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Can I maintain (continue) an LIC policy that I had taken out on myself, while being resident in India, now that I am a non-resident? If the answer is no, then are there any legal implications / penalities for having continued this LIC policy (e.g. by paying premiums etc)? Unfortunately, I am unable to find this information on the LIC website.

As for as the Foreign Exchange Management Act, 1999 is concerned, in terms of Section 6 sub-section 5 you can continue any of your property acquired while you were Resident in India. However, continued acceptance of LIC Policy depends on the terms and conditions, if any, imposed by LIC in this regard. You may disclose your correct status now to LIC and ask for procedure to be complied specifically with regard to LIC policies.

I am interested in investing in the Indian stock markets through an NRE account. What account do I need and where can I get more information on setting them up?

NRIs are permitted to invest in Indian Stock markets in recognized Stock Exchanges through registered stockbrokers. You can contact any of the registered stockbrokers of exchange and get to know the procedures of operating.

I am an NRI and I have invested my foreign income in a residential property in India. I have given that property on rent, which is being deposited into my NRO account in a bank in India. Now I want to repatriate the rental income abroad. I am regularly paying income tax on the rental income. I have filed the income tax returns showing the source of income as foreign money for acquiring the property. Please advise me the procedure to repatriate regularly the rental income abroad.

Rental income -- being Current Account Transaction - is freely repatriable, net of taxes. You may contact your banker for complying with procedure for remittance.

I am working in US, and would like to buy property (say land, with no house) in Bangalore. After I sell my property, if I get profit in rupees, can I convert that back into US dollars? Do banks in India give me loan based on my income in US? When I sell the land, what are the tax consequences?

If you are an NRI or Person of Indian origin you can invest in land (other than agricultural, plantation or farm house). Repatriation of sale proceeds is permissible up to the amount of foreign exchange used for acquisition. Banks generally do not lend for purchase of land; however, loan based on assets/earning potential may be possible. This should be ascertained from the Bank concerned. Sale of land within 3 years of acquisition will render it a short-term capital gain taxable at normal slab rates. If held for more than 3 years, indexation benefit is admissible on cost of acquisition and rate of tax would be 20% + applicable surcharge and cess.

I loaned about Rs. 7 lakhs two years ago to a friend out of NRE Account in terms of demand draft payable to him. He wants to return the money to me now. There was no written documentation or any interest charge involved (interest free loan). Since I cannot have the money deposited in NRE account, what are my options now? Just for your information he used the money to invest in a property on which he lost money (sold for less than original purchase price) but I was not involved in the property purchase. My parents are in India and have their savings account.

Two things are to be complied with: (i) The loan amount cannot be repatriated outside India and (ii) the credit of loan repayment shall be made NRO account of yours already with your banker or opened for this purpose.

I would like to sell property that I have inherited from my father. The property was purchased for Rs 1 lakh 20 years ago and has a current market value of Rs 50 lakh. In regards to the repatriation of funds, what do I have to do? Do we need to have PAN number to the sell the asset? I don't have this number as I left India when I was a minor and never paid any tax in India. In my case, I am not interested in reinvesting money in India and want to transfer the funds to Australia. Please advise.

As long as you give the proof of inheritance to your banker, the sale proceeds to the extent of your share of inheritance can be freely repatriated, complying with the procedures for remittance with bankers.

I had opened a regular demat account and had esops credited there (the esop is of a listed company and I do hold Indian passport) while I was still resident. I have become an NRI since and have now been filing IT returns as NRI for last two assessment periods. However I have not been able to change my bank accounts and demat accounts to NRI as these need a lot of documentation verification and banks do not do them over email. Therefore from the perspective of IT I am an NRI and have been paying additional self-assessment taxes @ 30% on my term deposits etc even though the TDS is 10% as my banking accounts remain resident and there is no tax evasion. Now I would like to sell the esops and transfer the proceeds over to the US as I need funds here as I want to go in for higher education etc.

SO - Can I sell my esops as it is today from my resident demat accounts and the proceeds will be transferred to my resident bank account and then can I get dollars to the US? If so how much funds can I repatriate into the US? Will there be any repercussion if I do this route? If for the sake of getting dollars into the US I need to transfer my accounts to NR banking and NR demat accounts, then will I be able to transfer my existing ESOP holdings in my demat account to NRI status also (as I would need to open fresh NR accounts for banking and demat) and if so how do I do that? Now I am eligible for more ESOP. Should I credit into the same account or should I open new non-resident accounts before I credit the same?

Factually, you are a non-resident by status under the Foreign Exchange Law, since you have been in employment abroad. Consistent with this factual position, you need to designate your account (s) with your Bank as NRO account. Once you do that you can sell your shares and deposit them into NRO account, from out of which you are permitted to repatriate them, following the remittance procedure prescribed by Bank. You may discuss with your Bankers, your programme and your willingness to repatriate, and, they will guide you as per permitted procedures prescribed by law.

I understand only NRE account can repatriate funds. Can NRO accounts also repatriate funds to the US to the tune of 1mn US$?

Yes. Repatriation is permitted up to US $ 1mn from out of NRO account. The liberalised remittances facilities to NRIs/PIOs are allowed vide Circular # 67 dated January 13, 2003 read with Circular # 62 of January 31, 2004. The remittances (which includes sale proceeds of assets / shares or securities could be made by following the remittance procedures prescribed by Banks.

My son is getting married. He is a British National. The girl is Indian National. When she is coming here after marriage can she bring her savings here and is there a limit?

There are two ways: - (i) Once the daughter-in-law goes abroad, she will be an NRI and can designate her account into an NRO account, and repatriate from out of NRO account up to $ 1 million for bona fide purposes (ii) Alternatively, up to $ 25,000 any resident can take foreign exchange subject to conditions prescribed by bankers.

I am working in Saudi Arabia for last 20 years.I had opened a PPF account in India in my name 17 years ago. I have been making regular yearly contributions to it to the maximum amount permissible. Two years ago, after the completion of 15 years, I applied for and got extension of the account for 5 years till year 2008. I now understand that NRIs are not permitted to invest in PPF account. My query is this-does it pertain to existing PPF accounts or only to new accounts? In other words, can I keep investing in my PPF account till its tenure till 2008? I would like to do so because of handsome return of 8% per annum. If not permissible, then what will happen if I don't pay yearly contributions? Please advise.

NRIs are not permitted to invest in PPF accounts. Such prohibition applies to existing account for continued investments, as well as new accounts. You may close the PPF account and hold the funds in non-repatriable account in India. The spirit of restricting NRIs from investing in PPF accounts itself is the interest rate advantage that it offers. Therefore, as long as you do not seek repatriation on this prohibited account, the funds so far accumulated can be held in any other non-repatriable deposit account, which you may work it out with your banker in India.

Whether banks operating NRI Accounts are allowed to hold funds if a single deposit exceeds $5000.00. If so, how long and is this really the policy RBI requires banks to have?

There is no such limit, in so far as Exchange control laws are concerned. This is essentially left to bankers, subject to their regulation from RBI. You may ask the banker about the ceiling limits.

How can an NRI apply to Indian public issues online or otherwise?

NRIs are permitted to subscribe to Initial Public Issue, subject to the offer terms. You may contact a registered broker in recognized stock exchange and invest from out of your foreign currency account in India.

I am a NRI and would like to gift to a minor (my nephew) who lives in India. The gift ideally would be in the form of a savings or educational savings account preferably denominated in USD. Is this possible, what is the best way to go about this, and if not, what alternatives do I have (example, a Rs. account)?

There is no ban in your giving gift out of natural love and affection to your nephew. The gift can be made in USD through normal banking channel.

Please clarify as to what you mean by "educational savings account". If you desire to gift some money and the donee accepts the same, the transfer is complete and the donee (your nephew) can maintain the same as per his wish. However, if you wish to maintain some account and donate later, then you may maintain at your place or in a bank in India in your own account, till you decide the time when do you want to gift. The middle position of gifting the money and yet having control will be an ambiguity in law.

I would like to open a repatriable account with Citibank. I want to know is if I deposit a certain sum in dollars into that account, can I take a rupee loan keeping the deposit as collateral and repay the loan in rupees along with interest in India and can still have my repatriability intact?

Yes. Repatriability of accounts are increasingly getting liberalized. Loans are also permissible for Account holders, except for re-lending or for investment in agricultural, plantation activities or for investment in real estate business. You may contact your bankers for compliance with procedures in this regard, clearly specifying your requirement.

As an Indian resident, I had opened PPF accounts for myself and family members. After few years, I have migrated to Australia and taken the Australian citizenship. Can I continue to contribute to the PPF accounts from my Rupee savings accounts? If no, then how about the rule that contributions must be made every year to PPF accounts?

No. Investment in PPF Account is not permissible for you. You may contact your bankers about your status and inform them about the ban on investment by non-resident, and comply with procedures, if any, as per PF rules for closure of accounts.

I am a U.S.Citizen and am a nominee for a demat account held in my late husband's name. I have applied for change of ownership and have opened an NRO account at Citibank for the dividends to be invested. Can I nominate my niece who lives in India as a mandatee and can she operate the account and use the funds as she pleases? What happens to the account when I die? Can I have my daughter who is also a U.S. citizen be a joint owner and can she make her daughter a joint owner on my death? I am a first generation immigrant to the U.S. Also, can my 2 daughters open separate NRO accounts and deposit proceeds from their deceased father's home in India and is that amount repatriable?

(i) Yes. The NRO Account Rules permit that the Account may be held jointly with residents. Thus, you may have the account jointly with your niece. The operation -- both credit and debits -- is strictly subject to rules in this regard.

(ii) As per NRO Account Regulations, the amount due to non-resident nominee from the Account of the deceased account-holder, shall be credited to NRO account of the nominee with the Bank in India, In case of joint accounts, when the Account holder dies, the Account will be continued to be owned and operated by the other joint-holder if it is marked 'either or survivor' If it is not so mentioned, then the Legal Heir, on producing proof to the satisfaction of the Bank, can make a claim to that Account.

(iii) There is no specific provision for joint ownership with non-residents, although the regulations permit joint ownership of Non-resident Account-holder with another Resident. You may contact your bankers for any directions in this regard. However, non-residents are permitted to open separate Accounts for themselves.

(iv)Your two daughters can open separate NRO accounts and deposit proceeds from their deceased father's home in India. The said amount is also repatriable.

I am a recent NRI account holder. I wish to trade on the Indian Stock Market as a speculator. Is this permitted? If so how do I locate a trader and where can I review the share movements?

NRIs are permitted to purchase / sell shares in Stock Exchanges in India, subject to certain conditions. You may contact a registered Stock Broker, in any recognized Stock Exchange for further details.

I had a resident savings account till the time I was in India and which I did not convert to NRO account, because I was not aware of the rule to do so. Furthermore, there has been one transaction in that account after I left India, i.e. salary accrued from my previous job credited to that account. The account since then has been inactive. That was four years back. When I got to know about the rule that NRIs need to convert resident accounts to NRO, I immediately sent a letter requesting the bank to close my account, which they did. However, for the available funds in the account, they issued a bank draft in my name. Now, how do I handle this bank draft? Am I allowed to deposit this in to my NRE account? Can I withdraw this cash in any manner, e.g. for spending in India? Does this require prior RBI approval?

You should have designated the your then existing Account into an NRO account. It does not matter. Now you may request your banker to open one NRO account and deposit this draft, giving particulars to them and be done with it. There is no serious violation, except minor procedural lapse.

When I closed an ex-resident savings account, I was issued a bank draft in my name for the available funds. Can I deposit the draft and such funds to my NRE account? I do not have an NRO account at all, only an NRE account.

NRE Account credits are funds deposited from out of India in permitted foreign currencies. Therefore, it would be advisable to open an NRO account and deposit the draft into that account. NRO account permits credit of any legitimate dues in India of the Account holder.

Our daughter was born in the US while were there on a assignment. By birth, she is an American. Can she invest in PPF or other investment instrument?

A foreign citizen cannot invest in PPF. "Other investment instrument' depends on the terms and conditions of such instrument. Normally Companies do not encourage investment by foreign citizen, because of difficult legal recourse against such persons.

If I have received one cheque in $, how can I encash it in my Indian bank a/c?

You may deposit in your Bank Account and obtain the Foreign Inward Remittance Certificate (FIRC), stating the purpose / source of such receipt.

Can NRIs invest in Govt of India Bonds. If not, Could they invest jointly with a resident.? What other forms of investment in India are open to NRIs?

It is to be clarified what securities are referred to as "Government of India Bonds". If it relates to Government dated securities (other than bearer securities) the NRIs are eligible to invest in such bonds, in terms of Schedule 5 of Notification 20 dated 3.5.2000. If the 6.5 % tax free or 8% (taxable) bonds are referred to as Govt.bonds, then NRIs are not eligible (either individually or jointly with residents) investments in such bonds. The various investment options in India are given under the head RBI of the FAQ section.

I am a US Citizen of Indian Origin and have been in the US for the past 15 years. Currently my brother and myself are in the process of selling our apartment in Bombay.

a) Should I open an NRO or an NRE account (with Citi) to deposit the money/proceeds of sale initially, before I can calculate my capital gains?

If the original acquisition of property is purchased in Indian Rupees, the sale proceeds, net of taxes, shall be credited only to NRO account. However, if the immovable property was purchased in foreign exchange, the sale proceeds, net of taxes, can be credited to NRE account, only to the extent of original investment in foreign exchange.

Does the conversion factor for USD and Indian rupee for a particular day vary among financial institutions? I was informed by Citi bank that their rate is lowr than the market rate. Is it true?

The RBI has now abolished dual exchange rate and the exchange rate is left to market forces.

The answer could be amplified by Citibank, on merits if they want, as it primarily relates to Banking function. The law and the regulator has only left it market forces.

I'm a student and I study in Australia. How would the new RBI's consideration of students as NRI benefit me?

Responding to representations made from Indian student community studying abroad, RBI has very recently clarified that Indian students pursuing their studies abroad are "non-residents" for the purposes of FEMA. Accordingly, such students are eligible to all facilities available to NRI under FEMA.

As non-residents, they will be eligible for receiving remittances from India, as follows : (i) up to USD 100,000 from close relatives from India on self-declaration towards maintenance, which could include remittances towards their studies also, (ii) up to USD 1 million out of sale proceeds/balances in their account maintained with an AD in India.

Authorised Dealers can allow remittance/s upto USD 1 million, for any purpose per calendar year from balances in NRO accounts subject to payment of applicable taxes. The limit of USD 1 million per year 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. Why is then we hear from banks that for NRO accounts principal is not repatriable? Some say that appropriate reasons have to be given, but RBI has written "for any purpose". Please tell us the rules in sufficient details as to what prevents an NRI from taking his own money in India and using it if he stays outside India?

The balance in the NRO Account is not eligible for remittance outside India, without RBI permission. There is no change in that at all. The fact that quantum of remittances from out of NRO account is enhanced or liberalised, does not mean RBI has changed its policy with regard to repatriability of principal amounts from NRO account itself.

Until January 2003, the remittances from out of NRO account could be made upto specified quantum, for different purposes. In January 2003, RBI has liberalised the remittances up US $ 1 million, for purposes such as, medical benefit or higher education or sale proceeds of immovable properties subject to conditions. This way, only the quantum permissible for remittance from out NRO account is enhanced to a substantial amount. The nature of the account remains the same (that is "non-repatriable") and unaltered.

I want to invest money in a company in india and how do I convert my Indian earnings into US dollars.Could you suggest ways of doing this?

If the investment is in shares of a Company in India, then dividends (being current account transaction) are freely repatriable. You may approach an Authorised Person (Banker), who will assist you subject to compliance.

I am going to USA for my MS.I want to open an account.so i can do $ transactions,i.e i can send and receive money in Rs or $ or eitherway, using a dual card,one used by me and the other used by my dad. How can this be done?

Students studying abroad are now treated as non-resident. Thus, you are entitled to open a $ account, as soon as you become a non-resident, that is, on joing MS in USA. For typical financial product like dual card, you may approach a banker offering such products.

I am a NRI planning to sell my personal property in India. If I deposit the sale proceeds in rupee in my NRO account, what is the step-by- step procedure for converting the amount (in NRO account) in US dollars and open a FCNR. What are the RBI regulations and tax consequences? What certificate do I need and from who?

Assuming that the requirements for repatriation of sale proceeds of immovable property is fulfilled, you are entitled to convert into US dollars such repatriable funds. There is nothing in law to prohibit such repatriable foreign currency to be transferred into an FCNR account. However, it is advisable in the facts of your case to take the funds back to US, and re-transmit them with a clear instruction to open a FCNR account.

The proceeds of my inheritance are currently in an NRO account. What steps do I need to take to repatriate the funds to the US?

You must get prior permission from the Reserve Bank of India to repatriate the funds, in terms of Regulation 6 (a) of the Foreign Exchange Management Acquisition and transfer of immovable property in India) Regulations, 2000.

No such prior permission is needed if the amount of repatriation, per calendar year, from out of inheritance, does not exceed US $ 100,000. RBI has given general permission, vide its Circular No.19 dated September 12, 2002, for NRIs (not being citizens of Nepal and Bhutan) / PIOs, to repatriate an amount not exceeding US $ 100,000, per calendar year, out of their inherited assets in India.

I just read about the RBI's decision to let NRIs become nominees for savings bond investment. Is it true? If yes, how can I make this investment?

There is no official communication as yet on the specific savings bond referred to. However, as and when RBI allows, you can contact your Banker in India for investment, who will be able to guide your investment, subject to the terms and conditions of such investment.

How can I invest in UTI/RBI bonds as an NRI? What website is available or contact info that can channel me to these sites for investment? 

General Permission is given to NRIs for investment in domestic mutual funds. However, the 6.5 % tax-free or 8% (taxable) bonds are referred to as RBI bonds, then NRIs are not eligible (either individually or jointly with residents) investments in such bonds.

The best source of contact is banker, through whom you can get the relevant information.

Can I have more than one NRE account in more than one bank at the same time?

Yes. There is no prohibition in opening more than one NRE account for eligible NRIs.

I came back to India couple of months back after staying in US for around 4.5 years. I have NRE rupee accounts and FCNR accounts with Citibank. Could you let me know if I need to change these accounts to some other accounts? How long I can keep these accounts?

(1) NRE Account: NRE accounts should be redesignated as resident accounts or the funds held in these accounts may be transferred to RFC account, in case you are eligible to maintain RFC account. I assume that you are going to stay in India. However, if you plan only a short visit to India, then account may continue to be treated as NRE account, even during your stay in India.

(2) FCNR Account: If you become a person resident in India, FCNR deposits may be allowed to continue till maturity at the contracted rate of interest. Such deposits will be practically treated as resident deposits on your return to India. The Bankers will convert FCNR account, on maturity, into resident rupee deposits account or RFC account, in case you are eligible to maintain RFC account, at your option.

You may contact your bankers, and, accordingly present your requirements.

Recently RBI has allowed foreign remittance by a citizen for $25,000 without any questions. How does this facility compare with allowing remittances from NRO account for education or property sale?

The official circular from RBI yet to come. Only news reports have come. Generally, remittances from NRO account are only for non-residents, whereas the present proposal to allow $ 25,000 is available for resident-citizens. Secondly, NRO account remittances are against specific purposes, whereas news report suggests no particular purpose for remittances of $ 25,000. A clear view is possible only after receipt of official circular in this regard.

I read your article on 'Remittances up to $25,000 abroad allowed'. I am a NRI staying in USA. Does this allow me to invest in Post office savings and get the amount back to USD to the extent of $25,000?

NRIs can invest only in the Government Securities, which does not specifically cover investment in Post office savings. You have to ascertain from the terms of Post Office Savings Rules or from any Post office in India, whether the said scheme is available for NRIs, and, if so whether they are repatriable. Investment and repatriation of such investment (including investment in Post Office savings, if allowed) are different from the current proposal to allow $ 25,000, which is available for resident-citizens. Official circular from RBI is awaited on this, and a clear view could be taken only after that.

I am a NRI in UK. I want to invest in Real estate and in Share market with my NRE funds. Can the funds be repatriated into pounds on sale of the real estate/shares? If so what is the procedure?

Yes, investment in real estate is possible, but repatriation is allowable only up to foreign exchange invested and not more. The remittance is also subject to income tax, if any on gains. Investment in shares of Indian companies on repatriation basis, is possible, through recognised stock exchange, through registered broker. You may contact the registered broker in any recognised stock exchange, for other procedures.

I am a NRI with a Rupee Savings account in India. The funds in that  account were acquired while I was working in India 5 years back. I am out of India for last 5 years wherein the last 4 are in US. I would like to  transfer those funds to US. What are the various heads under which I can get that amount can be converted to US dollars and transferred to my US account  (e.g. Education, Medical treatment etc.). What are the documentation  requirements? Currently I have a NRE account with Citi.

It is presumed that you had already designated your Savings account with into NRO account on your becoming non-resident. Repatriation of amounts lying in Savings account also depends on the quantum of such remittance. In the absence of these information, the following could guide you:- (i) Funds belonging to NRI could be remitted under the Foreign Exchange Management (Remittance of Assets) Regulations, 2000 up to Rs.20 lakhs per calendar year. (ii) This quantum is also now increased to US $ 100,000 per calendar year. (iii) For certain purposes, funds from out of NRO account could be remitted up to US $ 1 million per calendar year. But, this is possible only if, the existing savings account had been designated as NRO account, on your becoming non-resident. Since all these all normally, far in excess of funds held in Savings account, the remittance can be effected approaching bankers. You may approach banker for necessary documentation, which is essentially an undertaking for tax purposes only.

