NRI - NON RESIDIDENT iNDIANS, PIO - PERSON OF INDIAN ORIGINE

Who is NRI ( Non Resident Indian)WHO IS Person of Indian Origin For the purpose of investment in India in immovable property, a person of Indian origin means an individual (other than a citizen of Bangladesh, Pakistan and Sri Lanka) Indian Citizen As per Indian Citizenship Act, 1955, a person acquires citizenship of India by the following: 1. By Birth: A person who is born in India on or after 26.01.1950 2. By Descent (Heritage): A person born outside India on or after 26.01.1950 if his father was citizen by birth at the time of birth of the person. 3. By Registration: If the father is a citizen by descent, the birth of child must be registered with Indian Consulate within one year for treating him citizen by descent. 4. By Naturalization: A foreign citizen may apply for citizenship of India and if Government of India grant citizenship to such person, he becomes citizen by naturalization. 5. By Annexation: When country annexes a territory which hitherto was not considered territory of India, citizen staying in such territory automatically become citizen of India. Who is not an NRI? Indians who go abroad for either of the following purposes Tourism, Undertaking business promotion To receive/ impart training Obtaining medical treatment Participating in sports or cultural activities Indians or persons of Indian Origin residing in Nepal/Bhutan/Pakistan/Bangladesh Crew members working for Shipping/Airlines Companies posted in India and those companies whose registered offices are in India Various types of accounts that can be opened by NRI or a Person of Indian Origin (without permission from Reserve bank of India) Various types of accounts that can be opened by NRI or a Person of Indian Origin (without permission from Reserve bank of India) are as under. Deposits accounts A. Non-Resident (External) Rupee Account- NRE Account B. Non-Resident (Ordinary) Rupee Account-NRO Account C. Foreign Currency Non-Resident (Bank) Account-FCNR(B) Account Following Two schemes are discontinued with effect from 1st April 2002 D. Non-Resident (Non-Repatriable) Rupee Deposit Scheme E. Non-Resident (Special) Rupe Account Scheme. Non-Resident (External) Rupee Account- NRE Account Non-Resident Indians (NRIs) and Overseas Corporate Bodies (*OBC’s) are permitted to open and maintain these accounts. The accounts should be opened by the nonresident account holder himself and not by the holder of the power of attorney in India. Types of accounts: The accounts may be maintained in any form, e.g. savings, current, recurring or fixed deposit account etc. Joint Accounts can be opened in the names of two or more non-resident individuals. Nomination facility is permitted. Accounts will be opened in Indian Rupees. Balance in these accounts and interest accrued is repatriable. Account holder is exposed to the fluctuations in the value of Indian Rupee. Joint Account with another Resident Indian is not permitted. Permitted Credits: a) Proceeds of remittances to India in any permitted currency. b) Proceeds of personal cheques drawn by the account holder on his foreign currency account and of travellers cheques, bank drafts payable in any permitted currency including instruments expressed in Indian rupees for which reimbursement will be received in foreign currency, deposited by the account holder in person during his temporary visit to India, provided the authorised dealer/bank is satisfied that the account holder is still resident outside India, the travellers' cheques/drafts are standing/endorsed in the name of the account holder and in the case of travellers' cheques, they were issued outside India. c) Proceeds of foreign currency/bank notes tendered by account holder during his temporary visit to India, provided (i) the amount was declared on a Currency Declaration Form (CDF), ( proforma of CDF is given on the last pase of this circular) where applicable, and (ii) the notes are tendered to the authorised dealer in person by the account holder himself and the authorised dealer is satisfied that account holder is a person resident outside India. d) Transfers from other NRE/FCNR accounts. e) Interest accruing on the funds held in the account. f) Interest on Government securities and dividend on units of mutual funds, provided the securities/units were purchased by debit to the account holder's NRE/FCNR account or out of inward remittance through normal banking channels. *Overseas Corporate Bodies (OBCs) are bodies predominantly owned by individual s of Indian nationality or origin resident outside India and include overseas companies, partnership firms, societies and other corporate bodies which are owned , directly or indirectly, to the extent of 60% by individuals of Indian nationality or origin resident outside Indians also overseas trusts in which at least 60% of the beneficial interest should be actually held by them and not in the capacity as nominees. g) Maturity proceeds of Government securities including National Plan/Savings Certificates as well as proceeds of Government securities and units of mutual funds sold on a recognised stock exchange in India and sale proceeds of units received from mutual funds, provided the securities/units were originally purchased by debit to the account holders's NRE/FCNR account or out of remittances received from outside India in free foreign exchange. h) Refund of share/debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from other NRE/FCNR account of the account holder or by remittance from outside India through normal banking channels. i) Refund of application/earnest money made by the house building agencies on account of non-allotment of flat/plot, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/FCNR account of the account holder or remittance from outside India through normal banking channels and the authorised dealer is satisfied about the genuineness of the transaction. j) Any other credit if covered under general or special permission granted by Reserve Bank. Permitted Debits: a) Local disbursements . b) Remittances outside India. c) Transfer to NRE/FCNR accounts of the account holder or any other person eligible to maintain such account. d) Investment in shares/securities /commercial paper of an Indian company or for purchase of immovable property in India provided such investment/purchase is covered by the regulations made, or the general/special permission granted, by theReserve Bank. e) Any other transaction if covered under general or special permission granted by the Reserve Bank.