Ans. Two types of rupee accounts viz. Non resident (external) Rupee Accounts (NRE) and Ordinary Non-Resident Rupee Accounts (NRO) are permitted to be maintained by NRIs. Funds in NRE Account are repatriable.

Q.Can proceeds of foreign currency notes/travelers cheques be credited to NRE accounts without any restriction?

Ans. Authorised dealers have been permitted to credit the proceeds of foreign currency notes/travelers cheques brought by the account holder from abroad during his visit to India provided they are tendered in person. Where the amount of foreign currency notes tendered exceeds U.S.$5000 or its equivalent or the total amount of currency notes and travelers cheques tendered for credit to NRE accounts exceeds US $ 10,000 or its equivalent, it should have been declared to the Customs on the Currency Declaration Form (CDF) at the time of the account holder's arrival in India.

Q. Can an NRI authorise a close relative to operate his NRE account?

Yes, by giving a Letter of Authority in the specified format to the Branch in which he is having his account. The authority to operate the account is only for local disbursements. The close relative who is authorised will not have the power to make gifts, transfer the account or close the account.

Q. What is the distinction among NRE account and NRO account?

Ans. Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account are not generally repatriable. Repatriation of balances held in NRO accounts is allowed subject to certain conditions. Funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can be credited to NRE accounts. Funds due to the non-resident account holder which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts. The interest income earned on NRO attract income tax deduction at source.

Q. What are the conditions regarding repatriation of balances in NRO accounts?

Repatriation is allowed upto US dollars 1 million per calendar year for any purpose from the balances in NRO accounts subject to payment of applicable taxes. The limit of US dollars 1 million includes sale proceeds of immovable properties held by NRIs/PIOs for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI/PIO for the balance period.

Q. Can NRO/NRE accounts be maintained by NRIs jointly with residents?

Ans. NRO accounts can be held jointly with residents. However, NRE accounts cannot be held jointly with residents. It can be held jointly only with NRIs.

Q. What are the admissible debits and credits to NRE accounts?

Ans. Debits for local payments/investments are allowed freely. Credits to an account, of funds emanating from a local source would be permissible only if the funds are of a repatriable nature i.e. funds which are eligible to be remitted abroad.

Q. What is the status of NRO/NRE accounts on the return of the account holder to India?

Ans. Banks redesignate such accounts as resident accounts on return of the account holder to India.

Q. Does the account holder suffer any loss of interest on such redesignation of accounts?

Ans. No. We pay interest at the contracted rate till the maturity of the deposit if the deposit is held for the full term even after conversion into resident rupee account.

FOREIGN CURRENCY ACCOUNTS

Q. Can accounts be maintained by NRIs in foreign currencies?

Ans. Yes. Accounts in foreign currencies (FCNR accounts) can be maintained by NRIs with banks in India. At present such deposits are permitted in USD, GBP, Euro,  JPY, AUD & CAD.

Q. Are FCNR accounts permitted to be maintained in the form of current/savings accounts?

Ans. No. FCNR accounts can be maintained only in the form of `term deposits, i.e. a deposit kept for fixed periods ranging from 12 months to 60 months.

Q. What is the status of FCNR accounts on the return of the account holder to India?

Ans. Banks would treat the deposits held in FCNR accounts as resident deposits but would continue to pay interest at the contracted rate till maturity of the deposit.

Q. Do non-resident Indian citizens require permission of Reserve Bank to acquire residential/commercial property in India?

Ans. No.

Q. Do foreign citizens of Indian origin require permission of Reserve Bank to purchase immovable property in India for their residential use?

Ans. Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bonafide residential purpose. They are, therefore, not required to obtain Permission of Reserve Bank.

Q. Can sale proceeds of such property if and when sold be remitted out of India?

Ans. They may repatriate sale proceeds of immovable property acquired in India to the extent of repatriable funds used for acquiring the property, without any lock in period, upto two residential properties. The balance amount will be repatriable through NRO account subject to conditions applicable for repatriation of balances from NRO accounts already mentioned.

Q. Can the properties (residential/commercial) be given on rent if not required for immediate use?

Ans. Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation.

FACILITIES TO RETURNING INDIANS

Q. Are Returning Indians permitted to retain their assets abroad even after return to India?

Ans. Effective 17th July 1992, the Central Government has granted exemption from the surrender requirement to persons who return to India after a continuous stay abroad of one year and above in respect of funds/assets acquired by them abroad otherwise than in contravention of FERA 1973 or our of foreign exchange earned through employment, business or vocation outside India taken up or commenced while they were resident outside India. Persons satisfying the conditions of general exemption can retain their foreign currency accounts with banks abroad and/or hold, transfer or dispose of their other foreign currency assets such as shares, securities or investments in business, etc. and immovable properties.