Are NRIs allowed to invest in Indian Stocks? Is there a way they can do online trading? Please comment on this.

NRI can invest in listed Indian stocks under portfolio investment scheme (PMS). For this purpose they should open an account with a branch of a bank in India (authorised for this purpose) and effect the transactions. On line trading may not be feasible at this stage as the bank needs to monitor each transaction of purchase.

I am an NRI. I want to invest in India, in mutual funds that are conservative & safe. Can you suggest some funds please?

It would be best if you take advice of a specialist in this area as the basis of evaluation tends to be very complex and the parameters can become very subjective. Further, options exist in the form of diversified equity, balanced and debt funds.

Also, there are RBI bond funds, the income on which is tax-free for the NRIs. 6.5% RBI relief bonds have tax-free status. However, to our knowledge, investments by NRI do not seem permitted. Kindly use the services of PMS offered by reputed banks in this regard for making the investment decisions.

I was going through RBI web site and under FAQs - Facilities available to Non-Resident Indians (NRIs)/Persons of Indian Origin (PIO) for investments in India (As on December 30 , 2003) it indicates that

Repatriation facilities

NRIs/PIOs can freely repatriate all current income, such as, rent, dividend, pension, interest, etc. Repatriation of all these is subject only to payment of taxes. NRIs/PIOs can also repatriate:

An amount of up to US$ 1 million, for any purpose per calendar year from the balances in NRO account. The repatriation is subject only to payment of applicable taxes.

Does this mean that the restriction that one can repatriate only for special reasons is now lifted? Also, can I open the NRO account now?

The purposes for which repatriation could be made are still there, but the quantum is so liberal and huge, that it virtually makes is possible repatriation on self-declaration basis, in most cases. The purposes under which US $ One million repatriated per calendar year are three: (a) Education expenses (b) Medical expenses and (c) Proceeds of Sale of immovable property.

Yes, if you are an NRI. You can even re-designate your existing savings account, if any, explaining with documents to your bankers.

I am USA citizen of Indian origin, holding a US passport and I recently got engaged to a person holding an Indian passport. She is in USA on Finacee's visa (K-1) with her daughter (K-3). If I open bank account with her name and her name only (that is, not my name at all), do I incur gift tax and what are the tax consequences of such an account? I want to protect my assets from creditors and am planning to open account as FCNR or NRE type of account in the amount of 3 to 5 million dollars.

As for foreign exchange rules are concerned, NRIs can open NRE or FCNR account as per set procedure instructed to Bankers. You may contact bankers for opening the said accounts, in the name of your to-be wife.

In so far as 'protection from creditors' is concerned, it depends on host of other factors such as the nature threat, the legal position, the Court or other order from appropriate authority, the evidences the creditors may have to trace the money in Bank Account anywhere and so on.

If I sell some property in India and want to convert & transfer the money to USA, do I have to open the A/C (NRI) and then transfer the money and get it over here in USA?

You may open a NRO account with the banker, for crediting the sale proceeds of property, from which you are eligible to repatriate up to $ 1 million of sale proceeds relating to immovable property. NRO account could be opened -- with simple procedure -- by any non-resident for putting through a bona fide transaction in India.

I have now been an NRI for 1 year. Prior to which I was in India and continue to maintain my bank accounts and investments in shares, PPF and mutual funds in India. Do I need to take any action regarding intimating my bank or the companies where I hold shares about the change of my status? Can I continue to buy/sell shares and mutual funds using my funds in India?

In terms of Section 5 of FEMA you are allowed to hold all those securities / investments that you acquired while you were resident in India. Since you are now by status an NRI, you can buy shares / invest in mutual funds disclosing your status in all those schemes where NRIs are eligible to invest and repatriate the sale proceeds.

I am holding Indian companies equity shares on demat basis with DP in India. These were bought some 30 years ago, both in Repatriable basis and NRO Basis when directly issued to NRIs.  If I want to sell these and repatriate money to Canada, what is the procedure?

Shares purchased on repatriable basis can be sold and proceeds, net of taxes, can be repatriated through bank. No permission is required if the sale of shares is to another NRI. If you sell the shares to another resident, the Reserve Bank of India (RBI) permission is required by applying in Form TS 1. RBI will give approval, after ascertaining the true value of shares.

Shares purchased on non-repatriable basis, cannot be repatriated, without express prior permission from the RBI.

I live in Canada; my parents live in India. They want to send us money. How can they send us money via proper channels i.e. through bank? What are the RBI regulations about how much money they can send to us? I don't have an NRI account; I have a chequing account with a bank in Canada.

It is not known for what purpose and up to what quantum your parents desire to remit money. However, your parents could remit up to US $ 100,000 per year towards maintenance of close relatives abroad. No permission from RBI is needed for this remittance. Your parents may approach bankers complying with the documentation they may require.

I have now been an NRI for 1 year. Prior to which I was in India and continue to maintain my bank accounts and investments in shares, PPF and mutual funds in India Do I need to take any action regarding intimating my bank or the companies where I hold shares about the change of my status? Can I continue to buy/sell shares using my funds in India?

Factually you have now become a non-resident, and as such, you have to re-designate your bank account into NRO account. Your existing bank account itself could be designated as NRO account, without any complicated procedure. You may approach your bankers. Having become a non-resident, with investment continuing as a resident would factually incorrect.

As a NRI what is the maximum amount of foreign currency that can be deposited in a bank in India? What are the requirements for accommodating a very large sum?

The regulations relating to foreign currency deposits do not specify any ceiling limit for maintaining foreign currency account. As for the requirements of bankers for maintaining large amounts you may approach bankers India of your choice.

Mr X is an Indian born, US naturalized citizen. X has two brothers who are still Indian citizen. Recently their father passed away who owned a company doing business in India. The company does not have any agricultural or real estate income.

    a)Can Mr X own part of this business (1/3 share), given that he is a US citizen?

    In terms of Section 6 (5) of the Foreign Exchange Management Act, 1999, a person resident outside India can hold, or invest in any security -- in this case shares of Indian Company run by deceased person -- if the security is inherited from a person resident in India. Thus, Mr X can inherit the security from his father.

    b) What type of account for the inherited money is Mr X allowed to open in banks in India (Resident/Non-Resident account)?

    Mr X is a person of Indian Origin, and as such, can only open Non resident account (NRE or NRO) account in India.

    c) If Mr X is allowed to open only Non-Resident account, can the income from the company be deposited to this account? Since the company is doing business only in India, the income will be in Indian Rupees and I am not sure if the rupees can be deposited in Non-Resident account.

    Yes, income from the Company can be deposited in rupees in to NRO account.

I am living in USA since last 3.5 yrs. I want to start buying/selling stocks in both Primary & secondary market in India. Can I do this from here? How?

Investment in primary and secondary market is permitted. Primary market is directly done by subscribing in foreign exchange to the company, as per the terms and conditions of Public offer document. As for Secondary market purchases are concerned, you may do so through registered brokers in recognised Stock Exchanges in India.

I am an NRI and I have opened an NRI savings account with the Citibank last December. I would like to know about the latest RBI regulation on sending money to relations and friends in India. Also, please inform me about the RBI regulations on sending money for charity purposes for the Indian residents who are, for example, socially, economically and educationally deprived.

The rules are liberal in so far as remittance to Indian residents from abroad is concerned. The remittance shall clearly specify (in FIRC - Foreign Inward Remittance Certificate) the purpose; it shall be through normal banking channel, and accounted by the beneficiary. You can donate to Charitable Institutions, which are registered under FCRA (the Foreign Contributions Regulation Act), which exist for social purpose, as, these contributions are governed directly by Home Ministry, Government of India under the said Act.

I am moving back from US to India after 2 years in the US. In what form (cashier's cheque) should I carry my US savings to India? What form of account would be best to open in India - a Resident Rupee or Foreign Currency Account?

The form is irrelevant, as long as you bring the funds in normal banking channel, in convertible foreign exchange. The nature of account depends on whether you want to go abroad again Or come to India for permanently settling down. Assuming you are moving back to India permanently it is factually correct and consistent to open only a resident rupee account. The convenient option would be to open an NRO account from abroad, transfer the money, and later re-designate the same account to Resident account, when you are back in India.

In one of the your answers concerning "proceeds from inheritance out of the NRO account" you wrote that "No such prior (RBI) permission is needed if the amount of repatriation, per calendar year, from out of inheritance, does not exceed US $ 100,000. RBI has given general permission, vide its Circular No.19 dated September 12, 2002, for NRIs (not being citizens of Nepal and Bhutan) / PIOs, to repatriate an amount not exceeding US $ 100,000, per calendar year, out of their inherited assets in India." My question is whether a Authorized Dealer (Citibank) will ask me to submit any documents when I request repatriation of inheritance (less than $100,000) from my NRO account? If so, please let me know the list of required documents that need to be submitted with my request to Citibank.

You are required to submit the following documents:

    (i) Documentary evidence to establish that the assets have been acquired by inheritance / legacy; and

    (ii) a tax-clearance / No objection Certificate from the Income tax authorities for the remittance.

I am an NRI staying in US for last 2 years. I have been remitting money to India for purchasing shares. The shares were purchased from a sub-broker (I am not sure whether he is registered or not). The shares purchased from the broker are transferred in an NRI non-repatriable account. I am not clear whether I need to take permission from RBI for dealing in shares and whether I need to apply for Portfolio Investment Services (PIN). I had inquired with bank and they had told me that there is no need for the permission. Let me know what is to be done.

There is general permission available from RBI for NRIs to purchase / sale shares of Indian companies through registered brokers in recognised stock exchanges. This general permission is subject to certain conditions (which includes that the broker shall be a registered broker). For compliance with those conditions you may contact your broker. Assuming you comply with the conditions of investment, there is no need to get specific permission from RBI.

Is there interest on Resident Foreign Currency Account?

Payment of interest depends on the nature of Resident Foreign Currency Account. Current accounts do not have interest, whereas savings account / term deposit account enjoy interest as per directions in this regard by RBI. You may check with bankers on this.

Regarding the submittal of the documents to the authorized dealers for repatriation of inherited assets, do I also need to submit the 'Form A2' and the 'FEMA declaration' in addition to the 'tax clearance' and the 'acquisition of assets' documents?

No. There is no requirement to submit Form A2 / FEMA declaration in the relevant circular by RBI. Accordingly, it would be in order to submit the documentation required in the relevant circular by RBI only, namely proof for inheritance /tax clearance.

I will have some rental income from NRI investment. Can I deposit that in my NRI or NRO account?

Yes. You can deposit your rental income into NRO account.

If I have an NRO account in India, can I deposit any payment income received from sales proceeds of property in India? If deposited in the NRO account whether it is taxable in India? Please advise full details how I can utilize the funds or in which account I can keep the money.

Yes, you may deposit sale proceeds of property in India into NRO account. Any sums received out of bonafide transactions in India can be credited to NRO account. Utilisation of money is your personal choice. You may invest in permitted investment or securities in India or if you so desire to repatriate the money abroad, you may take it abroad.

The relevant capital gains will be taxable, subject to applicable exemptions under the law. However, the amount deposited, per se, won't be taxable.

I hold an Indian passport and am currently a resident of South Korea.I have NRI status.I do have USD account in the Korean Bank.

    1.Whether I can continue to hold this account even after return to India or I have to close it?

    Yes, you can continue to hold this account even after return to India, in terms of Section 6 (4) of Foreign Exchange Management Act. Alternatively, on becoming resident you may remit these funds and open a Resident Foreign Currency (RFC) account in India.

    2.If I continue to hold the account in Korea, then how long I can do , after returning to India?

    There is no time limit prescribed for holding such foreign currency account, and, as such you can hold it as long as you want it.

    3.Can I operate this account from India for my forex requirements, which I may need later?

    Yes, up to the funds available in that account, you may operate this account from India for forex requirements.

I am a Canadian of Indian Origin. I am in recruitment business in Canada and also wish to open the office in India for the same business. Do we need any permission form RBI and from Labour Ministry? What are other formalities to be completed?

The current Foreign Direct Investment Policy covers only manufacturing and certain specific service sectors. There is no specific entry for " recruitment services ", and, therefore, you may have to apply to the Secretariat Industrial Assistance - Foreign Investment Promotion Board, for approval. Subject to the terms and conditions of the approval you may go ahead investing in the Company to be registered in India and complete post-investment formalities with RBI.

One of my friend in India is in need of US$30K for a 6~8 Months duration. I understand that there should not be any problem for remitting money. The money will not be invested in any properties / shares. Basically, I want to help him (without any interest) to settle some of his financial issues.

  1. Do have to get permission from RBI ?

    No permission from RBI is needed. Your friend (being a resident in India) can borrow from you (being a NRI or PIO), but only on non-repatriation basis. The conditions are : (i) amount of loan shall be received into India through normal banking channels (ii) the period of loan shall not exceed 3 years (iii) the amount borrowed shall not be repatriated outside India. As I told you earlier, the borrowed funds shall not be used by resident for real estate, chit fund or NIdhi fund company.

  2. Can he deposit the equivalent Indian rupees in my NRO account after 6~8 months ?

    Yes. Any legitimate due in India of the account holder is permissible credit in NRO account.

  3. Any legal issues while remitting money to the NRO account ?

    No.

I am considering opening an NRE Rupee account with Citibank India. Of course the funds will be deposited in US $, which then get converted in to Rupees by the Bank. Will this be a right type of account to open to buy the property, or should I open a foreign currency denominated account with the Indian bank?

Yes. You may open NRE account with your banker in India.

Are NRIs permitted to open Foreign currency account in India and repatriate the balance back home (outside India) if needed? If yes, name the banks. Can FTS balance be also deposited by non-NRIs in a separate account?

Yes. You may contact any banker.

I could not locate copy of FEMA, 1999 section 6(5) on RBI's web site.

  1. Do you have a copy, which you can email me?

    6 (5) " A person resident outside India may hold, own, transfer or invest in Indian currency, security or any immovable property situated in India if such currency, security or property was acquired, held or owned by such person when he was resident in India or inherited from a person who was resident in India. "

  2. I found out that there is rupee account in my name since 1980 and some money in that account with IT clearance certificate. Can I repriate this money in $ ?

    You may designate the account into a NRO account and, if the income is a current income request the banker to remit the money.

I believe that while buying NSC, I can make the payment in US dollars through normal banking channels.

  1. Can you confirm this? If I can do this, can you tell me how the exchange rate will be determined?

    Yes, you may remit the money in foreign exchange through normal banking channels. The exchange rate is determined by bankers based on market position, and, as such, they will be able to clarify you on this.

  2. What is the procedure to repatriate the sales/maturity proceeds of my NSC? What documents do I have to present to prove my eligibility at the time of repatriation? Will the post office pay me in rupee or will it pay me in US Dollars? Again how the exchange rate will be determined at the time of repatriation?

    Once any investment is repatriable as per regulations, then the disinvestment proceeds can collected by your bankers. You may furnish the bankers documentary evidence to the effect that the proceeds are out of maturity sums of securities. These may include a photocopy of the original investment receipt, any letter or other document from Post office etc. The post office will not pay in dollars, but only in rupee. But, the bankers, after satisfying that the proceeds are out of maturity sums of repatriable investments, will allow repatriation. Determination of exchange rate is based on market commercial forces, left to bankers.

I would like to understand the repatriation of sale proceeds after selling property with an example. Let us say that current exchange rate is 50 rupees = 1 US Dollar (hypothetically) and I invest $ 20,000 (= Rs. 10,00000) today in immovable residential property. Let us say that 10 years down the line, I sell the property for Rs. 20,00000 (20 lakhs) and at that time let us say that the exchange rate is 1 US Dollar = 40 Rs. Based on the information in point (ii) above in RBI policy, how much money I will be able to repatriate in this example? Will it be equal to original dollar amount ($ 20,000) X 40 = 8,00,000 Rs. only or I can repatriate the whole amount of 20 lakhs?

As per law as in force today, only the foreign exchange brought into the country for acquisition of property could be repatriated. The rupee depreciation / appreciation is not taken into account. In the above example the repatriable foreign exchange is $ 20,000 only.

I recently terminated my Life Insurance policies in India and got two checks in Indian rupees. I do not have any bank account in India. Can I open an account with your bank here in USA and deposit these checks here in USA?

I am assuming that the LIC policies were invested by you, while you were a resident in India You may contact any banker in India for repatriation and they will do the needful. As long as the funds are repatriable, there should be no problem in bankers repatriating them. This option would be better than opening an account abroad and sending the cheque through clearance, as at some point banker would like to know the source of funds, which may involve delays.

I am an NRI and have been one since 1986. I will be selling my apartment (funded from overseas) in Rupees and wish to convert the sales proceeds in to US$ and repatriate overseas. Can you please advise the procedure for this? Also can I repatriate the funds from an NRO account, which I already have? Do I need to open an NRE account as well? Is there a US$ limit for repatriation?

If you had purchased the flat using foreign exchange, to the extent of foreign exchange used to acquire the property you can repatriate outside India. You may approach the banker, with proof of sale proceeds of the flat and they will do the remittance. Repatriation from NRO account depends is permitted up to $ 1 million by RBI recently on production of certain undertaking from the account holder, in respect of no liability to income tax. You may approach banker for the compliance procedures.

I was working in India and am now in USA. I have cash saved from my previous job in India. How can I bring this money to America in dollars legally?

The money is repatriable on your production of certain declaration for tax purposes. You may approach the bankers with specific request.

I am a NRI working in Germany. I would like to take housing loan in India to construct a house in Bangalore. If I take a loan and return back to India, I cannot pay the rest of the loan amount from outside the country. Could I repay the loan amount from an Indian savings account as well?

Loan repayment source is not regulated by Foreign exchange law. However, if you repay from out of Indian savings in rupees, then later, if you desire to sell and repatriate, you may do so only to the extent the loan is repaid out of foreign exchange.

Once I become an NRI, do I have to close my bank account in India (which I had when I was in India). Do I have to convert it to a NRO account, or can I retain the account and the rupee funds. What are the legal/tax implications?

As per foreign exchange regulations, once you become NRI, you shall re-designate your account into NRO account. If you retain the account in rupee account itself, the banker may not be aware that you have since become a non-resident, which is a factual error. The moneys lying in such account will not be allowed to be repatriated out of India.

I am a NRI residing in USA. The question I have is:
How do I repatriate funds back to US which originates from sale of investments in Indian Mutual Funds, shares and real estate assuming that I have paid income taxes on these gains in India?

You may approach the bankers with the specific requests for repatriation, and they will allow repatriation as per regulation. The sale proceeds of mutual funds / shares are repatriable. However, real estate sale proceeds is allowed only if the original acquisition of property is as per regulations, in foreign exchange.

I am and NRI and am keen on investing in mutual funds. I do not have a PAN number though. Please advise on the procedure to be eligible for such an investment?

You are eligible for investment in mutual funds. I do not think that the investee mutual fund would insist on PAN number from a non-resident.

I am a PIO planning to move back to India with family.(husband and wife with 2 minor children).

  1. Is there any restrictions on transfering money to India?

    No. You can transfer moneys to India through normal banking channels.

  2. Which is our best option to keep money in - FCNR or NRE account.(at this time of poor dollar performance)?

    Once you become a resident you cannot open these accounts (FCNR / NRE) which are to opened by non-residents only. However, you may open regular bank accounts or make investments, which optimises your return. This way you really do not lose anything.

  3. Are we allowed work in India?

    Yes, as a NRI / PIO you can work in India.

You indicated that RBI has given there is general permission available for NRI to purchase and sale of shares subject to certain conditions.

  1. Will it possible to send the various conditions or link where I will able to see the conditions.

    If the shares are purchased by NRI on repatriation basis, the conditions are: (a) NRI should designate a branch of authorised dealer for outing his transactions relating to purchase and sale of shares (b) NRI should not purchase (both on repatriation and non-repatriation basis) in excess of 5% of paid up value of shares issued by the Company concerned or 5 per cent of each series (both on repatriation and non-repatriation basis) (c) NRI should take delivery of shares purchased (d) payment for purchase of shares is made by inward remittance in foreign exchange through normal banking channels or out of funds held in NRE / FCNR account maintained in India.

    If the shares are purchased by NRI on non-repatriation basis, the conditions are: (a) the Company whose shares are proposed to be purchased should not be in Chit Fund or a Nidhi business or engaged in agricultural / plantation / activities or real estate business or construction of farm houses or dealing in Transfer of Development Rights (This is basically a Certificate issued in respect of category of land acquired for public purpose either by Central or State Government in consideration of surrender of land by the owner without monetary compensation, which are transferable in part or whole (b) the payment, could be through inward remittance through normal banking channel or out of funds held in NRE / FCNR / NRO account.

  2. FII's/NRI can invest in a company subject to some limits. When shares are transferred in my NRI non-repatriable account, it is only that time the company comes to know that an NRI has invested in the shares. Is there any other way I should inform by intention of investment?

    In law, a NRI should not suppress the status. It advisable to inform the true status or identity of the investor.

I am an NRI. Circular No. 67, dated January 13, 2003, talks about repatriation of funds up to USD 30,000 per academic year for educational purposes. I have the following questions:

  1. Is repatriation allowed for college as well as school expenses? My children are not in college yet, but they are going to a private school, which has substantial fees.

    The circular states " education " as a purpose. It does not restrict it only to college education. Therefore, you may remit for any educational purposes including for schools.

  2. Which forms are required to be submitted to the authorized dealer (Citibank) for this purpose?

    No particular form is prescribed in the circular itself. You may write to Banker with documentation they ask for.

  3. Which types of expenses, besides tuition, are allowed to be submitted?

    The nature or type of expenses (as long as it is educational ) is not prescribed in the circular. Expenses for educational purposes are permissible remittance.

