for a remittance where amount is required for not permitted purpose with approval from the RBI

6. Computation of Monetary Limit USD 1 Million Per Financial Year

  • Monetary limit USD 1 million is not including the sale proceed of shares and immovable properties which have already acquired by direct remittance through banking channel in foreign currency on repatriation basis.

7. Remittance in Installments from Non Resident of India

  • Remittances in installment are permitted through same authorized dealer bank only.

Remittance and Banking by Non Resident of India

8. Remittance of USD 1 Million to outside India by NRI / PIO

  • NRI / PIO is not permitted to remit exceeding USD 1 million without approval from the RBI against the followings:-

(i) Out of the balance available in NRO rupee account

(ii) Out of Sale proceeds of assets acquired by way of inheritance, legacy or settlement with the close relatives

9. Lock-in-Period for NRI / PIO

  • NRI / PIO is permitted to remit against sale proceeds of immovable property purchased by him out of rupee funds without lock-in-period but within USD 1 million per financial year

10. Remittance against Sale Proceeds of Residential Property as Purchased in Foreign Exchange

(i) NRI / PIO is permitted to remit sale proceeds of residential property purchased in Foreign exchange restricted to amount paid at time of purchase in foreign exchange.

(ii) However balance sale proceeds over and above amount paid at time of purchase is to be credited to NRO rupee account

(iii) Remittance against NRO rupee account is permitted USD 1 million per financial year

11. List of Eligible Repatriation

(i) AD bank is permitted without monetary limit USD 1 million for the following repatriations

(a) Out of refund of application or earnest money

(b) Out of purchase consideration paid by house building agencies/seller on account non allotment of flat , plot or cancellation of booking or deal for purchase of residential or commercial property along with interest, if any without monetary limit as prescribed through NRO rupee account i.e. USD 1 million per financial year

(ii) However original investments should be made out of FCNR (B) account , NRE rupee account or direct remittance from outside India

(iii) Moreover NRI/PIO is also permitted to get credit into FCNR (B) account or NRE rupee account instead of remittance outside India with the submission of Form – 15 CA and CB to the AD- bank

12. Remittance against Sale Proceeds of Residential Accommodation Purchased through Bank Loan

(i) AD banks is permitted to remit the sales proceeds of residential accommodation as purchased through bank loans after making payment against outstanding loan

(ii) However loan should be repaid through direct foreign inward remittances , debit to FCNR (B) account or NRE rupee account

13. Remittances against the Current Incomes

(i) Current Incomes Includes the followings:-

(a) Rental Income

(b) Dividend Income

(c) Pension Income

(d) Interest Income

(ii) Remittances against the current incomes are permitted without monetary limit e USD 1 million per financial year

(iii) Moreover remittance against current incomes is also permitted without routing through NRO rupee account

14. Credit of Current Incomes into NRE Rupee Account

(i) NRI / PIO is also permitted to get credit against the current incomes into NRE rupee account where AD bank is satisfied that credit represent current incomes only

(ii) And also Tax Deducted at Source (TDS) is to be deducted and deposited with the Income tax deptt.

15. Issue of the International Credit Cards to NRI / PIO

(i) AD banks is permitted to issue an International Credit Cards to NRI/PIO without approval from the RBI

(ii) (a) However settlement of International credit Cards should be made through direct foreign currency inward remittance

(b)  Or debit to FCNR (B) account, NRE rupee account or NRO rupee account as maintained in India

 Banking Facilities for Returning NRI / PIO to India

1. Banking Facilities for Returning NRI / PIO to India

(i) (a) Returning NRI / PIO is permitted to continue to hold , own , transfer or invest in foreign currency outside India

(b) Or in Foreign Security or immovable property outside India

(ii) However these assets should be acquired during his non-resident of India status

2. Resident Foreign Currency (RFC) Account for Returning NRI / PIO to India

(i) Returning NRI / PIO is permitted to open, hold or maintain a RFC account for transferring his balance available in existing FCNR (B) account or NRE rupee

(ii) And also NRI/PIO is permitted to get credit into RFC account out of sale proceeds of the assets as held outside India

(iii) (a) Balance available in RFC account is permitted as free from all restrictions regarding utilization

 (b)  And also for investment in any form outside India

(iv) Types of RFC Account are followings:-

 (a) Current Account

(b) Saving Account

(c) Term Deposit

3. Change of Residential Status from NRI / PIO to Resident of India

(i) Impact on NRE Rupee Account

(a) NRE rupee account is to be redesigned as resident rupee account on change of residential status

 (b) Or Funds is to be transferred to RFC account

(ii) Impact on FCNR (B) Account

(a) Deposits in FCNR (B) account is to be allowed to continue till date of maturity where depositor  so desired

(b) However provisions relating to rate of interest and also reserve requirements against FCNR (B) account is to be treated as resident rupee deposits account from the date of returning NRI / PIO to India

(c) Moreover AD banks is required to convert the FCNR (B) account on maturity into resident rupee deposit account Or in RFC account in India

(d) Henceforth new rate of interest is to be applicable after conversion into resident rupee account Or in RFC account in India

(iii) Impact on NRO Rupee Account

(a) NRO rupee account is to be redesigned as resident rupee account Or in RFC account in India

(b) Henceforth new rate of interest is to be applicable after conversion into resident rupee account Or in RFC account in India

(Author can be reached at email address satishagarwal307@yahoo.com or on Mobile No. 9811081957)

Disclaimer : The contents of this presentation are solely for informational purpose. Neither this presentation nor the information contained herein constitutes a contract or will form the basis of a contract. The material contained in this presentation does not constitute/substitute professional advice that may be required before acting on any matter. While every care has been taken in the preparation of this presentation to ensure its accuracy at the time of publication, Satish Agarwal assumes no responsibility for any errors which despite all precautions, may be found herein. In no event shall we be liable for direct or indirect or consequential damages, if any, arising out of or in any way connected with the use of this presentation or the information contained herein.

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