Q. Do they enjoy any freedom in regard to utilization of these overseas assets?

Ans. Yes. They would enjoy complete freedom for utilisation of these assets as well as income earned or sale proceeds received subsequently.

Q. Can they bring back the funds to India and hold them with separate account?

Ans. Yes. They can repatriate these funds to India and hold them separately with authorised dealers under the Resident Foreign Account Scheme.

B. RESIDENT FOREIGN CURRENCY (RFC) ACCOUNT

Q. What is the Resident Foreign Currency (RFC) Accounts Scheme?

Ans. This is a Scheme by Reserve Bank permitting persons of Indian nationality or origin, who have returned to India on or after 18th April 1992 for permanent settlement (Returning Indians), after being resident outside India for a continuous period of not less than one year to open foreign currency accounts with banks in India for holding funds brought by them to India. Persons who have returned to India before 18th April 1992 can also open RFC account if (a) they are holding foreign currency assets abroad with Reserve Bank's permission or (b) are in receipt of pension or other monetary benefits from their erstwhile employers abroad. We accept RFC in USD in SB Account and Term Deposits for 6 months to 36 months.

Q. What funds can be credited to RFC accounts of Returning Indians?

Ans. The entire amount of foreign exchange brought to India at the time of their return to India for permanent settlement as well as the balances standing to the credit of their NRE and FCNR accounts at the time of return can be credited to RFC accounts. However, the foreign exchange brought to India in the form of foreign currency notes/bank notes/travelers cheques should have been declared to Customs at the time of arrival on the Currency Declaration Form (CDF) if it exceeded U.S. $ 10,000 or its equivalent . In the case of foreign currency/bank notes, such as declaration of form CDF is compulsory if the amount exceeds U.S. dollar 5,000 or its equivalent.

Q. Can income received from their overseas assets in the form of dividends etc., or sale proceeds of such assets be credited to RFC accounts?

Ans. Yes. The entire income from such assets or sale proceeds of such assets repatriated to India can be credited to RFC accounts.

Q. Can pension received by the account holder from abroad be credited to his RFC account?

Ans. Yes. The entire amount of pension received from abroad can be credited to his RFC account.

Q. Can funds in RFC accounts be remitted abroad?

Ans. Yes. Funds in RFC accounts can be remitted abroad for any bonafide purpose of the account holder or his dependents including exchange required for travel and other personal purposes and investments.

Q. Can persons who have returned to India after a short assignment of less than one year open RFC accounts?

Ans. Their applications for opening such accounts would be considered by Reserve Bank....

IMPORT of GOLD as BAGGAGE

Who can import gold as baggage?

 Any passenger of Indian Origin or a passenger holding a valid passport, issued under the Passport Act, 1967, who is coming to India after a period of not less than six months of stay abroad; and short visits, if any, made by the passenger during the aforesaid period of six months shall be ignored if the total duration of stay on such visits does not exceed thirty days.

Other Conditions

(i)     The duty shall be paid in convertible foreign currency.

(ii)   The weight of gold (including ornaments) should not exceed 10 kgs. per passenger.

(iii)    The passenger should not have brought gold or other ornaments during any of his visits (short visits) in the last six months i.e. he has not availed of the exemption under this scheme, at  the time of short visits.

(iv)    Ornaments studded with stones and pearls are not allowed to be imported.

(v) The passenger can either bring the gold himself at the time of arrival or import the same within fifteen days of his arrival in India as unaccompanied baggage.

(vi) The passenger can also obtain the permitted quantity of gold from Customs  bonded warehouse of State Bank of India and Metals and Minerals Trading Corporation subject to conditions (i) and (ii)above. He is required to file a declaration in the prescribed Form before the Customs Officer at the time of arrival in India stating his intention to obtain the gold from the Customs bonded warehouse and pay the duty before clearance.

Note:- The Jewellery which is in addition to the jewellery otherwise allowed without payment of duty, only is liable to payment of duty under the above mentioned scheme

REMITTANCES

Q. Whether the pension payable in India to NRI can be Remitted abroad?

Ans. Yes. Authorised dealers can permit remittance of pension to NRIs provided the person concerned has no other income in India. If, however, the NRI has any other income in India, the amount of pension should be credited to his NRO account and his net income including pension is allowed to be remitted after payment of applicable taxes.