    Incidentally, the remittance under Circular 67 you have referred above, no longer prescribes the "purpose" nor the monetary ceiling limit is restricted to US $ 30,000. You may remit, regardless of purpose, up to US Dollar one million in terms of amendment (relaxation ) made under Circular 67 of January 13, 2003.

As a NRI and willing to come back to India, is it wise to convert Dollars into Rupees as dollar is getting depreciated sharply against rupee. Please advise.

'Exchange rate' determination is very complex. Investments are shifted to home country, only on the basis of long-term requirements and not on the basis of current exchange rate. Legally, you are allowed to convert them and bring in Rupees or you may also hold them in foreign currency. Contact your bankers for procedures.

Regarding the repatriation of the sale proceeds of the inherited assets; I deposited the sale proceeds in the NRO account. This amount matches what CA wrote in the 'Certificate By A Chartered Account' and the "Undertaking" forms for repatriation. Do I have to repatriate the entire sale proceeds written on the CA forms? Can I use a portion of the sale proceeds deposited for expenses while I am in India, and repatriate the rest later? Will Citibank and RBI have a problem with this?

RBI regulations allow only the maximum "eligible" monetary ceiling limit that can be repatriated outside India. The regulations of RBI or the banker cannot compel that the entire sale proceeds of inherited asset should be necessarily repatriated outside India. Thus, if you desire to leave a portion in the account, you may do so at your will.

What exchange rate would I get if I deposit in Swedish currency in NRE account and withdraw the amount in INR?

Exchange rates are left to market forces. You may contact your banker on this.

Can the interest earned on a NRO fixed deposit (ordinary rupee deposit) be subject to Indian Income Tax? If so, at what percentage rate?

Interest earned on NRO fixed deposit is taxable in India at the applicable slab rate for individuals. Only the interest on NRE Account is exempt from tax.

I have received my share of the estate of my late father. Money has been deposited in a NRO account. How can I transfer these moneys to an NRE Account, to facilitate investment in NRE scheme?

The rules regarding NRO / NRE account does not directly provide for transfer of funds from NRO to NRE account. (ii) But, you can always repatriate the moneys (being sale proceeds or inheritance) from NRO account to your account abroad, and re-invest them through normal banking channel into your NRE account. So, the options are two:- One, in view of the repatriability stated in (ii) above, you may request the banker whether it can directly transfer funds from NRO to NRE account. Second, if such transfer is not done, you may take back the moneys and remit to India again through normal banking channel. The only loss here could be commission on transfer and about a week's time.

What are the current RBI regulations to transfer Indian Rupees into US Dollars? What is the maximum amount that can be transfered from the proceeds of the Real Estate sale into US Dollars?

The query is too general. Repatriation of all current account transactions (such as interest, dividend, rent etc.) is freely permissible with bankers. In so far as capital account transactions are concerned (such as real estate, deposits etc.) there are specific rules, although they are increasingly getting liberalised these days.

Normally, the maximum amount that can be repatriated outside India on real estate is the amount of foreign exchange brought into India to acquire the property, the sale proceeds of which you intend to repatriate. However, repatriation limits are liberal, if the property is acquired through legacy.

I am living in Dubai for past 7 years and have a NRE account. Recently I purchased a 1 bedroom flat in India with the funds from my NRE account (I paid with Demand Drafts drawn from my NRE a/c). I do not have a PAN number , as I am not paying any taxes in India. I do not have any plans to go back to India in the immediate future.I also took a chit from a company in India for a amount of 5 lakhs; every month I send money to fathers a/c out of which he pays monies due for that chit. Is this arrangement okay? In case I have to repatriate the final chit amount, will I be asked the source of investment for this chit or should I pay them through a check or D.D out of my NRE a/c ? I am also planning to take a Post office savings certificate (Monthly Income scheme) for 2 lakhs, for which I plan to send the money from here to my fathers a/c. Should I pay the money through a NRE a/c ? Will investing in any of these schemes have any tax implications or will I have to file any tax returns? Can I legally repatriate the maturity amount ? I'm planning to give a second-hand car to my father who is retired and getting his pension. Is it better to have the car registered in his name or my name? Will owning a flat or car require me to file tax returns? Also, if I invest in any mutual funds in India or buy shares through ICICI direct.com, need I to open a PAN account and regularly file for returns ?

    Chit fund payment:

    There is specific permission available to NRIs to invest in Chit fund schemes. Accordingly, no repatriation will be allowed on an investment not permitted. Yes, certainly source of investment will be relevant for law, both foreign exchange and income tax. You cannot pay the Chit investment through NRE account as investment is not allowed in Chit Schemes.

    POMIS investment:

    There is specific permission available to NRIs to invest in Chit fund schemes. Accordingly, no repatriation will be allowed on an investment not permitted. Yes, certainly source of investment will be relevant for law, both foreign exchange and income tax. You cannot pay the Chit investment through NRE account as investment is not allowed in Chit Schemes.

    Name change of car:

    Since you are going to be away abroad, registration of car in your name is not correct.

    Taxation-related issues:

    Income from post office certificates is taxable , subject to threshold limits etc.If the property is let out income is taxable. Ownership of house of a given size or motorcar requires filing of tax return only if the owner resides in a specified territory in India. As a resident outside, you need not file return on this score.

What are the RBI regulations that I need to know to set up a branch office in India?

RBI prior permission should be obtained for opening Branch office in India.

What is the procedure for transferring money from India to Bahrain. The person transferring is a resident Indian. What is the safest way to accomplish this?

Resident can transfer money abroad, for education, medical benefit or as gift non-resident relatives. Transfer of foreign exchange can be done only for permissible purposes.

I am currently in the U.S., and I would like to purchase stocks of Indian companies. How can i do it?

You may operate through a registered Broker through recognised Stock Exchange in India. The rest of the procedures are known to Brokers.

What is meant by legitimate deposits? Can any person in India deposit money in my NRO account, say flat deposit/rent without registered agreement. What are the regulations for NRO deposits?

The expression 'legitimacy' of funds credited is used with reference to bona fide dues of account holder. The deposit by a person resident by itself should not be a problem, as long as the funds belong to the non-resident account holder. If there are no supporting document, the banker may ask for proof of source of funds.

The NRO account is opened and held by a non-resident only. Both 'credits' and 'debits' of the account are only as permitted by the regulations in this regard. For details / procedures of opening, the eligible credits / debits you may contact bankers.

I have inherited residential property from my father as per his will after his death. Can I sell the property after legally transferring it on my name and send the proceeds to my account in the USA? At present, I am an NRI.

Yes. In terms of circular 19 of September 12, 2002, an amount not exceeding US $ 100,000 per calendar year, can be remitted out of assets in India acquired by way of inheritance.

Myself & my family are Australian Citizens with Indian origin. If we decide to come back to India permenantly as a PIO (Person of indian Origin) status & retain the Australian citizenship status, Is it possible for us to bring Foreign currency (more than the allowed limit) into India. If we declare the amount of currency that we bring, what will be our position. Is there any tax / duty payable to bring foreign currency which is more than the amount allocated by the Indian Govt? Also, are we allowed to bring all our household items, which we have used here, as a Transfer of Resident? Is there any duty for that?

There is no ceiling limit for bringing income / moneys earned abroad into India. Therefore, you can bring through normal banking channel, by proper declaration, the funds that you desire to remit into India. Personal assets are normally given exemption. You may check these specifically with Customs baggage Rules.

I have Rupee Checking Account with Citibank. Now I am returning back to India for good. Can I retain my NRE account for sometime after my return? If so, for how long? I wish to retain my NRE account for enabling transfer of some payment that will be due from my S'pore employer.

Immediately on return to India for good, you have to re-designate the account into a resident account. It will also be factually incorrect, to continue to disclose the legal status as 'non-resident' when you are a resident here. However, you can still get the foreign exchange remitted into India from your employer at Singapore through normal banking channel to your account itself.

I became an NRI in FY 03. However I did not know about NRI account etc and so I kept my Indian rupee account running. I have remitted money from overseas into this account and have used these funds to invest in the Indian secondary equity markets and also in some deposits with companies. I now realised that I should be holding an NRE / NRO account. If I convert my existing Indian Re account into an NRE / NRO account then will I be able to repatriate the funds that I had brought into India earlier?

As per deposit regulations, immediately on your becoming non-resident on leaving India, you should have designated your then existing account as Non-Resident (Ordinary) account. Now, you can take steps to immediately designate your account into an NRO account, duly intimating bankers in this regard. Also, inform bankers the date from which you had become non-resident, with documentary proof.  Repatriation of investment, (if allowed by the relevant regulations concerning such investment) should not be a problem, if the status as non-resident on the date of investment is proved and the investment is made in accordance with the relevant regulations.

I am an NRI residing in USA. I want to invest in Indian stock market. Can you please let me know what is the best way of doing so from USA? I don’t have a demat a/c. Can I get an account opened? Can I buy a Life insurance savings linked policy for myself from an Indian company such as LIC in USA?

You are permitted to invest in stock market through any registered broker of recognised Stock Exchange. You may contact any of the registered broker. The broker will guide you with other procedures, including Demat account or physical holding and / or delivery / payment for stocks. There is no specific permission available for investment in insurance polices in the regulation itself.  It is understandable that such policies are given by insures where the insured resides.

What are the current Indian rules regarding repatriation of dollar investments in India.  I would like to invest in business ventures bank home. Before I do that I want to know if I can bring back the principal and profits to the US at some future date.

Repatriation depends on nature of investment, although generally all foreign investments are repatriable. Normally, if your business investment takes places in foreign exchange brought into India, through normal banking channel, subject to Regulations in this regard, then such investments are repatriable. Profits or dividends being current account transactions are repatriable through bankers. Once specific business and the transaction is known, a clear legal answer could be given.

I wish to give my brother in India a loan to develop his property. Can I get the remittance back to the US after 3 years without much hassles? What are the rules and through what sort of an account should I give him the money?

In terms of Circular 24 of September 27, 2003, you can give loan to your brother, for a sum not exceeding US $ 2,50,000 for a maturity period not less than one year, free of interest. The amount of loan is received by way of inward remittances in foreign exchange through normal banking channels or by debit to NRE / FCNR account of lender. You may contact banker for procedures.

I have NRE and NRO accounts in SBI and Citibank (India). I am planning to take US citizenship. What will happen and what should I do with these accounts?

You are already a non-resident. Now, after US citizenship, you will be a Person of Indian Origin, but continue to be 'non-resident' by status. Just inform bankers of the new development.

I have an NRE account; I am in UK for the past 8 months and I have a salary a/c here. Now can I transfer the money into my Indian account from my UK salary account? I have applied for my PAN recently but not got the card. Can you tell me if we need a PAN card when we deposit money more than a specified sum in rupee terms?

You may transfer moneys through normal banking channel to your NRE account in India. For procedures you may contact bankers. No PAN card is required to deposit tax. But the No.can be obtained within a few days so that the same can quoted on the challan. This will help you to get the tax properly credited to your a/c; even otherwise a copy of the challan will help you get the tax credit.

Can we gift money (USD) from India to relatives in the US for Educational purposes? If so what are the rules and regulations governing the same? What is the maximum amount I can send from India to a relative in the US either as gifts or Educational purpose?

In terms of Circular No. 3 of July 17, 2003, you can remit upto US $ 100,000 for educational purposes. The bankers shall permit remittances only on the basis of self-declaration basis of remitter. Gift remittance is given general permission up to US $ 5,000 per year. You may approach banker for the rest of the procedure.

When I was in India (prior to NRI status) I invested in various tax saving schemes like LIC / PPF etc from the salary I earned in India.

  1. Can I continue to maintain such accounts till I wish to close them at maturity?

    Your continued contribution to these accounts are governed by the rules regarding these investments. However, from the foreign exchange law point of view, as a non-resident, you cannot repatriate these proceeds out of India, on maturity. Once these investments are paid after maturity, you may have to deposit the proceeds into bank account in India.

  2. Can I continue my savings bank accounts in India? Or Should I close or convert them (to NRO)? I need to maintain a bank account to deposit interest warrant, maturity proceeds etc received from companies I have invested.

    Yes, you can continue to maintain your savings account. You may contact your banker to re-designate the savings account in NRO account, because, factually you are now a non-resident.

As per the RBI revise guidelines of January 2003:

  1. Is gift received by a NRI in India in INR allowed to be deposited in NRO account of NRI and available for repatriation to NRI?

    Depositing legitimate dues to NRI (which includes gift) into NRO account is permissible. However, from out of NRO account repatriation abroad is permissible only as per regulations in this regard. The January 2003 circular only permits repatriation for medical / educational / assets in India and the ceiling limits is uniformly enhanced to US $ 1 million. In so far as gift received by an NRI (donor being a resident) is concerned, the donor himself is permitted to gift $ 5,000 per annum through normal banking channel.

  2. Does bonafide need for which balance in NRO account can be repatriated also include need of NRI of buying a house for self living or for use as business capital?

    'Bonafide" are not tested for repatriation. Repatriation is permissible from out of NRO account, to the extent and for the purpose specifically permitted.

  3. Are the bonafide needs for which the limit has been enhanced to 1 million USD notified somewhere and can I have a copy or reference number of that document.

    You may refer A.P. (DIR Series) Circular 67 dated January 13, 2003 and approach bankers for necessary remittances covered by the circular.

What happens to the NRE accounts when NRI decides to take nationality of other country? What rules are applicable to people of Indian origin who decide to reside in India? Are these rules different for dual citizens?

Non-resident Indians (which includes Person of Indian origin) can maintain NRE account. Thus, once the non-resident becomes person of Indian origin, he can continue to maintain that account, and intimate banker change in status.

Person of Indian origin is relevant, as long as they reside outside India and are 'non-residents' for law purposes. Once they permanently reside in India there status, in law, changes to resident. All the rules applicable for residents are also applicable to such persons.

I read that after returning to India, NRIs can maintain overseas accounts but cannot open new accounts overseas. Is the law applicable to PIOs too when they permanently reside in India?

Yes. PIO is also a 'resident' by status, and, as such, the regulation relating to opening / maintaining of Foreign Currency A/c by residents is applicable to PIOs, too.

I am a PIO and live in the US.  I will be transferring back to India for a few years only. I will need to purchase an apartment there for residence.  When I return back to the US (in maybe 4 years), can I sell the apartment and repatriate back the money? Also, while I am there, I will invest my liquid cash in the stock market.  Can I repatriate back all the money from the stock market?

Investment by PIO a residential apartment, by moneys sent through normal banking channels is permissible. You can also repatriate the sale proceeds later.

Your investment in stock market will be as a resident, as your status will change while you are in India. After your return to US, you are permitted [under section 6 (5) of Foreign Exchange Management Act] to hold, own, transfer assets acquired by you while you were a resident in India. This way, you are permitted to transfer such shares too.

Can a NRI repatriate rental income earned in India? Does a tax return need to be filed in India?

Yes. Rental income - being current income - is freely repatriable by NRI. Filing of tax return is dependent on the income earned in India being in excess of the threshold amount that is exempt from tax. Remittance of the money is subject to exchange control regulation. Both are independent.

I am a non-resident Indian interested in investing some of my USD earnings into Indian financial markets - mutual funds, corporate debentures, and equity. How can make this investment such that the funds remain fully repatriable? What is the tax applicable on such investments?

In terms of Schedule 3 of the FEMA Notification 20 / 2000 you are given general permission to purchase / sell debentures, equity, etc. They are repatriable. You shall contact a registered broker of a recognised Stock Exchange for procedures.

Is it possible for a US company owned by NRI (US citizen) to participate in a real estate development joint venture in Mumbai and up to what percentage of investment is allowed?  If possible, please provide regulations detail on this subject.

If the US Company is owned to the extent of 60% or more by NRIs / PIOs (Person of Indian Origin) then it becomes an OCB (Overseas Corporate Body). OCBs are banned from investing in India. However, non-OCBs / NRIs can invest in Real Estate Development up to 100%. The relevant regulation is Item #2 of Annexure B of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000.

 I am a NRI in Canada. I want to loan some money to a business entity in India on which I will get monthly interest.What type of account should I open, in India, so that I can repatriate this interest?

First, the loan proposal by you will be a External Commercial Borrowings (ECB) to the Indian Company. If only the loan proposal is subject to and in compliance with the regulations of ECB, the interest is repatriable. Normally, ECB from unrecognised sources or individuals (unless the lender is a relative to borrower or collaborator in borrowing company) are not permitted. Kindly check the feasibility of ECB.

I was working with a Bank in India and subsequently resigned.  On resignation, I received Provident fund and Gratuity, which is non-taxable in India and still lying in one of my accounts there.  I wish to bring that money to  USA - what should I do? Can I deposit that money in my one of the NRE accounts with Citibank in India and repatriate that?

It would be appropriate in the circumstances stated to open NRO account with your bank. NRO account can be opened in any form such as, current, savings, Recurring deposit or Term deposit account. So, your existing account can be changed to NRO account. Remittances from our of NRO account is greatly liberalised recently.

Two months ago, I purchased land but for various reasons, I want to sell the land and convert back to dollars. I would like to know about repatriation after the sale has been concluded. The buyer might issue a rupee cheque, which I would like to convert to dollars.

If you had bought the Land (other than agricultural / plantation / farm lands) using foreign exchange, then to the extent of foreign exchange used to acquire the property, will be considered by the Bankers for repatriation. You must be able to give the bankers sufficient proof for having acquired the land using foreign exchange, reasons for quick sale, and the extent of foreign exchange used to acquire the Land for considering repatriation as per regulations in force.

I am a NRI for the past 18 years. I had purchased a flat in Hyderabad from my NRI account in 1995 in my and 2 of my sons names. We are selling the property now. Can I repatriate the money if so how much? Please let me know the Capital gains tax rules as well. I had purchased it for about 5 lakhs and now it maybe sold for 20 lakhs.

Repatriation is permissible. Long-term capital gains will apply and indexation benefit will be available.

I am a CA working in Dubai. Can a personal loan be taken by a NRI from a bank in India? Is there a restriction to this effect from RBI under FEMA? Where will the disbursed amt be credited? NRE or NRO A/c? Can the loan be taken when the co-applicant is a resident and the amt is credited to his local savings/current A/c?

Bankers in India is permitted to grant loan to non-resident Indian, against the security of shares / securities / immovable property. Two aspects are noteworthy: (a) the loan shall be subject to directions issued by RBI from time to time and (b) the loan shall not be utilised, either singly or jointly with other person, investment in Chit fund business, Nidhi Company, agricultural, plantation activities or real estate business etc.

Is money in NRO account repatriable now? Is there a limit up to which money in NRO account can be repatriated? What is the procedure for this repatriation?

Repatriation from out of NRO account is made very liberal these days. Remittance for education, medical and sale proceeds of house property held for 10 years have been permitted up to US $ One million per year. You may contact your bankers for remitting procedure / documentation.

As an NRI from Kenya, am I eligible to invest in the stock market? What are the tax implications?

It is permissible for NRIs to invest in recognised stock markets through registered brokers. You may contact any registered broker, who will be able to clarify other procedures for effecting transaction. As per the proposal in the recent Union Budget, long-term capital gains (shares held for minimum 12months) would be exempt from tax and short-term gains would be taxed at 10%. Dividends earned on shares are not taxed in the hands of the recipient.

I wish to repatriate funds from my Citibank NRO savings account for 'education purpose' as permitted by the RBI. Source of the funds is savings. I also plan to repatriate the sale proceeds from the inherited property in the future from the same NRO account. How long should I expect for the requests to be completed?

It is permissible to repatriate for education purposes. It is also permissible to repatriate the sale proceeds from the inherited property on production of proper documentary proof for such property and sale proceeds of it. The time taken to put through the transaction would vary from bank to bank.

Residential property owned by an NRI sold in India. The property was built with income in Rupees in India, without foreign currency investment. Hold British Passport now (Born in India). Money urgently needed for medical treatment. Would you please advise the RBI regulations/procedure?

The property sale proceeds can only be repatriated up to the foreign exchange brought to build the property. You may take the proof of investment to your bankers and request for repatriation to the extent of foreign exchange investment.

I would like to invest in Indian Mutual Funds (e.g., Birla Mutual Fund or Prudential ICICI Mutual funds). How can I do that? Will it be repatriable?

Yes. Non-resident Indians are permitted to invest on repatriation basis in units of domestic mutual funds.

As an NRI, can we invest in property in India that is zoned as agricultural/farming? Can we get loan/mortgage for this investment and what if the investment is for residential / commercial property?

Investment by NRIs is prohibited in agricultural / farm properties. Investment in residential / commercial property is permitted. Bankers in India are permitted to extend loan facilities to NRIs for properties in India.

I am an NRI having moved to NZ over 2.5 years ago. I currently have rental and other interest income in India and have been filing my IT returns annually as per normal. I have recently opened an NRO account in Bombay and have started depositing the proceeds from my rental income in that account. My questions are:

  1. As the NRO account has been recently opened, can my prior income, which was deposited in my resident bank account, be sent to me in NZ? This is approx 5 lakhs. What happens to my PPF account where the amount is in excess of 10 lakhs? Can this be remitted on maturity of the account in 3 years time? Will there be any TDS on this?

    Remittance rules are considerably liberalised and the authorised dealer (bank) can guide you. In our opinion the entire amount in your account can be repatriated. No tax will arise on the same on repatriation.

  2. Where there is a sale of any investment held in India by me or maturity as PPF above, where should the proceeds be banked? NRO account or regular resident account? Will this remittance (excluding interest) be taxed if sent to me?

    Once your status is a NRI all the accounts will be classified as NRO only, if the deposits are Indian rupees.

  3. I have been trying to remit back funds to me in NZ from my NRO account but have been told by my bankers that the withholding tax of 30% applies even to the principal amount in the account. I understand that this applies only to the interest earned. Is there a circular reference that i can quote or get a copy of the IT web site to make my bankers understand that the entire remittance to me does not attract a withholding tax of 30% but only on interest earned?

    No tax should arise on remittance. Tax arises on income when it is earned or received. You may engage a professional to deal with the bank and suitably explain the legal position.

  4. Can my fathers HUF remit funds to me for maintenance etc? If so, how much annually?

    Remittance for maintenance is possible. The AD can process this. This should be possible up to USD 25,000. However, the exact position can be verified with the AD.

How can i send money to India from Montserrat (West Indies)?

You may remit money into India from any country abroad through normal banking channels. Contact your bankers for such remittance into India.

Can NRI's participate in equity markets in India - either for shares or mutual funds?

Yes. NRIs can invest in Shares through registered Share brokers in recognised Stock Markets. Investment in Mutual Fund is also permitted.

I am an NRI living in the USA. I have a question regarding the repatriation of sale proceeds from the inherited property as permitted by the RBI. Can I appoint a power of attorney to sell the property on my behalf in India or do I need to be present there to carry out the sale proceedings?

Power of Attorney is Okay. There is no mandatory need to be physically present. However, the Power of Attorney need to be prepared, identified and attested as per Stamping procedure in US and once again stamped in accordance with Stamp Act of the State in India, before the Sale Deed itself is registered. You may contact your property lawyer for needful.

I have been in US for 4-5 years now. I am planning to return to India in 3-4 months. I have about 10,000 USD, which I got as loans from Citibank and Chase Bank. The loans are due for payment in October 2005.

  1. Can I continue to pay their monthly instalment from India?

    Yes, but only with the permission from RBI, as this is a capital Account transaction.

  2. Will the payment be routed through their own branches here in India?

    Yes.

  3. Can I pay the loans in full from India when they mature in October 2005?

    Yes, if permission is obtained from RBI.

  4. At the time of payment to them, will my Indian currency be converted to USD and if so, will I have to pay fees for that?

    There may be commission that you may have to pay to bankers. However, it would be advisable to make suitable provision for loan repayment abroad itself.

I had submitted paper work to the Citibank regarding the repatriation of sale proceeds from the inherited property as permitted by the RBI. I also submitted a copy of the "general power of attorney" which I had granted to my brother-in-law so that he could carry out the sale on my behalf. The general power of attorney was notarized in the USA, and was registered in India.

Citibank's customer service told me that all the documents were proper except for the "general power of attorney". I was also told that Citibank was researching whether the "general power of attorney" in this case met the requirements for repatriation. That's all I was told. The "general power of attorney" had a paragraph where I had allowed sale to be carried out on my behalf by my brother-in-law.

Can you tell me what Citibank is concerned about? Do RBI rules particularly address the issue of "general power of attorney" in regards to the repatriation of sale proceeds from the inherited property?

There is nothing in exchange control as such regarding 'General' versus 'specific' power of Attorney. If the sale itself was completed with the power of attorney (I assume that the Registrar's office recording sale transaction had accepted the power of attorney) then repatriation should not be a problem, as, from your own place you can write to them regarding repatriation of money, as long as the Bank is satisfied about the proof for inheritance of property. Please talk to them and find out where exactly lies the issue so that we can sort it out.

My African friend wants to transfer his bank deposit money to my account to do business. The African bank asks for CERTIFICATE OF LEGALITY. What's the certificate of legality? Where I can get that?

In order to do business, a Person resident outside India (your African friend) should follow the regulations regarding Foreign Direct Investment Scheme under Foreign Exchange Management Act. He cannot transfer moneys to individual and do business. You may also later be questioned by income tax department as to source of such money, and, if you state it is from your friend abroad, then they may insist on RBI acknowledgement or approval for the same. Therefore, it is advised that you ask your friend to comply with the relevant regulations for foreign investment, before remitting moneys. Given this legal position, it may not be necessary to comply with any certificate insisted by the remitting bank abroad.

I am a NRI living in US from last 5 years. I am planning to start an import export business, mainly exporting goods to India. My question is, after exporting or selling the goods in India what are the procedures to convert the rupees into dollar amount? Do I need any approval from RBI or do I need to file any form with them?

The proposed business in India shall be in conformity with the Foreign Direct Investment Policy of the Government of India and the relevant regulations under FEMA. I assume that this is complied with. Repatriation of profits from out of business in India, depends on the constitution of the Indian business (that is Private limited Company or public limited company). The law presently freely allows repatriation of dividends / profits, subject to complying with minimum procedures. If specific details are known the matter can be further advised.

When NRI acquires property in India, do they need to report to RBI IPC6 form? If so when and how?

Under the present dispensation, there is no requirement of reporting to RBI at al.

I am living in the USA from Jan 2001 (NRI status) as a permanent resident of the USA. Before coming over here, I purchased 2 apartments One in Chennai in the year 1990 and another in Mumbai in the year 1998. Both properties were purchased out of income generated in India.

Now I would like to sell these apartments and repatriate the proceeds to USA where I have need for the funds. Given the real estate crash in India, I am informed that the sale price now will be lower than my purchase price or at best with no gains after indexing.

What RBI restrictions, if any, will apply to this transaction? Alternately, I would like to make these investments productive by renting them out. If I do, can I repatriate the rental income to USA on a regular basis?

Repatriation of sale proceeds of immovable property acquired out of Rupee resources is permitted (from out of NRO Account) subject to the condition that the property should have been held for a minimum period of 10 years. On this account your Chennai property sale proceeds is eligible for repatriation. For Mumbai property remittance can be made, if the sale proceeds is held by you for the balance period (10 years -no. of yr. the property is acquired) in NRO Account (savings / Term Deposits).

Repatriation of rentals is a Current Account Transaction, and, as such permitted freely.

I am a Resident Indian holding a property in London with due permission of RBI under VDIS since 1997 and have been repatriating the rental proceeds to India through proper banking channels till recently. Last month a part of my property was sold and the sale proceeds amounting to about UK Pound Sterling 40,000 has been deposited in my account in London apart from the rental income that I have been receiving for the past one year or so. Do I have to repatriate the sale proceeds and the rental income that I have in my account in London or can I retain it in London in light of the recent notification of RBI allowing resident Indians to acquire and hold immovable properties abroad. Further can I gift this amount to my son and transfer this money to his account in Dubai? He is a resident Indian and would like to purchase a property in his name in Dubai.

The answer depends of Terms, if any of RBI Approval. Gift is a separate transaction allowed up to $ 5,000 per calendar year per person.

I am a doctor in Veterinary medicine. My wife is in the same field. We are in our 50s and are both US Citizens. Can we buy property with our status now or do we need dual citizenship to buy property in India?

I am assuming your status is Person of Indian Origin. That is, though presently you both are US Citizens, you were earlier Indian Citizens. Yes, you can buy property and there is no need to be Indian Citizens to buy property in India.

Can a person of Foreign Origin buy a property in India as he is from West Africa & wants to settle in India? Can I ask him to send the money & buy property on his behalf? Is there any restriction from the RBI?

A foreign national is prohibited from buying property in India. I assume 'foreign origin' equivalent to foreign national who did not at any point of time had Indian Citizenship.

My wife is a US citizen. Her father had opened NRI bank A/c on her name in India in Rs where he had deposited money as a gift. The question I have is that can this money be transferred to USA in dollars?

I assume that your wife has NRO Account. Your father opening in somebody's name is not very relevant legally. As of now the account is an NRO account, the Account-holder being your wife. Repatriation from out of NRO account is made simple and, you may approach your banker for that. Incidentally, gift remittance from India can be made up to $ 5,000 per annum.

I live and work in the US. I am buying a property in Bangalore that is currently under construction. I will be given the keys to the apt in about a year. I want to be able to repatriate the funds. My questions are:

1) Would I be able to do it if I pay in US dollars with US checks not an NRI account?

Yes. You may remit foreign exchange through normal banking channels. For details contact your bankers.

2) If yes, how can I prove this to the RBI? The RBI keeps asking about a letter from the declarant's bank in India?

The proof will be verified by the banker through which you seek repatriation later.

3) If I want to repatriate funds later (3 years) and the rent earned, do I need to let the RBI know about the purchase of my property?

No. There is requirement to inform RBI. The same will be checked at the time of repatriation.

4) When do I need to fill out the IPI7 form?

The present regulation itself does not state about the above-referred form.

5) Are there any other details I need to take care of so that I can repatriate the amount that I am currently paying in dollars and the rent subsequently?

All that you need to do is to acquire the immovable property using foreign exchange remitted through normal banking channel or by debit to your NRE Account. Rent is freely repatriable. Repatriation of house property is permissible, up to foreign exchange used to acquire the said property.

I am working in Software Company in New Delhi as a Software Engineer. I have never been to UK and born and brought up here in India. I am remitting funds in USD from my Late Uncle's Account, which is in UK to India in my CITIBANK Account. I have already procured all the Legal Documents from the Trustee that I will be holding the money after my Uncle's Death. He died in 2003 and after that I am the only Beneficiary left. The Documents has already been procured from the Federal High Court in London from the Barrister assigned by the Trustee on my Behalf so that I should not face any Legal problems both in UK and India. My only question is that what are the formalities required here in India to receive the Amount in my Citibank Account and is there any possibilities of any Legal issues from RBI in future which would create any kind of problem for me in terms me inheriting the money from a foreign citizen? As I have got all the documents ready with me and only waiting for the money to be Transfer here to India from UK.

You may go ahead and receive the money. It is legal and there are documents (including Court's order) to prove it. Receive the same and obtain the Foreign Inward Remittance Certificate (FIRC) from your banker, stating the purpose clearly and disclose the same in your income tax return. Preserve all the documents. There will not be any problem at all.

Is it possible to buy real estate in India for a US registered LLC owned by NRI family members?

No. US registered LLC owned by NRI family is an OCB. OCBs are banned as a investor class.

What is the seriousness and the penalty for non conversion of resident accounts and if it is usually a problem since most NRIs are not even aware of the issue?

The Foreign Exchange Management Act (unlike the old law FERA) is a civil law and, as such there is no serious penal consequences, particularly when no money from the Bank account of a non-resident is repatriated to foreign countries. However, NRIs are supposed to inform bankers about their change of status and accordingly re-designate their Resident account into any of non-resident accounts.

We are Indian Pvt Ltd Co. with Authorised Capital of Rs 1 Lakh and are in readymade garments retail trade. We have an offer from a Foreign National interested in investing an amount of USD 3 Lakh in our showroom in India, which will be returnable with interest after 3-5 years. What RBI permissions are required? Is ECB allowed from individual or from corporate body of which the foreign national is director? Can we accept this amount without increasing our own capital in the company? Since we are in retail trade is FIBP approval required?

As per the existing ECB Policy loan from unrecognized sources are not permitted. Only internationally recognized sources can lend money. This prohibition is not applicable if the lending is done by Shareholder or foreign collaborator (that is even though the foreign shareholder / collaborator is an unrecognized source). However, given the additional facts, it appears that you are in "Retail Trade" where foreign investment is prohibited as of now. ECB is also not allowed from a corporate body since they are not recognized source and cannot become your collaborator or shareholder by virtue of ban in FDI Policy.

I am a NRI, and I have a NRE account in an Indian bank. I am planning to tender my India employee stock options (these are Indian equity shares now) for conversion into American Depository Receipts, and benefit from the premium attached with the ADR compared with the stock price in the Indian market. My question is this: can I deposit the rupee proceeds from this transaction into my NRE account?

It is permissible to deposit into the credit of NRE Account any proceeds covered by the general or special permission from RBI. However, It is advisable that you open an NRO account and deposit the rupee proceeds from the Transaction, since repatriation from out of this Account is easier and made progressively liberal.

What does the following mean? I am a US green card holder and an Indian citizen. I would like to see if I could really relocate back to India. However, in the next two years, I would like to evaluate that. Is the fact that I intend to maintain my green-card - file taxes in US, maintain bank accountings, filed for a re-entry permit etc, a valid *intent* to say that this is a temporary visit? Any bearings on the tax obligations? Basically, how does this clause relate to the 182 days requirement or the RNOR requirements?

There are two connected issues. (i) about FEMA and (ii) about Income Tax. The FEMA part is answered here.

If you come to India either for (i) Employment (ii) doing Business here (iii) Other circumstances indicating stay in India for uncertain period you are a Resident for the purposes of FEMA. From your facts, it seems you are exploring possibilities to relocate to India for good. As and when you do so, you will be a Resident for the purposes of FEMA.

The enclosed note under FEMA states that as long as you visit India for a temporary period you are not a Resident and continue to be a non-resident in India.

Status on a temporary visit

Under FEMA, intention of stay is relevant. Accordingly, it could be opined that if the intention is for a temporary visit / stay, the person would continue to be a non-resident. Section 2(v) of Foreign Exchange Management Act, 1999 (`FEMA').

My mother passed away recently, she had her share of family property - a farmhouse on one acre of land with coconut trees in Kerala. The legal heirs are my two brothers and myself; it has not been transferred to our names yet. I am a US citizen, PIO cardholder, is it legal for me to inherit this property?

In terms of Section 6 (5) of the Foreign Exchange Management Act, 1999, it is perfectly legal for you to inherit the property in your name.

I am in process of opening and NRE account with Citibank. I would like to know whether the "mandatee" (my father) in India can deposit money to my NRE account if the deposit is done in terms of dollar (currency or demand draft made in my name).

The regulation permits deposit of foreign currency by Account Holder. However, normally it is done by wire transfer (swift) from abroad. I assume that your father deposits the currency you gave during your temporary visit to India. If this is the case, the regulation permits such deposit.

I am a NRI at present. When I was in India I had a ordinary savings account. After I moved abroad I opened a demat account against this saving account. Now I have NRE accounts also and demat account against the NRE account. Can I do trading of shares against my earlier savings account? Do I have to necessarily convert the savings account to NRO account? If this has not been done till date what are the implications?

Your earlier Savings Account (meaning the Savings Bank Account, while you were a Resident in India) should have been re-designated as NRO account the moment you became a non-resident. Anyway, now you can do that. This alone would be consistent with the fact that you are presently a Non-resident Indian. As long as moneys have not been repatriated from this account, there are no serious implications in law, on your not re-designating the earlier Savings Account into a NRO Account.

Can an NRI invest in a Residential property in India through funds deposited in the NRE account and get the capital invested back to USA in terms of Dollars?

YES. NRIs are permitted to invest in a Residential property in India through funds deposited in the NRE account and repatriate the sale proceeds when sold to the extent of foreign exchange used for acquisition of such residential property.

Can you please let me know if there is any circular given out by RBI regarding limit of the amount that can be invested in a recurring deposit, both individual as well as corporate/ FIs. It would be really helpful if you can let me know the circular number, if at all such a circular exists.

For non-residents there are regulations governing opening and operating of NRO / NRE Accounts, which could be a savings, recurring deposit accounts. However, with regard to ceiling limits on such accounts, bankers may be given directions by RBI and there are no direct circulars available concerning such maximum ceiling limits amounts to be invested in such accounts. Accordingly, you may check with your bankers.

I am a US Citizen (of Indian origin) about to accept employment in India with an MNC. I have been in the US for 19 years.

In India, the MNC will pay me in INR. I would like to repatriate some of that earnings/salary to USD into my accounts in the US.

What is the right way to do this?

You can repatriate abroad (US) from out of your earnings in India, for specific purposes such as gift to relatives, Educational / Medical expenses for relatives etc only. If you can give me more details as to facts leading to your proposal for repatriation, then I can tell you the remittance methods.

I have been working in the US for 10 years now, during this period I had bought residential property in India. I am contemplating assuming US citizenship. What are the implications to the property ownership?

No implications at all. I assume that presently you are holding Indian Pass port and a non-resident in India, because your employment is in the US. Once you take up US Citizenship, you become a Person of Indian Origin (PIO). NRIs / PIOs are permitted to hold immovable residential properties in India. There are no implications of such property ownership in India by you after you become US Citizen.

How can I invest in Indian share market and Indian IPOs? I am having an NRE a/c with ICICI Bank.

I assume you are an NRI. You may contact a registered broker in any of the recognised Stock Exchange and carry on investments. Such a broker will take you through the procedures.

As an NRI, I own a residential property in a plot of land in India that has not been converted to non-agricultural. The latest is that it would be converted soon. I am aware that PIOs cannot own agricultural land. What happens in this situation as I already had ownership before taking up PIO status? I am contemplating assuming US citizenship.

Both NRIs/ PIOs are barred from investing in agricultural / plantation / farm lands. Thus, the investment even as an NRI is not as per regulations. You cannot repatriate the sale proceeds of such immovable property. However, as you apprehend, if this property is soon converted into regular residential property, then there may not be any problem. Anyway, there are no implications at all in your becoming US Citizen now, as long as you do not seek repatriation of sale proceeds of such investment.

I am a US Citizen of Indian origin residing in India and working at an MNC, drawing salary in Indian Rupees (INR). What is the right way to deposit part of my INR salary into my US bank account in US Dollar currency?

You are presently resident in India. A resident who is an employee cannot deposit moneys in US bank account. Residents can open & maintain Resident Foreign Currency Account only in specific cases. Therefore, from out of your rupee earnings you cannot deposit in US bank Account. However, if your intentions are to remit moneys to your family members, then it is possible through banking systems, subject to limits.

I am presently working in US and am an Indian citizen. I would like to know if there is any limit to investments I can make to Post office deposits, fixed deposits, Banks, Mutual funds etc. Also how do I repatriate my money back? Is it through NRO accounts?

NRIs are not permitted from making investments in Post Office deposits or PPF. However, Fixed deposits in banks are permitted without any restriction on limits under Exchange Control Laws. Mutual fund investment is subject to their terms and conditions.

Some of my friends and colleagues, who do not have an account in Saudi Arabia, as they cannot afford the minimum deposit of SR 5000, give me their money. I send this amount along with my money to my Account / my mother's account, which she will give to their parents by withdrawing from account by Cheque or Cash. Is there any legal problem in it? They can send it by Western Union but they cannot afford to go to bank as they were working in Industrial Areas and they are at work during the bank's working hours. The only option left for them is to take a leave for a day to send the remittance or give it to persons like me.

It is advisable to avoid such transaction immediately. Any remittance other than normal banking channel will be viewed suspiciously by regulatory authority. However, from the facts, the money does arrive India through banking channels, though you are not the full owner for it. But, when questions are asked, if at all asked, it would be unnecessary to defend and clarify such queries. I appreciate the practical difficulty preventing them from opening or remitting through Western Union. But hardship cannot be explained in situation like this. They can always remit with the help of friends like you through Western Union.

Most of my FCNR and NRE accounts are held under joint name with my wife, with myself as first account holder and either or Survivor operation. My wife has been residing in India for last one year due to some reasons. She may stay there for one or two more years (with annual trips abroad for one or two months). Does this impact the status of these accounts in any way? I was told that NRE accounts cannot have a resident as an account holder, even a joint account holder?

YES. Your Accounts cannot be jointly held with a resident. You have two options. (1) When one of the joint holders becomes resident, the bank may either delete his / her name and allow the account to continue as NRE account. (2) Alternatively, the Account can be re-designated as Resident Account.

I had remitted money for property construction in India. Due to change of plans by the property developer I have now cancelled the booking and wish to get my money repatriated. Is this possible and how? Can I deposit rupee check - received from India to NRI rupee account in the US - as I live in Los Angeles?

You may take up the matter with banker in India and explain the circumstances to seek repatriation. Your depositing the rupee check received from India, to be deposited in US Account does not solve the problem, as, it is 'foreign exchange' in legal terms, and, as such should still comply with Foreign Exchange Law here.

As NRI I'm planning to invest money under the PIS Scheme for NRIs. The PIS provider will take care of all issues dealing with Tax authorities. I have a few questions regarding my existing accounts/ income in India and Tax issues.

  1. I hold FD's etc in normal bank accounts (opened before becoming an NRI). The income in these accounts is subject to TDS. Do I have to convert these into NRO accounts?

    Your existing Account should be designated as a NRO Account.

  2. I have rental income from a house (which I co-own with my NRI brother) of around INR 40,000 a year. Can this be deposited to NRO Account?

    Yes. The rentals can be credited to NRO Account.

  3. I hold off shore FX deposits with an Indian bank. I believe this should not be a problem.

    I assume this is out of your earnings abroad. In such as case, there is no problem on your having investments abroad.

  4. I hold a PPF account in an Indian Bank. This is however being funded from my Local bank accounts and not from NRO account. Do I need to close this account?

    NRIs are not permitted to invest in PPF Accounts. So, you cannot further contribute to your existing PPF Account. You may contact your bankers for complying with banking procedures for closure of the PPF Account.

Can an Indian person on a student status visa abroad (for 2yrs now) avail of home loan in India?

Yes, there is no prohibition in Exchange Control Law for availing such loan. It is left to the commercial terms / conditions of the lending Bank.

I want to purchase a flat in Goa; I'm of UK nationality. I understand that since I'm originally from India I can purchase property with no problem. However, this would be strictly for investment purposes. If I wanted to sell the property a year later could I keep the profit or am I not entitled to this?

You are a Person of Indian Origin and, as such, you are permitted to invest in flat in India. Both investment and repatriation of sale proceeds is permissible. But, you can take back the Sale proceeds only to the extent of foreign exchange used to acquire the said flat.

A foreign business partner of mine has to transfer some money as my business share in USD to my Bank Account. So, my question is: Do I have to obtain approval from RBI, India for this transaction and what is the limit of the transaction?

I assume that this a share in Business income earned abroad. Such income can be credited to your Account. There is no RBI approval required nor is there any limit to the transaction. However, it is advisable to maintain FIRC (Foreign Inward Remittance Certificate) given by bankers stating clearly the purpose of the inward remittance in FIRC.

My brother who is working in US wants to send back $5000 a month for my parents. Will this create any problems for them? They would like to invest that money in a flat.

I am assuming that the flat is going to be bought in your name. You are the legal owner and the funder of the flat. In which case it is advisable to remit through either NRE Account or through normal banking channel so that you can avail repatriation facility later on. If you want your parents to buy in their name, the only way $ 5,000 month after month could be treated is your 'gift' to your parents. It is preferable to buy the property in your name and, later, if you so think, you can gift the flat in your parent's name.

Is it true that NRI or PIO can only repatriate the amount paid to acquire a residential property in India? If the amount of acquisition were paid through a NRE account, this would be great disadvantage because Indian Rupee might depreciate against a foreign currency and the value of property might increase substantially. How would the appreciation in value be treated - can this be deposited in the NRE account?

Yes. NRI / PIOs can only repatriate the amount of foreign exchange used for acquisition of property only. This is the rule regardless of the depreciation of exchange.

I have an NRO account that has balances transferred from previous resident account. I have also invested some amount from NRO account in Post Office Term deposit, which would mature and get credited to NRO account. My son will be going to college in 2006. My questions are:

  1. Can I repatriate to pay for my sons college fees? If so what is the limit? There is no current income in my NRO account.

    NRIs are not permitted from investing in Post Office (small savings) deposits. Therefore you are not allowed to repatriate funds from investments, which are not permitted.

  2. What are the required forms and is there a link from where I can download the forms?

    There are no forms in this respect.

  3. How much time does it take for the repatriation process?

    Repatriation is not allowed at all for the reasons stated in Query # 1 above.

Under Foreign Direct Investment, does the RBI permit the issuance of partly paid-up shares?

No. To the extent subscribed, the shares shall be fully paid up.

Can a person who is an NRI, when he comes to India on vacations, and whilst going back to out of India, take Indian currency with him? If yes, what is the limitation? Also, what if he carries dollars after exchanging his Indian currency thru an authorised agency like Thomas Cook etc, and how much is the limitations? Does he have to declare or fill any kind of form at the exchange?

As non-resident Indian you are entitled to deposit your legitimate dues into NRO Account, from out of which you can freely repatriate. There is no need to "carry US Dollars". Repatriation is for different amounts for different purposes. If you let us know the specific purpose, the ceiling limits will be answered.

I am an NRI living in US. My father wants to transfer (gift) funds to me. What are the legal issues in this regard? Is there any limit on funds he can send to me?

Gifts to any relative per calendar year up to $ 5,000 is permissible. Your father should contact banker and do the transaction, complying with any procedures prescribed by banker in this regard.

Are the balances transferred from previously held SB accounts to NRO accounts repatriable? I have read that for children's college education we can repatriate the funds. Is that changed?

Though there is no express regulation for repatriation of funds held in SB Accounts now transferred to NRO Account, the regulation prescribes that repatriation from NRO Account is possible for bona fide purposes. If you contact your bankers and state bona fide requirement abroad, your funds can be repatriated. Education of children is a bona fide purpose.

From NRO account I invested in Post Office Term deposit that pays very nominal interest. These deposits are due this year and I need to make a decision.

  1. I would like to repatriate only next year. In the meanwhile I would like to know the types of investments and the institutions where I can transfer the funds, to be eligible for repatriation.

    An investment in Post Office deposits is not permitted for NRIs. You may close the deposit and open NRO Account with any bank. As for investment is concerned, NRIs are permitted to invest on repatriation basis in shares (through Stock Exchanges), Mutual funds. Since it is a short-term investment it is advisable to hold in bank deposit.

  2. Do we need RBI permission for repatriation for college education?

    Repatriation for education purposes is permissible. The key is where your funds are available from which you desire repatriation.

  3. I visit India at least once a year. Am I allowed to exchange from my NRO rupee account to Dollars for expenses for my travel back to US? If so what is the maximum amount that we can carry per head?

    You are permitted to withdraw for any purposes from NRO Account. Alternatively, you may seek repatriation for any bona fide purposes from abroad and use the funds for meeting your expenses.

Two years back I purchased a piece of land in India using my NRE account. Now I would like to sell this property and I have found another NRI buyer in the US who has agreed to pay me the amount in US Dollar. My question is: Can we get the sale/registration done thru a POA in India b) Do I need to get any permission from RBI?

I assume the land you had purchased is not an agricultural or plantation land. Repatriation of sale proceeds is permissible to the extent of foreign exchange used to acquire the said land. The buyer may have to remit the dollars into your account in India, from which you can seek repatriation. Registration of land - transfer of land - through POA is possible in law. For this, you may have to contact your property lawyer.

My friends being of American origin would like to get into a joint venture (ITES) where I head the company in India and look in the overall activity. They are 100% financial backers. They are just plain business individuals. The approximate investment would be up to $200,000. I wish to register my company and open account. Can I transfer the money directly or do I need to get an approval of RBI prior to the transfer of funds for business (ITES) purposes?

The proposed investment in India is Foreign Direct Investment. You have to comply with the various procedures and compliances prescribed in this regard under the Foreign Exchange Management (issue or Transfer of Security by Person Resident outside India) Regulations, 2000, Notification 20 / 2000. Assuming the investment satisfies the regulations in this regard, the Indian Company shall file a report with RBI within 30 days of remitting money for FDI and file form FC GPR with 30 days of investment.

Please tell me the legal implications on getting NRI funds for running our business at lower interest rates (since it is lower than bank interest rates), whether it is permissible? Any idea about securing NRI funds for running our business?

NRIs can be shareholders. They can lend money as Foreign Currency Loan under ECB (External Commercial Borrowings) guidelines in this regard. A lot depends on details of such investment and how your facts comply with these regulations. Broadly, if shareholders lend money as ECB, subject to three-year maturity period they can lend ECB to Indian companies, complying with all conditions of Automatic Route for ECB.

I'm Swiss, living in Switzerland with my Indian wife, and we plan to purchase a house for our parents in India. What are the best options regarding money transfers and on whose name to put the house papers on (ourselves or our parents' name)?

I assume that you are presently a Swiss, who was Indian citizen at some point. If this is so, you are Person of Indian origin (PoI). NRI or PoIs are permitted to buy house in India. The money can be remitted in foreign exchange through normal banking channels or by debit to NRE Account, if any in India. The purchase of property can be in the name of NRI. In case your parents desire to buy the property, then the money should be first gifted to them. It is advisable to buy the property in by NRI or PoI who remits money to India.

Can a Bangladeshi National purchase a flat in India? If so, what is the process?

No. A Bangladesh National is not permitted to purchase flat in India.

We are US citizens and NRIs. We recently purchased a property in India to use it as our residence whenever we are in India. We issued a check from our NRE Account to buy this residential property. Now a question comes to our mind that if and when we sell this property and we get the selling price, how will we be able to deposit the amount in our NRE Account and how can we repatriate the amount? Because we cannot deposit any check in our NRE Account. Please guide us for our future problem now.

You may deposit the check in NRO Account from out of which repatriation out of sale proceeds of your residence in India is freely permissible. As of now, repatriation of sale proceeds is permitted up to foreign exchange used to acquire the property.

My uncle of Indian origin is a US citizen for many years now. He had purchased some properties prior to being a US citizen. How can he sell the properties? He does not have dual citizenship or PIO card. Does he need PIO card?

Can I assume that your uncle had purchased the property while he was NRI, prior to being a US Citizen. If so, repatriability of sale proceeds is just the same whether a person is NRI or PIO. There is no need to have PIO card and dual citizenship is not relevant here at all.

Alternatively, if your uncle had purchased the property while he was a Resident in India, he can still sell and repatriate the Sale proceeds.

I am a NRI. I have been awarded ESOPs by my company in India. Can I purchase the ESOPs through the Portfolio Investment Scheme?

ESOP is a specific entitlement by virtue of being in employment with a Company, while Portfolio Investment Scheme is a general Investment Scheme available for all NRIs. ESOP has to opted for as per the terms of ESOP Scheme only and not through Stock Exchange (which is termed Portfolio investment scheme). However, you may, subject to terms and conditions of ESOP Scheme, sell the stock through Stock Exchange.

As an NRI, please let me know what are the instruments I would be permitted to invest in and in those I cannot.

Generally, NRIs are permitted to invest in shares, debentures of limited companies, through recognised Stock Exchanges in India or by direct placement. They may also invest in Mutual fund, Bank deposits. NRIs are not permitted to invest in small savings schemes such as Post office or PPF schemes.

I have NRO account with Citibank. I retired from Govt. undertaking at India last year and settled in USA. I received all my retirement benefits (25lacs) after I came here. All these are in my Indian saving account in some other bank. I want to transfer these rupees to my NRO account in Dollars. What is the formality required to be done for the same? Please note I will not be visiting India for one more year.

Any legitimate dues from India could be credited to NRO Account. So, you need to open an NRO Account and deposit the funds explaining the source to Bankers, if asked for.

I am a Canadian citizen and living in Canada from the last six years. My wife is also living in Canada from last five years but still holding Indian passport. Can she buy Post Office's KVP? WE are planning to return to India in March 2006 to live there for our rest of life. Can I buy KVP or Post office monthly saving pans on my name once I am in India?

Small savings like Post Office KVP or monthly income savings are not permitted for NRIs, As such you may invest in these once you come to India for good and become Resident.

I already have an NRO account with Citibank. All the money I have is my from retirement benefits. What to do to transfer it? What papers are needed?

Repatriation from NRO Account is allowed for any bona fide purpose. You may seek repatriation from your bankers stating bona fide purpose. No specific documents are prescribed and it is left to repatriating bankers.

I am a USA citizen and planning to obtain Indian overseas citizenship. My parents gave some agriculture property as a gift and I am also inheriting some agriculture land. Am I eligible to keep this agriculture land?

I am assuming that you are a Person of Indian Origin (meaning at some point of time you were a Indian Citizen). You may inherit the agricultural land but repatriate the sale proceeds, if sold later, only subject to RBI permission.

As a NRI can I invest in 6 Year Post office Monthly Scheme? Which are the eligible investments in Postal schemes for NRI?

Small savings scheme in Post Office is not permitted investment for NRIs.

I'm a NRI and in USA at the moment. I want to open a EURO account and convert the money from either Dollars or Rupees to EURO and keep it in savings account. Is it possible? If yes, Can I open the account from USA? At the time of maturity, can I convert the money back either to Dollars or Rupees?

You may contact your bankers to open a Foreign Currency Account, complying with the procedures. However, both inward remittance (credit) and repatriation outside India (debit) are strictly as per regulation only. Trading in foreign currency is not permitted. If you desire to open foreign currency account, you may do so only in a Bank in India, after complying with the procedures from wherever you live.

I have some prize money in US dollars insured and deposited in my name in some foreign bank. Can I get it transferred to Indian bank here? What is the procedure?

Any inward remittance is permissible. You may contact your bankers and remit the money to your account in India.

I am living in USA for the last 7 yrs. and am a US citizen now. I worked for 38 yrs. in India before migrating to the US and have some bank deposits there. I bought a house here and would like to pay off some loan amount. How much Indian rupee I can convert to US $ to bring to US? What is the procedure for the same?

You may open a NRO account with a bank in India and request for repatriation for any bona fide purpose with your bankers.

I am confused on whether I need to open an NRO account or can I get the funds repatriated to me through my current NRE account. The RBI web site I got from Citibank is pretty confusing in terms of understanding the exact process of:

a. Funding the real estate investment (NRE, NRO or other another type of account?) Is there a limit on number of properties I can purchase?

If you think of repatriation of sale proceeds of immovable property later, then you shall fund out of NRE Account or foreign exchange brought into India for acquisition of property. Since, repatriation is allowed only for two residential properties, it is advisable to buy only two residential properties. You are not allowed to purchase agricultural / plantation / farmhouse.

b. Depositing rental income - What type of account is best suited for this if I need to repatriate the rental income?

You may deposit the rentals in NRO Account. Since rentals are current account transaction, they are freely repatriable.

c. Formalities required for repatriation of funds back to USA - Any restrictions on amount? Holding period of the property etc? What type of account (NRE, NRO etc.)?

You may repatriate the sale proceeds only up to foreign exchange used to acquire such property. Repatriation is possible freely allowed from NRO Account specifically.

d. What is the status of FDI (foreign direct investment) in real estate projects in India?

There have some recent Policy announcement in this regard. The salient features of the Policy include: 100% investment under Automatic route in township, housing, built up infrastructure and construction development projects. The minimum land area for projects is 25 acres or a built up area of 50,000 sq.mts; the minimum investment size being $ 5 million for JVs. Real estate trading - sale of underdeveloped plots - is not permitted.

Is it true that the RBI has stopped allowing US-based NRIs to do Offline Share trading?

Share trading is possible presently only through registered Share Brokers, in recognised stock exchanges, not otherwise (offline trading or other means).

According to the following notification by the RBI:

Repatriation outside India, including credit to RFC, NRE or FCNR account, of sale proceeds of any immovable property situated in India, requires prior permission of the Reserve Bank except in circumstances stated in paragraph 13 below.

In the event of sale of immovable property other than agricultural land/farm house/plantation property in India by a person resident outside India, who is a citizen of India, or a person of Indian origin, the authorised dealer may allow repatriation of the sale proceeds outside India, provided all the following conditions are satisfied: -

the immovable property was acquired by the seller in accordance with the provisions of the Exchange Control Rules /Regulations/Law in force at the time of acquisition, or the provisions of the Regulations framed under the Foreign Exchange Management Act,1999;

the amount to be repatriated does not exceed (a) the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in foreign currency non-resident account or (b) the foreign currency equivalent, as on the date of payment, of the amount paid where such payment was made from the funds held in non-resident external account for acquisition of the property;

I am an NRI, with an existing NRE rupee checking account with Citibank, India. I remit US$ into the a/c which are automatically converted and held in Indian Rs. I can repatriate my a/c holdings in US $ at any time. Are the RBI repatriation conditions satisfied (i.e. property must be purchased initially "out of funds held in foreign currency non-resident account") if I remit the property purchase amount through my CITI NRE rupee checking a/c, or do I need to open and operate through a FCNR a/c that accepts and holds currency in US $ only? I would greatly appreciate your advice at this point to time, to avoid complications in repatriating property sales proceeds at a later time.

Purchase of immovable property from out of NRE Account is permissible. Repatriation of sale proceeds of such immovable property is also permissible subject to conditions above stated in the RBI directions. As for the Foreign Exchange Regulations are concerned, the term used is only "NRE Account". Your use of term "NRE rupee Checking Account", I suppose, means the same Account, with cheque facility. In that case purchase & sale of property from such account, including repatriation later is permissible.

I was an NRI with property and pension in India. Now I'm a New Zealand citizen now. What's my status in India and have I the right to dispose of my property and repatriate the proceeds after paying the taxes?

Your status is "Person of Indian Origin". I am assuming that you had acquired the property while you were a resident (please clarify that in case you had acquired the property while you were an NRI). Your pension is out of services rendered while you were employed & resident in India. You can dispose of your property and repatriate the sale proceeds (subject to taxes), as Foreign exchange Law permits transfer and repatriation of properties by non-residents, if such property was acquired while they were residents.

I have been working in US since 2000 and I have operated an NRE acct with Citibank for last 2.5 years. I paid for a new house in Delhi through the funds from this acct. I have been depositing money on a monthly basis and it was being automatically deducted by IDBI (I took a home loan) from them. Next month I'm selling that house in India and I want the resulting amount to be available to me in US as Dollars since I'm settling down in US forever. Please advise what's the best strategy to follow so that I'm able to repatriate all (or at least most of the money) back in US. Can I also repatriate any other amounts that I ever deposited in this account even though there were taken out by my father in India for his personal use? In other words, can I replenish my account in Indian rupees with the amount that was withdrawn in last couple of years while I'm in India , and then be able to repatriate that in US?

I am assuming that while purchasing the property you complied with the regulations in this regard. You may sell and repatriate the sale proceeds, to the extent of foreign exchange utilised for acquisition of property.

There cannot be a general answer to this, because both 'credits' & 'debits (withdrawals) are regulated from this account. If the moneys taken out of this account are permitted by the regulation, repatriation will be allowed now.

Under the liberalisation scheme of remittance of us$25000, following clarifications are required

    1.Can minors holding funds under their name also remit funds overseas?

    The remittance facility is available up to $ 25,000 for Resident Individuals. The direction from RBI does not exclude 'minors, and, as such, minor-residents can avail the facility.

    2. Can parents jointly purchase property overseas with minor children under this scheme?

    Remitter can purchase the property. The circular dealing with remittance facility up to $ 25,000 for Residents is an 'enabling' direction from RBI. Therefore, while the direction gives permission for remitter to acquire and hold immovable property abroad, it is silent about joint holding of such property, which essentially depends on the local laws.

My father has owned land & property in Punjab for over 50 years. Due to old age, he wishes to sell this. He has been a UK citizen for over 40 years, and has a bank account in India, which he uses when visiting, which is infrequent. What is his position in selling the land, who can he approach for legal advice, and transfer of monies to the UK? Can you advise what should be the first step? Are there agents/solicitors who can act on his behalf in India? He has brothers and sisters who are living there.

Under the provisions of the Foreign Exchange Management Act, 1999 (FEMA), a Person resident outside India (non-resident) may transfer any immovable property situated in India, if such property was either acquired by the non-resident while he was a Resident in India or inherited from a person who was a resident in India. I am assuming the following: (i) either your father acquired the property you are mentioning while your father was a resident in India or was inherited by him from a resident. If this is so, the law permits transfer and, therefore, repatriation. You may approach the banker for necessary proof for permitting repatriation and, thereafter arrange to sell the Land for completing the Transaction. As for sale of Land is concerned you may approach through your known person in your place in India, a reliable person of your choice for completing the sale in your best interests. The sale is subject to payment of Capital Gains tax.

I was working In USA from 1999-2002 under H1B visa and the savings were transferred to India and invested in NRE account with SBI, bought some property also from that savings. Can this money be take back to USA upon maturity, which is in year 2012?Is the interest paid on this NRE account still tax free ? Can the property I have bought out of this NRE account be sold at a later year and converted in dollars to be taken back to USA? If I want to take half of my NRE account money now and half later is it okay with the rules?

Yes, you may take the money upon maturity. Taking half the money from out of your NRE Account depends on the purpose for which remittance is sought. Normally, any bona fide purpose remittance is considered by the Bankers.

Yes, the property you had brought from out of NRE Account can be sold and sale proceeds can be repatriated, to the extent of foreign exchange used to acquire the said property.

I have money in my NRE savings account. I am planning construct first floor on the house purchased using NRE funds. To use that money so that in case in future if I sell the property can that money be transferred out of India? What proofs I have to keep in order to show the amount I have spent in construction? The back statements are enough?

The regulation does not provide for nature of proof. The estimates and certification from the builder / Engineer as to value of construction (comparable with market rates for that Class of construction) together with proof as payment of such monies from out of NRE Account is enough.

I am NRI. Once I move back to India, I will be in RNOR status. Can person with RNOR status invest money in Postal MIS, RBI bonds, KVP etc?

As for the Foreign Exchange law is concerned, there are only two statuses, viz. Resident & non-resident. There is no RNOR as in Income Tax Act. Once, you legally attain the Resident status in India, you are free to invest in POMIS / RBI bonds.

I am a NRI living in USA. I have some ancestral property in India, which I would like to sell. Can I get the returns from the sale to US and if yes how much?

In terms of Section 6 (5) of the Foreign Exchange Management Act, 1999 you may repatriate the entire sale proceeds relatable to your share in ancestral property (subject to taxes). The banker may require the proof of ancestral property.

I have cash money from Proceedings of real estate inherited from my father, purchased some 30 years back. The money is now with my relative in India. Being NRI, what are my options to bring that money to USA?

In terms of Foreign Exchange Management Act, you are permitted to seek repatriation (under section 6 (5)) repatriation of the money, producing proof of inheritance and your share in the sale proceeds. The repatriation is subject to taxes.

I am an NRI US citizen. I would like to purchase a commercial property in India.

    1 As an NRI, can I jointly own that property with my brother who is a resident of India (share depending on each person's investment)?

    Yes. But the repatriation is subject to regulations and can only be to the extent of your share in the property.

    2 I will be making a part of my share of payment using US bank loan. So until it is paid back, I will also be paying monthly interest on it. This amount needs to come out each month from business expenses and deposited in my NRO/NRE RCA account. Is this interest amount also repatriable? (Because the principal plus interest at the end will be more than my initial dollar investment).

    Can you elaborate what do you mean by "This amount needs to come out each month from business expenses and deposited in my NRO/NRE RCA account. Is this interest amount also repatriable? "

    Clarification:

    I am taking a loan (from US bank) to pay for my share of the real estate commercial property in India. I will need to pay the Interest on that loan here in US (and some Principal each month). So every month, there will be a loan payment that will come out from the proposed business (say Rs. 20000 per month going towards P & I, payable to myself in India and deposited in my NRO account if permitted). But I believe I can only repatriate the actual amount (Principal) that corresponds to my initial investment share in the property (when we sell it). Now adding both Principal and Interest, it'll be more than that original amount. How do I handle that? In other words, is it legal to deposit this Interest portion of the amount in NRO account each month and can it be repatriated in addition to the Principal amount?

    There are two issues here. Both are separate and independent by nature and dealt with differently by law.

    One, repatriation of sale proceeds of immovable property, which can be made only up to foreign exchange utilised for acquiring such property. The position is same regardless of your commercial compulsions in US.

    The second issue is the income that you may earn out of the 'business venture' in India, which you are free to repatriate, subject to taxes. I still need more information on the second issue. How business income is deposited to your account every month? This is relevant for decision-making. What type of entity is your business -- a company?

    The business in India will be a company and I will be a partner in the business. I will be a partner in the real estate property (business premises) and that share will be based on my foreign exchange investment amount towards purchasing the premises (which you said I can repatriate only up to the actual amount I have used to buy the property). But I may hold different percentage of partnership in the actual business itself, as someone else will be operating it (managing partner).

    I have NRO and NRE accounts. I plan to deposit my share of the business income in my NRO account. So if there's any clarification or feedback required to be added to your earlier response, please do so.

    In so far as immovable property issue is concerned, the additional facts given above, does not change the answer. I am assuming you propose to hold the property in your individual name (together with your co-owner) and not in the name of the Company. If you hold it in the name of your company, then only Company can sell the property and you cannot repatriate the foreign exchange.

    As for as business income is concerned, subject to regulation for carrying on such business and taxes, you can deposit your share of the business income in your NRO Account.

    3 Because the property will be jointly held, is there any particular caution I should keep at the time of selling and repatriating the property?

    It is preferable that your share is clearly identifiable and source of your investment is clearly maintained (such as from NRE Account or by foreign exchange remitted through normal banking channels).

I came back to India in the year 2002, January. One year before coming back to India I opened NRE account from USA. After I came back I dissolved one FD out of my NRE account and bought a flat from that money for residential purpose. I remained in India every single day since JAN 2002. Now I have a green card and want to go back to USA. I want to sell my flat and take that money with me to USA, which is about 20,000 US$.

My questions are:

    1. Can I take this money to USA?

    Yes, to the extent of foreign exchange utilised for acquiring the flat. You may approach banker, giving proof of investment through NRE Account.

    2. Can I split this money in to two persons, as my wife is also going with me?

    If you have purchased the flat, using your own money, you repatriate the sale proceeds yourself, not by splitting the money in two accounts.

    3. What are the rules for Green card holder in this particular case?

    Green Card position does not affect this case at all. From the details shared by you, it is clear that you had purchased the property using your NRE Account, which you opened in accordance with Regulations, while you were non-resident. The fact that subsequently you were resident (since January 2002) does not change this position. Now, you again want to go back to USA, and as a non-resident you can repatriate the sale proceeds, to the extent of foreign exchange utilised for acquisition.

My husband and I are both NRIs residing in Dubai. Two years back I had purchased an apartment in Delhi from the money that I had been depositing in my NRO account from Dubai. I would now like to take a loan against that apartment and use the money to buy a flat in Dubai. If not, then can I sell that and use the money to buy the flat in Dubai? I have been told that any proceeds from the sale of my Delhi apartment cannot be repatriated to Dubai. Please help, as I am not very familiar with the RBI rules.

The sale proceeds of immovable property invested by non-residents like you are repatriable, if only, the investment is made in foreign exchange (either out of remittance through normal banking channels or NRE Account). Since you have used NRO Account, the sale proceeds cannot be repatriated.

I had opened a PPF account when I was resident in India. I plan to stay outside India for about two years and then go back to India. I understand that as NRI I cannot invest in PPF. Can my parents contribute to my PPF account to keep it live till the time we return to India? I had invested money in Mutual Funds as resident. Can I switch / encash the MF units? Can I invest additional amounts out of NRE/NRO account in same mutual fund folio that was purchased as resident investor?

As per Government of India regulations, NRIs are not permitted to invest in PPF. Your parents cannot invest in your account. As for as investment in Mutual funds are concerned, NRIs are generally permitted to invest, subject to terms and conditions of the fund. The investments you had already made in Mutual fund can be encashed. Your additional investment in the same Mutual fund (from out of NRE/NRO Account) is possible, provided, you inform the change of status to Mutual fund, and the fund terms and conditions permit such investment.

I am an NRI. I gave loan to my friend (nearly 20 lakhs). I am planning to collect 4% interest from him. Is there any interest limit fixed by RBI or Indian Govt? Please let me know the way of collecting the interest. Is it to be paid every month to me or he can pay when he returns the money after (2 years)?

I am assuming that the loan itself was given on non-repatriation basis subject to regulations. If so, the rate of interest on the loan shall not exceed two percentage points over the Bank rate prevailing on the date of availment of loan.

I am a person of Indian origin. Recently I purchased a residential property in Bangalore and have given it for rent. The property was partly funded by foreign exchange and partly by local rupee account. Question: Can I repatriate the entire rental income (less taxes) to the US? Are there any restrictions to repatriation of rental income besides deduction of taxes and other charges?

Rentals being a current account transaction, you can repatriate the same, subject to taxes. There are no other deductions.

I am a NRI in USA holding US citizenship. Currently, I have Citibank Rupee checking account and interested in setting up an account with one of the Brokerage firms that will allow me place stock trades. What are the steps to accomplish this? What are the RBI regulations? Are there any RBI registration forms?

There is general permission given to NRIs for investment in stocks through registered brokers in Stock exchanges. You may contact any registered broker and they will take you through procedures for your requirement. There are no RBI registration forms.

If I have an NRI account in any nationalised bank and during my stay if I wish to draw money in $ currency, is there an limitation on amount in doing so? Also, if I cease to be NRI but keep my account that contains $, then is there any specified period beyond which I have to change my dollars into Indian rupees?

As per regulations, you are eligible to draw from your NRI deposit Account, for local disbursements. There is no limitation. But investment is made out of such drawal, then such investment shall be as per regulations.

There is no specified period within which the non-resident status Account should be re-designated as 'resident' Account. However, factually, it would be wrong that an NRI continue to maintain Account, while his status has already become resident, and, as such it would be advisable to designate such account into a resident account.

Can a foreign national buy any immovable property in India and if so what are the terms and conditions attached?

There are two categories in foreign national and the answer is different for them. One, a foreign national, who was earlier an Indian Pass port holder (he is 'Person of Indian origin' by status). PIOs can by immovable property in India, by remitting foreign exchange into India or by debit to NRE Account. Second, foreign national (who is not Person of Indian origin) is not permitted to buy immovable property in India.

I am an Indian resident, but now in Toronto for 3 months. Will be travelling often to USA and Canada for business. Pls advice how can I go about getting a credit card.

Opening a Foreign Currency Account is permissible on your business visit abroad, provided on your return to India, the balance in the Account is repatriated into India. For Credit Card you may contact any of the Indian bank, since it is going to be international Card. The same could be had subject to regular banking terms and conditions.

There is a non-profit trust in India that helps education. We are a bunch of NRIs who want to send money to the trust regularly. Does the trust require RBI approval and does it need to pay any approval fee to RBI, if so, how much?

This would be a 'Foreign contribution' from a 'Foreign source', and the relevant law is the Foreign Contribution (Regulation) Act (FCRA). The Home Ministry of the Central Government is the appropriate Authority under FCRA and not RBI. Basically, you have to register your trust under FCRA as per its Rules for seeking general permission for acceptance of Foreign Contribution. Otherwise, every contribution should have prior permission for acceptance. If more details are given further assistance could be made available.

Can a Non Resident (Parent Company) pledge/ mortgage shares of Indian Company (Subsidiary Company) to a Non Resident (Foreign Company), What would be the formalities in India. (RBI, CLB, etc.,)

There is no direct regulation covering 'Pledge' of shares from non-resident to another non-resident, although there are provisions covering transfer of shares. For transfer of shares from one non-resident to another non-resident there is no permission needed from RBI, as long as, the non-resident buyer does not have same business in India. For these reasons, pledge is to be done in accordance with the provision contained in the Articles of Association of the Company. Could you please give me two additional relevant information on this point: (i) is the non-resident to whom pledge is proposed, is having a same line of business as that of the Company whose shares are proposed to be pledged? (ii) Is it a private limited Company or public limited company?

One of my friends, an NRI, has purchased 3 acres of agricultural land in India from another NRI (a PIO). The sale proceeds have not been repatriated, and there is also no intention of doing so. I believe the sale of agricultural land by one NRI to another NRI is not permitted without the prior permission from the RBI, but neither my friend nor the seller were aware of this. Please advise what the legal position in this sort of a situation is. (i)Can the sale be now regularised by paying a fine/penalty? (ii)How can the situation be rectified and which is the authority one should approach for this purpose?

The acquisition is in violation of Exchange Control law. The money cannot be repatriated. You have to apply to RBI (Regional office) praying for necessary directions in this regard.

I, my wife & minor child are NRIS'. Can I invest Rs.1 Lakh each in "National Savings Certificate VIII issue" without attracting tax?

Investment in small savings such as NSC is prohibited for NRIs.

I am providing researched information through email on annual basis for which I receive fee in advance. Kindly let me know the legal procedures to receive money in advance towards an annual subscription services.

It is inward remittance for India. Therefore, you can receive it through normal banking channel, and obtain the Foreign Inward Remittance Certificate (FIRC).

I am an Australian citizen now and want to return back to India - do I need to forgo my Aussie citizenship in order to set up a manufacturing unit and other businesses in India? If I get a PIO card, will I be able to do business and own property in India?

I am assuming that you were an Indian Citizen before and if so, your status is PIO. NRIs/ PIOs are given permission to invest in Foreign Direct Investment in India. PIO are given general permission to buy immovable property in India using foreign exchange for acquisition.

I am a naturalized US Citizen. I was born in India. Can I get housing loans in India? Do I have to get the PIO Card for that?

PIO can buy immovable property. Exchange control laws do not govern sanction of loan by commercial banks. For loans, please contact commercial banks.

I am an NRI. In view to settle in India I bought land and house from a PIO in Kerala. Both of us were not aware of rule that we should have RBI permission. Now what is best solution for us to get the permission after registration is done in ignorance under FEMA for regularisation? I intend to stay in house in agricultural land.

NRIs cannot buy agricultural land. You have to apply to RBI for regularising it. You cannot sell and repatriate the sale proceeds. However, since you intend settling in India, your status may soon become "resident" under FEMA and, as such, the regularisation may not be difficult.

Can NRI buy Property in INDIA in name of mother and then transfer to self after 2 years and still have funds repatriate back to USA after the sale of this property? Do I(NRI) have to open NRE account to send money for this purchase?

Acquiring property by NRI shall be through foreign exchange remitted into India through normal banking channel or by using funds in NRE Account. If you desire second option, you may open NRE Account. But, as NRI you cannot buy the property in your mother's name. You can gift moneys to your mother and thereafter, your mother can using that gift money buy the property, in which case it will amount to a 'resident' buying the immovable property. The consequence is that when a resident sells the property, and desire to repatriate the sale proceeds, the facts may not justify the transaction as repatriation of sale proceeds by a 'non-resident'. It is preferable to buy the property in your name itself using foreign exchange, for easy repatriation later.

Is there any cap on how much you can transfer from any US bank acct. to NRI account at each transaction? Any federal guidelines?

Exchange control law does not regulate any ceiling limit on such wire transfer.

I am confused about certain financial transactions due to my legal status in India.

I lived in US/Canada for almost 20 years and returned to India in 2002 for good and took employment here. My wife and I are both Canadian citizens. I purchased a PIO card but wife didn't. My confusions are as follows:

    1) Is it allowed to hold NRE and NRO acccounts at the same time? I had a NRE account earlier. I opened a NRO account to get my Indian salary deposited in it.

    Factually you are a resident in India under the provisions of the Foreign Exchange Management Act, since you are in continuous employment in India since 2002. Therefore you are supposed to designate your NRO / NRE Account into resident account, as per Regulations.

    2) Does my wife need to purchase the PIO card in order to work in India?

    Answer to the question depends on the HR Policy of the Employer and Visa rules (employment or work permit visa, tourist visa etc).

    However, I am assuming that you / your wife were Indian before 20 years, and, as such your status is PIO. Obtaining PIO status will facilitate certain transactions in law.

    3) When I apply for a housing loan should I apply as a resident or a non-resident? I was told that I should convert my NRO account into a resident account and apply for a resident loan.

    You are a resident and as such, you have designate your NRO / NRE Accounts into regular resident Account. You have to apply for loan disclosing the fact that you are a Canadian Citizen.

    4) If my wife books a flat in India and sells it before taking possession are there any formalities due to her status?

    I am assuming your wife is PIO. PIOs are permitted to acquire immovable property, through foreign exchange, if repatriation is sought. If your wife has used rupee to acquire flat, no formalities are required as long as the sale proceeds are neither deposited into non-resident Account nor repatriated.

My brother is studying Master in Information Technology in the University of Canberra, Australia. He will be completing the course around 12 June 2005.He is applying for Permanent Residential Visa in Australia. One of the conditions stipulated by Government of Australia for granting such Visa is to create deposit of Aus $100,000 in Government Securities for a period of one year in his name at the prevailing interest rate. The deposit can be taken back at the end of one year and can be repatriated to India.

The questions are

a) Whether under the present Indian Exchange Control Regulation such remittances by close relatives like father, brother, mother by pooling reserves from their resident Account is permitted?

Circular # 33 dated 13-11-2003 read with Circular # 45 dated 8-12-2003 permits remittance up to US $ 100,000. You may approach bankers, with specific documents for remittance.

b) In the event of not able to generate their own resource are they permitted to mortgage their house property and raise loan through banking channel and utilise that amount for making remittances for the said purpose?

In view of the above, the answer to this question may not be relevant. However, you may even avail educational loan from bankers.

I am a Suvidha account holder. Please advice me on the following.

I am to get a cheque from abroad (U.S). This is basically a loan sanctioned to my acquaintance, who wants me to receive the amount and send it back to organisation, which she owes some dues. She cannot forward the money from her country because of some new regulations.

In this transaction

1) What are the precautions that I should take that this entire process is legal and fair?

Kindly clarify what is 'Suvidha A/c'. However pending this, I have answered the queries, as I assume from the facts presented that you are receiving in India certain sum of money on behalf of a non-resident and making over that money to another firm.

The money you receive shall be through normal banking channel. You may get the Foreign Inward Remittance Certificate (FIRC) from bankers and preserve them for your records. This is proof of receiving money through banking system, in foreign exchange. There are no other precautions needed.

2) What is the basic limit of money that can be received or sent through international cheque/D.D or T.T?

There is no limit prescribed for inward remittance of money

3) Will I be liable to pay any tax for undertaking such exercise through my bank account?

No tax will arise as long as this is a loan. However, these transactions are better avoided unless the parties involved are well known.

I am an NRI account holder at Citibank, Delhi. I am living in Germany. I was in Delhi from 06.05.2005 to 21.05.2005. It was a very short visit to meet my parents. I left a sum of 5000 Euros (Cash) with my sister. My sister maintains my account. She has maintaining authority in my account. I also left cash deposit slip with my signature. Now when my sister went to the bank branch to deposit the Euros, the bank told her that only the account holder could deposit the cash. I cannot come to India to deposit the money. I shall be in India only in 2007.

Please suggest me what could be done now. I can provide all documents to prove that I was in India. Above all, I left cash deposit slip with my signature.

This is a necessary procedural requirement. Two options are there. You may take the money back from your sister and remit the same through wire transfer into your account. Alternatively, you may write / fax to your bankers giving the details they need.

Can I operate online forex trading a/c from India with a US-based company? How do I do the remittance to and from US in a bank? Am I authorised to do Trading? What is the procedure to go ahead with Live Trading online as the remittance to the US-based company is only US 300$?

Forex trading is permitted only by license holders by RBI. This is normally given only for Bankers.

My father owned a house in Haryana. He passed away a few months ago. His will (notarised and signed by 2 witnesses) divides all of his assets equally between my brother and me. We would like to sell the house but the deed is in my father's name. What do we need to do?

As for foreign exchange law is concerned, on sale, if you desire to repatriate the sale proceeds, you may have to produce the proof of inheritance to your bankers, the share of non-resident in such property may be permitted for remittance. Insofar as general property law is concerned, you may seek the advice of a local property law expert. Normally, the property deed, together with the will, may have to be probated in Court for getting clear title.

What is NRO account? Is it repatriable? Can we deposit Indian rupee in that account? Can this account operated by person in India?

NRO Account is Non-resident Rupee Account opened & maintained by a non-resident with a bank in India as per foreign exchange regulations in this regard. Yes, rupee earnings from legitimate sources in India is permitted to be deposited with NRO Account. Resident cannot operate this account. For procedures for opening / operating this Account you may contact your bankers.

Can I deposit a cheque from an external non-Citibank a/c to my NRE rupee checking a/c? My external account is now a resident account (India) and will be converted to NRO account soon.

No. You cannot deposit the rupee check into your NRE Account. As per existing regulation for NRE Account, personal cheques drawn by the account holder expressed in Indian rupees can be deposited only during the temporary visit of account holder to India, for which reimbursement will be received in foreign currency.

How can one make a deposit in Indian rupees in India? What type of account NRI need to open with Citibank?

You may open NRE or NRO Account; each of this have different rules of permissible debits / credits. You may contact your bankers to open any one of these to suit to your requirement.

My father is working in Chicago. He would be retiring in two months and returning to India. I would like his pension to be credited to his Indian bank account. What will be the procedure?

Your father can receive the pension abroad in his bank account and have this transmitted to your bank account in India. Alternatively, the remittance details can be given to pension remitter directly to be remitted into Indian bank account.

I am an Indian national, working in merchant navy in a foreign company. But now I am stuck with a peculiar problem - Citibank refuses to give me a credit card and the reason given is that as a non-resident, I should go and apply for a card from my country of residence (outside India). In my case, the country of residence is India. Any suggestions regarding this?

Given these facts, you may request your banker to consider the following two A.P (DIR Series) circulars

Circular No.40 of Nov.5, 2002 read with Circular No.59 of Dec.9, 2002.

I am a person of Indian origin and currently a citizen of the U.S.A. Can I invest in both Indian rupees as well as US Dollars in India?

Since specific investments are not given, the answer is generally you can invest. However, repatriation is normally permissible only if the investment is in US Dollars.

Can a wholly owned subsidiary of a foreign company buy an office building in India and then lease out part of it? Will this be violating FEMA, and rules and regulations under it?

In terms of FEMA, while real estate business is prohibited, an Indian company carrying on business, which buys office / factory building for carrying on its business activity, is permissible. Thus the wholly owned subsidiary of the foreign company is a company registered in India. It is not known what is the main object of such Company. As long as its main business is not real estate, it can buy office building, and can lease them out, to the extent not immediately required for its business.

I am an NRI and I have purchased a property in Mumbai. Can I gift this residential property to my brother in Mumbai and what will be the gift tax angle?

In FEMA there is no bar in your gifting the property to your brother. You have to get informed about the registration of Gift deed in terms of local registration procedures / costs. No gift tax exists currently( in India) on the facts stated by you.

I have a PPF account in India opened in 1997.Prior to coming to Canada as a PR in 2004, I did not close my account. I am aware of I cannot invest anymore in my PPF account.

1.How to close my account?

PPF Account normally runs for a fixed term and closure before that term is not permissible. You may not be able to contribute to that account. Just approach the banker for details.

2.What are the options of getting back my money back?

Once closed, the proceeds may be credited to NRO Account and later repatriated.

I would like to find out about the legal options for me as a US/Irish citizen to buy a house in India, to be used as a vacation home.

It is not known whether you a NRI or Person of Indian origin. I am assuming you are not. Then, as foreign national you cannot buy a house in India.

However, if you are NRI / PIO then you are permitted to buy a house in India, subject to compliance with certain procedures.

I am planning to open a FCNR account; my purpose is to buy a property in India. I also plan to sell the property as soon as possible if I get a profit. By doing so, will I be able to repatriate the whole amount back to USA? Will appreciate your legal advise on this.

You may open NRE Account. You can buy property (other than agricultural / plantation/ farm house), since you are NRI or PIO. On sale, you are allowed to repatriate only up to the extent of foreign exchange utilised for acquisition of such property

I am an NRI currently resident in USA. My question is if I want to invest in Indian secondary market through my NRE account then what is repatriable and what is not? Would it be only the profit or the original investment? I have been searching for this on Internet and I haven't found satisfactory answer for that. In fact most of the online trading companies don't offer services to only USA-based NRIs. I don't know the reason, though. What about taxes on such transactions?

NRIs are permitted to invest in recognised stock exchanges through registered brokers. For rest of the procedures you need to contact registered brokers of such stock exchange only. Profits are permitted to be repatriated. Profits in case of securities held for more than a year are tax exempt; in case of stocks held for a period of under a year, short-term capital gains tax (at 10 per cent) and surcharge will be applicable.

I have share certificates of Indian cos. I have not dematerialised them. Now I have become US citizen. What to do to sell these shares? Can I invest in Indian share market through online trading?

NRIs are given general permission to buy & sell shares in recognised Stock Exchanges, through registered brokers (not through on-line trading mechanism). For procedures, you may contact any broker in recognised stock exchanges. You may sell your shares, if you so desire.

Being an NRI, can I bring to USA the proceeds from sale of real estate given to me by my parents?

Yes. In terms of the Regulation, assets acquired by an NRI out of inheritance / legacy can be remitted out of India on production of documentary evidence to establish that the assets have been acquired by inheritance/legacy.

I am a Bangladeshi/Canadian citizen (dual). I was born in Bangladesh in 1944 (which at time was India). I would like to purchase flat or house in India. I hold Canadian passport at the moment. Would I be able to buy land or flat in India (Kolkata)?

No. You are a foreign national and not a Person of Indian Origin (PIO). PIOs are individuals not being a citizen of Bangladesh. As such, as a foreign national, unless you obtain a prior permission from RBI, you cannot purchase any immovable property in India.

As an NRI, is it possible for me to invest in fixed deposit instruments of Indian corporates? If yes, can it be done online?

Yes, it is possible for you to invest in deposits of Indian companies, subject to number of conditions. Those conditions are to be complied with by the Company accepting such deposits. Please note that the interest payable on such deposits shall be in conformity with directions issued by the RBI.

I am Indian born and living in India. I want to purchase property in Australia or USA. Can I invest in property overseas? Or can I buy a business in these countries? Do I need RBI permissions? I want to get EB5 visa of USA in which I gave to show 2.20 crore Indian rupees. Do I need RBI permission?

Resident individuals are permitted to remit up to $ 25,000 per calendar year for any purpose, including for acquiring immovable property outside India. Under this scheme you can buy property in USA. Buying business outside India depends on what your business in India is about and its networth. I need some more information here. Declaration by itself does not need RBI permission.

My husband and me have been living in UK for last 2 years. When can I buy a property in the UK and what are the terms and conditions?

You are entitled to buy property in UK as resident of UK as per local laws.

I am an NRI and I want to buy a property in India, which belongs to another NRI. Is it legally correct to pay the sale amount here in foreign currency to the seller and pay only the registration cost in India with the amount drawn from NRE account?

Yes, as long as you pay stamp duty, and the seller pays income tax, if any, on the property. I am assuming the funds are repatriable for the seller in terms of Exchange control laws.

I am working for a company wherein 90% of the shares are with US MNC and the remaining 10% shares in the hands of Indian Corporate. US MNC wants to purchase the 10% shares from the Indian Company, who is also willing to do so. Please let me know the formalities to be complied with as per FEMA.

Indian company (resident) is selling to a non-resident. With proper valuation of shares you may approach bankers for necessary procedures, as from October 2004, the procedures are delegated to Bankers, subject to complying with certain conditions.

I am US permanent resident. If I book a residential property in India, make the down payment/booking costs etc., wait for it to be allotted, constructed and delivered to me and sell it soon after it is delivered, how will I be able to repatriate the sale proceeds to the US? Will I have to put the sale proceeds in an NRO account and wait 10 years? Alternatively, if I was to wait 10 years and sell it, would I then be able to repatriate the entire sale amount immediately?

I am assuming you are a Person of Indian origin. You are entitled to buy residential property in India, using foreign exchange, so that they can be repatriated later, up to foreign exchange utilised for property acquisition only. Waiting for 10 years is needed if only you use rupee resources.

I am a US citizen of Indian origin. I have some money in India in bank savings accounts. These accounts were opened and funded with my earnings when I worked in India. I want to repatriate some of that money to the USA to my bank account here. Are there any restrictions on this? What is the best way to do this?

As non-resident you are permitted to open an NRO Account, into which these legitimate funds can be deposited. Thereafter, you may seek repatriation of your funds for bonafide purposes from that account.

Can a British citizen buy residential property in Bombay and what are the legalities involved?

I am assuming you are presently a British citizen, but a Person of Indian Origin (meaning at any point of time you were an Indian citizen or any your parents were Indian Citizens). As a Person of Indian Origin you can buy a residential property in Bombay, subject to complying with property law requirements of the State of Maharashtra. From the Exchange control law point of view, you have to fund the property acquisition only through foreign exchange remitted into India or by debit to your NRE Account.

In case you are not a Person of Indian origin, and only a British Citizen then you are not permitted to buy Immovable property in India.

I am permanent resident of USA. My father has a joint property in India (he lives in the same house currently). My uncle, who owns half the property, has offered to sell it to my father. I am planning to provide the required funds to my father for this purchase. My questions:

1. If my father sells this property after 3-4 years, will I be able to repatriate the funds I invested? What documents are required for this? (I am assuming that I will be able to repatriate amount that I provided to my father)

It would be lot easier for you to purchase your uncle's share and then repatriate on sale later, rather than to fund your father. Then you have to either treat such funds provided to your father as gift or as loan. Thereafter, the property would become your father's own, and you can claim only your share of inheritance. Instead if you directly co-own your share, and remit the purchase money in foreign exchange or debit to NRE Account, then later you can seek repatriation up to foreign exchange used for property purchase.

2. If I do above, can the amount be treated as a gift to my father? Any limit on the amount I can gift?

No limit. But this is a round about way of doing the transaction. Unless there are compelling reasons to do so, these should be avoided.

3. Is it simpler choice for me to have this partial property be bought on my name?

Yes. Refer to answer to Query # 1 above.

I am wondering whether the RBI had any sort of policies that required NREs to earn a zero-interest rate, in the event of deposits being closed prematurely. Or is there was some sort of implicit tax? The policy does not have to be intact at present. I'm more interested on whether there was ever a policy of this sort.

RBI interest rate policy is not the subject matter of this advisory services. However, generally if the deposits are closed prematurely then there is a penal levy, which is normally the rate of interest earned by the term deposit for which the deposit had run, minus a short deduction.

I have an RCA (NRO) account that I created with Citibank before moving from US to India. I have relocated permanently to India in May 2005 after living abroad for 14 years

1. How long can I continue to operate the RCA (Rupee checking account) NRO account?

Now that you are a Resident, you should designate your account in to regular resident account only.

2. Should I convert my NRO account to RFC account?

It is advisable to re-designate your account into regular resident account.

3. Can I continue transferring dollar funds from US bank accounts to this RFC or NRO account?

As non-resident you are permitted to open an NRO Account, into which these legitimate funds can be deposited. Thereafter, you may seek repatriation of your funds for bonafide purposes from that account.

Can the proceeds of property sale in India be transferred abroad or can it be converted in foreign currency account & retained in India by NRI/PIO?

Yes. The sale proceeds can be repatriated, up to foreign exchange acquired for property purchase. Alternatively, you may deposit the sale proceeds in any of your non-resident account, for remittance later when you desire.

I can purchase property in India as NRI and could even open accounts as an NRI. Can or will my Indian friend be allowed to buy property in UK or open an account with UK bank? If so what are the procedures?

Your Indian friend is a resident, I suppose. Up to $ 25, 000 he is allowed to remit outside India, for any purposes, including property purchase abroad. However, opening account in a foreign bank is permitted for residents only for very limited purposes.

Do I need to take permission from the RBI for transferring my present shares in the ordinary Demat account to the NRI demat account? What's the procedure?

No. Under the Exchange control laws, NRIs are permitted to purchase / sell shares. The procedures are left to registered stockbrokers in recognised Stock Exchanges. Therefore, you may contact your broker for needful.

Situation pertains to a person who is currently NRI, and is trying to get her shares dematerialised. Shares that were bought when she was a Resident would have to be/get linked to NRO. However, if Bonus shares were issued (and at that time, she had become an NRI/foreign citizen), then can the shares be considered in NR status, and hence linked to NRE account. If so, what is the process to get that done? The reason of query - to get the funds repatriated. Under both situations, (i.e. NR or R status), once the shares are dematerialised and sold, how can funds be repatriated?

Repatriation of sale proceeds (subject to taxes as applicable) is permissible under the foreign exchange law. NRIs are permitted to purchase / sell shares, and, as such there is no issue in sale and repatriation. Assuming that you were resident at some point of time, even then repatriation of sale proceeds is permitted to non-residents, who purchased any securities (shares in this case) at a time while they were residents. You may approach your bankers for necessary compliance with procedures for repatriation.

I recently got married to a US citizen. She is moving to Chennai to live with me. She has some money abroad, which she wants to bring into India. She is also a PIO. Later, she wants to invest some of this money into a running business of a partnership concern and offer some of this as a soft loan to her family. Would this be allowed? Are there any other issues that need to be addressed?

Once your wife, a PIO at present, wants to live with you at Chennai, her status becomes Resident under the Foreign Exchange Management Act. I am assuming on facts, you wife does not need repatriation of investment since she is going to be at Chennai for good. Both investment in partnership firm and loan, as long as they are not sought to be repatriated outside India, there are no issues.

My wife and I are Indian born and recently became Australian citizens and have got our Indian Passports cancelled, but will apply for dual citizenship. We are planning to buy land in India and have requested my brother who is applying for a personal loan (using our home in India, built by my late father, but now in my brother's and my name as security), to provide us with the necessary money to buy the land and we will repay our part of the loan to my brother. Is there a problem with this kind of dealing in future? As NRIs will there be any problems in registering the land in our name, since we have not actually taken the loan, but have paid for it through my brother's loan? All the repayments for the loan will directly go to my brother's account in India. Please advice.

Your status is 'Person of Indian Origin' (PIO). The law permits investment in immovable property by a PIO. I assume that the land is not agricultural / plantation / farm land. If this so, then the law requires the acquirer (that is PIO) to fund the same in foreign exchange by direct remittance from abroad or by debit to NRE Account. Since you are in any case proposing to remit foreign exchange, it is preferable that you remit foreign exchange to buy your portion of land. Registering the land, as a co-owner in a land by a PIO is not a problem, as law allows the same. Repayment of loan to your brother's Account will make the case difficult for repatriation later, and this course is not advisable.

Can the income earned out of a sale of a property inherited by a non-resident Indian be transferred abroad? Or converted in foreign currency? Or deposited in an NRE account? What if the land is partly agricultural?

Yes. The sale proceeds of immovable property (not being agricultural / plantation / farm house) inherited are repatriable up to US $ 100,000 per calendar year. The same can also be deposited into NRE Account.

The simple answer to the last part of your question is that to the extent it is agricultural land, no repatriation is allowed; balance part will be allowed repatriation.

Alternatively, you may approach bankers for "Remittance of assets" as permitted by Circular 67 of 13-01-2003 for repatriation of full amount, where no such distinction (of agricultural / non-agricultural is specified).

I am a Nepalese citizen working in India as a diplomat. Can I buy an apartment or house in Delhi?

Subject to clearance from government of India, Ministry of External Affairs and the condition that consideration for acquisition of apartment or house in Delhi is paid out of funds remitted from abroad through banking channel, you can purchase the house.

I am permanently returning to India. I have an Indian Rs. NRE A/C and NRO A/C, I understand this should be converted to RFC A/C. My only source of income would be from Shares in American market. Where should such funds be transferred? Please advise.

You need to designate your accounts into regular resident account as per regulation, once you come back to India. All income earned abroad could be disclosed to bankers and be remitted into India through banking channel.

My wife and I are NRIs based in USA. In August of 2004 we purchased a piece of land (non agricultural) in Hyderabad, India. The land was purchased in my wife's name and the payment was made by a demand draft out of "our" joint NRE account. I have a few questions regarding this matter:

a) The registration was done while my wife was physically in the USA. The documents were sent to her and she finger printed and sent it back. In the registration deed the address mentioned was our USA address. Was the procedure conducted in adherence to law? Do we need to inform RBI about the same?

As for foreign exchange law is concerned, based on information given, you have adhered to law. You are entitled to purchase property (non-agricultural) using funds from NRE Account. Therefore, it is in order. However, you have to check with property lawyer in the State, as to conformity with registration procedures of the State.

b) Can we construct an apartment complex (residential/commercial) on the land and sell/rent them out?

Yes. You can as personal property, not as a business proposition. By business proposition it is meant you cannot go on be buying and selling Real estate, but use the same for your personal purposes, which includes constructing superstructure and selling or renting it.

c) Can we build a house for our own living purposes?

Yes. You can.

d) Can my wife gift the land to me (an NRI)?

Yes. Subject to local registration procedure.

e) If she can gift the land to me what is the procedure? Does the land require to be re-registered with the state in my name and I will have to pay a fresh stamp duty? Is there a gift tax involved as well? Will my wife have to pay any taxes?

Gift is a 'transfer' of property and subject to procedures, including registration as may be prescribed by the State law on the subject.

I am a U.S. Citizen living in U.S. for more than 20 years. My Father's family owns farming land in India, which someday I will inherit. From what I can gather, I am not sure if I will be able to inherit the land or not since NRI cannot own any agricultural land. None of the documents specifically say whether or not it is possible to own by the means of inheritance an agricultural/farming land. Also, if that land is sold then can the proceeds be brought back to U.S.? Is this something where a special request can be made to RBI? Are there any restrictions on keeping it under my name in India once it is inherited?

As per the present dispensation, the following two legal positions are relevant given the facts of your case: -

One, In terms of Section 6 (5) you as a non-resident is permitted inherit from a resident 'any immovable property' situated in India. Second, in terms of Notification 97/2003, you are permitted to repatriate the sale proceeds of such assets acquired by way of inheritance. Both these, do not bar agricultural / farm land, although such restriction is clearly contained when non-resident Indians / Person of Indian Origin (PIO) 'acquire' (instead of inheriting) immovable property.

As and when, you inherit and intend to sell such inherited property the necessary legal procedure may be followed.

There are no restrictions under Foreign Exchange Law in your inheriting agricultural land and hold it without selling the same.

If I have a "domestic a/c" how do I convert it to NRO account once I am an NRI? What forms do I fill? I have accounts at Citibank, ICICI & SBI.

You are eligible legally to open NRO account, the moment you become NRI. The procedures are simple left to bankers. Just approach them with specific request and it shall be done.

I purchased agricultural land before I became an NRI. Now that I have become an NRI, what is to be done to regularise this land?

Under the provisions of FEMA, Non-resident can continue to hold any immovable property which they acquired while they were resident. So, there is no irregular act on your side to regularise.

I am an Indian Citizen. I bought a residential plot 4 years back and have sold it recently. I am now shifting to USA on an H1 visa. I want to transfer the money I got by selling the land, to my account in USA, which I will open once I reach there. Is it allowed? The property I sold was not a 10-year-old property. Is that ok?

Yes. You may approach your banker to remit your assets (which could be deposit with a bank or sale proceeds of immovable property) in accordance with the Foreign Exchange Management (Remittance of Assets) Regulations, 2000.

It is arguable that under Section 6 (5) of FEMA, you are entitled to transfer the properties that your acquired while you were a resident. Under this section, there is requirement for holding the property for 10 years. Section 6 (5) permits non-residents to transfer the properties acquired by them while they were residents.

My brother and I will someday inherit my parents' financial assets and house - they are Indian residents and we are NRIs. They presently own two properties - one is in the process of being sold, shares, fixed deposits, PPF, Post Office Accounts and Mutual Funds. a) They plan to invest the proceeds of the property sale in NABARD bonds to avoid paying taxes for a period. Alternatively, can they remit the funds to the US and hold the money in a US bank account in their name? b) Half the assets are held in my mother's name with my father as the second name and either my brother or me as the nominee. Is this legally ok? Is it Ok from inheriting point of view? Can the funds be remitted to us when we inherit? c) My brother and I jointly own a flat - can we remit the proceeds from its sale to the US? We have held it for over 10 years, but don't really have any proof that we remitted the money from here as we just gave cash to my parents over time to invest for us.

The queries are too general and a number of them are also mixed. However, at this point of time the following is the answer on the three issues (i) inheritance & remittance of assets on inheritance (ii) remittance and holding the proceeds in US and (iii) remittance of assets held for more than 10 years

(i) Inheritance & remittance of assets on inheritance: Under Foreign exchange law, inheritance by non-resident is permissible for any assets. Remittance of inherited assets on their sale is also permissible freely through bankers.
(ii) Remittance and holding the proceeds in US. Once to avoid capital gains tax you need to deposit in India, not depositing in that account would visit your parents with Capital Gains Tax. Also it is preferable to remit later as inherited assets where limits are large. If they want to remit now they, as residents, have limited sources where they can seek remittance to you.
(iii) Remittance of sale proceeds of immovable property held for more than 10 years. Yes, it is possible in terms of A.P (Dir Series) Circular # 62 of January 31, 2004 (In Annexure Sub-paragraph E). You do not need any proof of foreign exchange remittance to India, as even rupee investment is okay, under this circular for remittance.

I have few questions about my NRE FD account, which I opened in Jan 2002 with SBI while working on H1B at Los Angeles, USA. After that my visa got over in April 2002 and I came back to India and living as resident since then. My NRE FD will mature in 2012, but now I am going back to USA this year on emigrant visa (green card), and I do not want to repatriate the NRE FD now as it is attracting good interest (9.5%).

a) My question is, can I buy dollars from the loan I can get from the bank after hypothecating this NRE FD?

Bankers are given certain directions, which permit granting loans against these deposits. However, the loans can be used only for specific purposes such as, permitted business (other than agricultural / real estate), FDI in India, or acquiring home in India, and not for buying dollars.

b) What if I am unable to repay this loan money to the bank before it's maturity(year 2012) will the bank consume the loan out of this NRE FD after the maturity and pay me the balance remaining amount in rupees or dollars ?

It is general banking that if the loan against deposit is not repaid, the deposit will be liquidated against dues. The balance, if any, may be paid in dollars, if you are then in US.

c) Is there any RBI regulation on this issue, i.e. loan against NRE FD and buying dollars from the loan money?

Yes. The Notification No.FEMA 5/2000 - RB dated 3rd May 2000, read with Schedule I, gives the relevant regulation.

A Foreign company established a Branch in India according to RBI norms. It purchased a property to set up the branch office. The property, which the company purchased for branch office, was sold to company by its Managing Director, an NRI with Indian passport, and payment was made and received outside India at company's head office. The property was duly registered in India. As the property exists in India and the registration of property in name of branch office is done in India but the payment is received and paid outside India in country where the Head office exists is that transaction valid considering FEMA rules? What formalities are required in Indian context?

Follow-up queries

1. The payment has already been made and received outside India and the property has been registered in company's Branch office name in India. Now the said form that has to be filed within 90days of acquisition of property has to be filed. Now while filing the form would there be any problem? What can be done as remedial Action as the payments has been made and received outside India (Which I suppose is not in line with FEMA) and property has been registered in company's name in New Delhi (India)?

2. If the transaction remains as it is with no repatriation of money back to India are there any penalties involved? If the said form IPI is filed with RBI without any change in circumstances what maximum penalties can RBI impose?

Branch can acquire immovable property in India, for carrying on permitted business activity only. Based on information, it is assumed that the Branch activity is permitted in India. The details of acquisition are to be declared in Form IPI to RBI Mumbai. Since no part of consideration was remitted into India for purchase in foreign exchange, later if and when the Branch sells the property, RBI may not allow the Capital profits to be repatriated in foreign exchange. While this is from the exchange control aspect, there may be tax aspects to NRI seller, which needs attention.

Response to follow-up queries

1. Now that you have already completed the Transaction, RBI may require repatriating the money immediately. Given the circumstances, It is advisable to forthwith bring in the sale consideration in foreign exchange into India. As for the form is concerned, the Branch shall comply with the regulation by filing the same.

2. Receiving money abroad, by a resident, is a violation of law, and, as such, the contravention by itself could attract a maximum penalty of three times the amount contravened. This may involve follow up by tax authorities as well, and, therefore, it is not advisable to continue the violation, looking at the maximum ceiling limits of penalties under the law.

I am an NRI (US citizen) living in USA, and hold an NRO account with Citibank.
My question is as follows:
Can an NRI simply transfer funds from his NRO account to his US bank account besides the repatriation (education, sale of real-estate assets etc) allowed by RBI?

Balances in NRO Accounts are not eligible to be remitted outside India, without RBI's general or special permission. In that sense, it is not like any other bank account, where you can transfer your moneys at your will. However, over the years, for bonafide purposes and for a number of specific purposes, the remittances are greatly liberalised.

I have got a query pertaining to the eligibility to the PIO-card scheme, being a precondition to purchasing property in India.
Born in Mumbai of German parents in 1956 and resident there till 1959, I was eligible to choose Indian nationality until the age of 21. How about my status of PIO? In fact it reads in the Ministry of Home Affairs eligibility parametres as follows:

"Any person:

who 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 an permanently resident in India as defined in the Government of India Act, 1935 and other territories that became part of India thereafter provided neither was at any time a citizen of any country as may be specified by Central Government from time to time;"
(Notification as of 19th July, 2002)

Can you kindly help me clarify this issue?

I think the extraction of the eligibility parameter is not accurate (see underlined phrase). Clearly, if any of the three generations specified (that is, you or any of your parents /grand parents) were Indian Passport holder Or was a citizen of India, then you are eligible to apply for PIO card. Are you an Indian passport holder any time? Or, alternatively, is any of your parents / grand parents chose to obtain Indian passport at any time? If answer is yes, then you are eligible to apply for PIO card. Not otherwise.

I had a PPF account, which I opened 2 years back. I want to know the new rules regarding withdrawal of money from my PPF account. Or in other words, when can I withdraw some money from my account and what is the procedure for that?

As a non-resident, under the Exchange Control regulations, you are entitled to remit outside India balances in PPF account, subject to the rules of operating PPF Account.

As for as withdrawal of PPF Account is concerned, you may consult your bank with whom you have PPF Account.

I am on H1 visa in US and have invested in RBI 8% taxable bonds in India in the year 2004. I recently read somewhere that NRIs are not eligible for buying the same. If this is true, then what will happen to the money that I have invested? The agent through whom I bought the bonds knew of my NRI status and never informed me of the fact that NRIs cannot buy them.

Under the foreign exchange law, Investments (not done in accordance with the Regulations) are not eligible for repatriation. While this is the legal situation, you must ask your investment advisor, as to the procedure for liquidating the money and crediting the same to your account.

My husband and myself are NRIs residing in the UAE. We would like to purchase property in India by taking a 5-year bank loan through Canara Bank. We hold NRE accounts with Canara Bank. In future, if we sell this property, we would like to know if the money will be repatriable abroad and what are the procedures to ensure that we can repatriate our money in event of our selling? Is there any restriction on the amount that can be repatriated?

If the Bank is approved by National Housing Bank, they are permitted to provide Housing loans to NRIs. To the extent the loans are repaid by you out of foreign inward remittances received in India through normal banking channel or by debit to your NRE Account, the sale proceeds of property is repatriable. Thus, the procedure is ensure that you bring in foreign exchange through bank or debit NRE Account for repayment. Limit is up to such remittance or debit for repayment in foreign exchange only.

I am a NRI. Presently I am in U.S. Shortly I am to get money by sale of my house in Chennai. After investing the capital gains amount in notified Bonds for the notified period can I repatriate the balance sale proceeds to U.S. to meet my medical expenses? At the end of the notified period can I transfer the balance of the sale proceeds? Can my declaration alone be sufficient or is it necessary to produce an Auditor's Certificate even if all the transactions are through Banking Channels?

In the absence of details as to nature of house property (acquired by you as resident or non-resident, or legacy etc) I am assuming that the house property was acquired by you as per the Regulations in this regard.

First, if you deposit the Sale proceeds of House into your NRO account, remittance from out of that Account for medical purposes is permissible. The balance sale proceeds can also be repatriated.

Auditor's Certificate is a matter procedural requirement insisted by bankers to ensure whether tax has been paid or exempted and you have to prove that the moneys deposited are out of sale of property.

I wish to buy property in Dubai. Kindly advice on the formalities on the transfer of funds.

It is not known whether you are a resident or non-resident.

If you are a resident in India, then you can acquire property only out of foreign exchange held in Resident Foreign Currency Account (RFC), maintained in accordance with the regulation. Alternatively, you may use the liberalised remittance scheme of US $ 25,000 per calendar year for funding purchase of immovable property. If you are a non-resident and desire to acquire a property outside India then our exchange control laws do not govern them.

I am a British citizen with a British passport. An Indian colleague who lives in Delhi has bought some land in Madhya Pradesh. He has asked me to invest some money into developing a tourism complex. I would have a 30% share. Am I allowed to do this? What are the legal implications?

Hotel & Tourism is a permitted activity for Foreign Direct Investment. However, you have to invest in a limited company if you would like to carry on the business, in consultation with a Counsel for compliances and related formalities.

I would be greatly obliged if you could briefly explain the difference between NRE and NRO accounts and their individual benefits and disadvantages. I would also like to know which would you prefer if given a choice.

NRE Account is a foreign currency Account, while NRO is a rupee account. There are no generalised 'benefits' or 'advantages' in each, except in NRO Account the repatriation has been made lot simpler with higher ceiling limits. You may open both the accounts. For understanding the accounts / operation you may seek from banker the permitted debits and credits in these accounts. If you have repatriable income from India, it is advisable that you open NRO Account.

I want to buy a flat in Bangalore. I am an Indian citizen living in the US. I don't have any NRI account, but I have Citibank a/c. What is the procedure to avail home loans?

Granting home loans for house in India by NRIs is allowed by certain banks. For procedures you may contact your banker. You may open NRE Account for repayment or send foreign exchange through normal banking channel for repayment of loans in availed in India.

Can an Indian citizen, who is not an NRI, buy property abroad?

A resident Indian can buy property abroad only up to using liberalised foreign exchange facility up to $ 25,000 or by using foreign exchange held in Resident Foreign Currency account maintained in accordance with regulations in this regard.

Since one year I am in USA. I have ESOP (employee stock options). I do not have NRI/NRE account in India. Now that I have decided to sell stocks, I understand that I need to have an NRE account and Demat account of NRE status. Is there a list of banks in India offering this facility? Since I am in USA, can I do this online or do I need to go back to India to do this?

You can contact any registered broker for these procedures, as such procedures are not governed by foreign exchange law. You need not come to India for this. You may give instructions from abroad to your broker who should be able to do the Transactions, as instructed.

I am a US citizen of Indian origin working in India. Suppose I have an Overseas Citizen of India certificate or a PIO card, then

a. Am I eligible to remit my earnings in rupees to US?

If your family is abroad, and for that purpose you need to remit money you can do so. Otherwise, as a resident (since you are working in India, you are a resident in law) you can only remit foreign exchange as applicable to any other resident.

b. If yes, then is there any ceiling on the amount that I can remit?

Residents can remit foreign exchange for educational, medical purposes up to US $ 100,000

c. What's the procedure to do so? Does it require any complex procedures that include RBI involvement?

The procedure is that you need to approach your banker and comply with simple formalities, as let known to you by them. You need not go through RBI.

I understand that NRIs cannot invest in bearer securities like Indira Vikas Patra. Can I know the reason for the same?

It is policy decision of the Government of India, by which certain securities are barred from investment by NRIs. Most countries do that. One reason could be the arbitrage of interest on these instruments.

I am an NRI living in the Gulf. I have earnings from India, and through the sale of property in India, I have deposited the money in NRO account in India. From this NRO proceeds I have purchased an Agricultural property in India. Is it legal? What is the implication if any, and if so how could I regularize it? No money or proceeds earned from abroad is invested in this purchase. Please advice.

NRIs are not permitted to buy agricultural land in India. However, having invested from NRO account, you should not repatriate the funds by sale or transfer otherwise, and apply to RBI for regularisation. RBI may impose a condition that you should not repatriate the funds abroad on sale of such land.

I am a British citizen with a PIO card. I am now relocating back to India permanently. Can I invest in the RBI tax relief bonds?

YES, but only after you become a Resident in India (that is when you relocate permanently to India).

I'm a Canadian citizen by birth and I have had all my education in India. Now, I have got admission into a University in UK and I want to apply for education loans. I hold a PIO card and my parents also working in India. I want to know am I eligible for an education loan, which I need very badly for pursuing my education. Does the PIO card entitle me for an education loan?

Exchange control laws do not bar the bankers from considering genuine requests from borrowers who are NRIs / PIOs. However, if you hold foreign passport (as you are a foreign citizen, even though you are a PIO), bankers may be apprehensive of lending, as legal enforcement, if any, is difficult against foreign national in our legal system.

I am a US Citizen of Indian Origin I would like to open a NRI account to deposit about 5 lakhs of Indian Rupees. Interest that I earn on that amount should be transferred to my mother's account every month. Is it possible to operate the above with NRI account? What type of Account it should be? Please send me the details if any such type of account available.

NRIs / PIOs can open NRO / NRE account, which are in the form of savings, recurring or Term deposit Account. You may open a NRO Account with Bank. You may repatriate the interest income earned. For details of other facilities you may contact your Indian banker who will be able to tell you the compliance procedures and meet your requirement.

I am currently working in Japan since two years and now buying a new flat in India. I have couple of queries -

a) Can I make my father who is POA, as a co-owner of that flat? If yes, are there any disadvantages in terms of RBI rules, taxation etc?

Exchange control law does not govern Power of Attorney (POA). It is governed by property law and registration procedures in a State. Normally, the POA should be registered first, and, thereafter, the registered POA can comply with the procedures prescribed in law for the owner. The property can be jointly owned with a resident.

b) What if I use some amount from my fathers account to pay builders like booking charges, stamp/duty registration charges, home loan banks processing fees etc? Will it be a problem while submitting IPI7 form at RBI, Mumbai?

If your father (in the absence of information, I am assuming he is a resident) is a rupee account then, repatriation of sale proceeds may be restricted later when you sell property, as such repatriation is allowed only up to foreign exchange utilised for acquisition. There is no IPI 7 form now at all.

c) If I transfer some money to my fathers account through remittances from Japan, can he use that amount for paying some charges as mentioned above where property will on my name?

Yes, any foreign exchange remitted through normal banking channel is fine. The regulation only says that the property shall be acquired in free foreign exchange remitted into India. If you do not have an account, you can remit to your father's account, and register the property in your name. But, you should preserve all the records evidencing that property belongs to you and that foreign exchange was used to acquire the property. If you do this, later repatriation may not be an issue.

Creation of security by a non-resident in favour of resident is not permissible without RBI approval. However, will an agreement between a non-resident, resident and depositary restricting the resident to transfer shares without joint instructions from the non-resident amount to creation of guarantee/security and will therefore require RBI Approval?

First any restriction on free transfer of shares is bad in law. Second, such a restriction is virtually a surety by a resident for the underlying Transaction covered by the agreement and hence would need RBI approval.

I wish to sell my inheritance property (farm in Punjab). Do I need RBI's permission?

The restriction expressly mentioned for acquisition of farmland is not contained in transfer (or sale) of farmland, acquired out of inheritance. Since this is an arguable position, the safe route would be to ask your bankers for repatriation of sale proceeds arising out of sale of farmland, before doing the Transaction.

After returning from Gulf how long can I have NRI status in India?

Normally, the law states that if a person resides in India, during the preceding financial year, for more than 182 days he is a resident. But, if you come to India for employment or doing business or other circumstances indicating your intention to stay in India for uncertain period, then you will be a Resident even before the period of 182 days.

Can I buy the residential flat in my son's name who is 18 and a PIO but currently living in India? Also can I add my daughter's name, who is 17 and a PIO holder but living in the US now, and my name but send a power of attorney to my dad who is also a US citizen?

Yes. Exchange Control law does not govern Power of Attorney and registration procedures. They are covered by property law and registration procedures. But, NRI / PIO can individually or jointly own property in India. The only thing you should take care is to buy the property using foreign exchange remitted into India or by debit to your NRE account, if you have one.

Follow-up

My question would be is it possible to buy the property by an 18-year-old male? Can you please explain debit to NRE account? Does it mean I can write a check from NRE account?

Yes. Foreign exchange law does not govern in whose name it is bought, as long foreign exchange is used for buying it. The 18-year son may have to prove source, if asked by authorities later and, only he can repatriate the sale proceeds, as the property is in his name.

`Debit' to NRE Account means making payment from out of such a/c.

I want to open an account in India, which can be used to trade in mutual funds in Indian market.

NRIs are permitted to purchase / sell mutual funds in India. But, for procedures you may have to contact a registered broker in any of recognized stock exchange in India. You may open an NRE Account in India.

I am an NRI living in US. I was issued stock options of an Indian company while I was in India and would like to convert those into repatriable shares now and sell those. I would like to get the sales proceeds into US dollars. Is this possible? What could be the process?

Stock options can be sold and proceeds repatriated, subject to applicable taxes. You may get in touch with registered broker, complete the transaction and contact the bankers for remitting money.

I am an US citizen living in America. There is an opportunity for me to start a service business with some Indian friends (living in India) in India. I am wondering how I can get the profit repatriated to America. Does it make a difference on profit repatriation if I invest in cash or not?

Such questions depend on lot of details. However, in general terms, profits of business are repatriable. You may invest in shares of Indian company. Company form of organisation is preferable. I do not understand what do you mean by "investing in cash or not".

Follow-up:

My Indian friends and I were planning to start a business together. They will provide cash and I will provide technical expertise. The shares or ownership of the company yet need to be determined. I am wondering how I can get my share of profit repatriated to America. You said repatriation depends on lots of details. Will you please tell me some important details I should look into before I jump in?

You may repatriate profits of Indian company as dividend. You may also repatriate Technical know how fee, if that may be appropriate. The relevant factors could be (a) extent of ownership / control (b) nature of income sought to be repatriated, as dividend or know how fee (c) the obligations of parties (d) time and mode of milestone payments (e) other contract details.

I need to know whether we can remit money from corporate account in USA to corporate account in India, in which currency money is remitted, what are the charges to remitter and receiving company, maximum amount per transaction, any limit on number of transactions per day and also per month?

Remitting money into India is freely permitted, and, the same shall be remitted through normal banking channel and, the receiving company shall preserve the Foreign Inward Remittance Certificate (FIRC) obtained from bank. Remittance shall be made in permitted currency. The rest of the questions are procedures with bankers and you may contact your bankers for these clarifications.

I have been employed in the UK from the 26th of Jan 2005 and will be there up to the 23rd of Sept 2005. The money I earn goes to a UK bank account. Both the financial years ending March 2005 and 2006, I shall not be resident to the UK for tax purposes. Can I leave behind the money I have earned in my foreign bank account?

Can I use this money to pay the downpayment towards a mortgage to buy a freehold property? I intend to pay for the mortgage by letting it out on rent. If I am not able to generate sufficient rent, can I remit funds from India to pay such a mortgage? If I cannot remit such funds from India, can I receive payments for freelance services that I anticipate shall arise within the UK in my UK bank account and use these funds to pay off the mortgage? What is the limit on holding foreign currency in a foreign bank account?

The limited information is insufficient to accurately answer the query. Have you gone to UK for employment? After 23-9-2005, are going to come back to India for employment or business or for uncertain period? Your residential status will determine the answer. Assuming that you are a resident, you can open an account and hold foreign currency earned abroad, but repatriate them on your return.

While you are abroad, during your tenure, the property you buy can be funded from any source earned abroad. But we need more information about your residential status and your purpose of visit or stay abroad, and your plans post-September 23rd to answer further.

Follow-up query:

To make my status clear, I have been in the UK for employment between 26th Jan 2005 and 23rd September 2005. I shall be returning to India for employment. I shall be resident of India. For the above period I have earned in Sterling and the money is in a foreign account but I wish to retain the account, as I might have opportunity to work in the UK in the future, though not for certain. There is no document that can prove that I may have such opportunity to work. I am in the entertainment business and have an agent here who is actively looking for work for me here and so I wish to retain a bank account as it is very difficult to get one in the UK even if one has a job. I got this one as a special favour done by the bankers to my employer. Can I retain the account? Further, if I am bringing the money back to India, can I retain it in sterling in an EEFC account?

Given these full facts, in terms of Section 6 (4), a person resident in India (you will be a resident once you are back in India for good) is permitted to hold and own foreign currency that was acquired while such person was a Resident outside India (which you are presently by virtue of your employment in UK). Thus, you can retain the UK bank account, and leave the sterling earned there net of local taxes. Alternatively, you may bring in to India the moneys earned there, and later while you go to UK for employment, you can always open bank account, which I am surprised you are describing as 'difficult'. EEFC account may not be appropriate on the facts of your case.

I want to purchase an apartment in Kolkata and I made a partial payment in US Dollars and the rest I may pay from my NRE account or pay DD in US Dollars. If I sell my apartment in future, how can I convert Rupees to USD (1) the amount paid in USD and (2) the amount paid from NRE account? What documents do I need to save regarding this transaction?

As long as the purchase consideration is paid out of foreign exchange (either by remitting through normal banking channel or by paid from NRE Account) they are eligible for repatriation up to foreign exchange paid for acquisition. You should preserve the bank statements issued by them as proof for remittance of foreign exchange for acquisition of property.

Can I make donations to charitable organisations outside India?

Yes up to $ 5,000 per annum, through normal banking channel.

I am a US Citizen with a PIO card. I moved back to India in Oct 2004 and am residing in India since then. I work for a software company based in India. My salary is paid in rupees and is credited to a regular salary account.

1.In this scenario, what is my status for Tax purposes (NRI or Foreigner or Resident Indian)?

For tax purposes you will be treated as a resident Indian.

2. In this scenario, what is my status for buying property in India (NRI or Foreigner or Resident Indian)?

Under FEMA you are a resident, since you have taken up employment in India.

3.When I approached my bank and asked if I can open a NRE/NRO account, I was told I cannot do that, since I already have a resident rupee account. Is it true that I cannot have both resident and non-resident accounts? Is there an alternative or workarounds to this limitation?

Only non-residents are entitled to open NRE/NRO Account. You are a resident, and, as such you are not eligible to open NRE/NRO Account.

4. During the last 2 years, I have remitted US dollars to my rupee account as well rupee accounts of other people in India. That money has been used to acquire residential plots as well as to purchase commercial property in India. At some point when I liquidate these assets, I want to remit that portion of the sales proceeds, which is equivalent to the amount of US dollars that I originally transferred to India, back to US in US dollars. Is it possible? If so what are the steps I should take from now on to ensure I would be able to do this? Will there be a problem if there is no clear evidence that the US dollars that I remitted to India have actually been used to purchase land or commercial property? I might be able to provide copies of the sale deeds if that's what is required as documentation.

NRI/PIOs are eligible to repatriate the sale proceeds up to foreign exchange utilised for acquiring the immovable property. But, for this, you shall produce the bank statements or wire transfer particulars for remittance to bankers to convince them that the property is acquired out of foreign exchange remittance. Sale documentation may not be sufficient proof of remittance. But, now that you are a resident working here, why would you need repatriation facilities available for non-resident? Clarify.

5. Can I purchase residential/commercial property in India with funds (partly from the money I earn in India and part from the US dollars I earn in the U.S)?

Purchasing property is permissible. But, repatriation later may be restricted only to foreign exchange utilised for acquisition of immovable property.

I am engaged in Internet job of email reading where I am paid for reading email as well as to see there advertisement any person can join the program. It is open to all people around the world. I would be paid from the site and the payment would be made in US Dollar. How could I deposit it in my Indian bank account? Is there some formality that I have to go through or I can directly deposit into my account?

As the payment they send is through stormpay online account, from there I have to withdraw by demanding a cheque or even by Bank wire I can transfer earnings into India.
1) So am I allowed to have account in stormpay because initially site will send money in to my stormpay account from where I can withdraw in India? Do law and RBI permit to have so?
Reason behind that to have account in stormpay is that though the site from whom I am paid can send me a cheque, they send it by normal post and if cheque is not received by me or lost while in transit they do not take any responsibility. So I had taken account in stormpay, to which the site can transfer the money and I can withdraw the money from the stormpay account. Stormpay couriers the cheque to me and charges a fee for it.

Any legitimate / legal income earned from India, has to be repatriated through normal banking channel. Therefore, as long as you receive the remittance through banking channel, it is in order. The normal method is through wire transfer of banks or by cheque / DD etc. However, you may ask your banker in India about the new method "stormpay". If you preserve the Foreign Inward Remittance Certificate (FIRC) for inward remittance of foreign exchange, that would be useful for tax purposes.

I intend to open a NRO account with HSBC because I am buying a property. I will be receiving some cash help from my relatives (interest free), which I intend to put in the NRO account. I intend to repay this amount in 2 yrs time and also go abroad for further studies so kindly clarify whether I can send a wire transfer abroad from this account for studies and paying of the debt after 2 yrs.

Remittance for education expenses up to $ 100,000 is permissible. Repayment of debt is also permissible. However, if you buy a property, using both foreign exchange and also rupee, later, if you need repatriation on sale of such property, then you are allowed to repatriate only up to foreign exchange utilised for acquisition.

I am married to an Indian citizen recently. I am a US citizen. We have moved to Chennai. I hold money in accounts in HK, Mauritius and NY. I would like to move part of my money up to $1,500,000 to India to invest here. Do I have to inform RBI or pay taxes on it? Can they question why I want to bring in money or ask me to pay taxes on the same?

Remitting money in to India, earned abroad is legal. Investing such money depend on the nature of investment (business or property etc.). Incidentally, your stay (or visit) in India depends on your visa

I am an NRI working in Saudi Arabia for the last 12 years. During the last 12 months, I have purchased new Iraqi Dinars in hard currency with anticipated higher exchange rate upon listing on the international market. I am planning to move to India by next month. Can the new Iraqi Dinar currency be carried with me and be declared with Customs? I have +20 Million Dinars (around 25000 US$ Value at this moment)

The easier way is to remit through bank by wire transfer, instead of physically carrying the dollars. Remittance is perfectly legal. Bringing in dollars depends on customs rules, but you may have to declare them. At any rate, even if you bring in physically, still you need to remit the money into Bank.

I am an employee of foreign company, which has a branch in India. I participate in the ESPP program of the parent in USA for which I am making monthly contributions. These contributions are withheld from my paychecks. Do I have to remit this contribution physically out of India every month or can my company pass the credit to the parent through their internal control accounts in the books? Pls advise me with respect to the RBI regulations on this. I am a resident Indian.

ESPP, I assume is an abbreviation of Stock option. Assuming so, the Company from out of deductions from paycheck, can follow RBI regulations in this regard for allotment or vesting of stock in Employee Stock Option Schemes.

I recently acquired US citizenship, and also the PIO card. I currently live and work in India. I have agricultural land that I have inherited from both my parents. Can I continue to own these lands? Do I need to file any papers with any Indian government offices in this regard?

Owing inherited agricultural land does not need any compliance from your side.

Follow-up

I am thinking this will also apply to any property that I may inherit in the future. Is this correct?

Yes. You may hold, own currency, security or any immovable property situated in India, if such currency, security or immovable property is inherited from a person resident in India.

I am currently in Saudi Arabia and soon planning to move to US. How much US Dollars (maximum) can I carry as currency while returning to India from Saudi to be taken to US?

Beyond US $ 5,000 declaration should be made at Customs. However, you may remit money through normal banking channel to your NRO Account in India. If your relocation to US will be very soon, you may leave the money in Bank in Saudi itself and transfer from there to US, since as non-resident you are entitled to keep the moneys earned abroad.

I had put up a bail for my brother-in-law in the USA. He violated the bail and fled to India. I ended up paying $1.45 Million US dollars. Yes, the number of $ 1.45 Million is correct. Bail was for $ 1.25 Million and post-judgment interest was approx. $200k. I had to take legal action in India to recover the money. Court has ruled favorably and he will be paying the money. However, he will be paying in Indian Rupees. I am of Indian origin. Can I repatriate this money back in US dollars? There are plenty of certified documents confirming that the money was paid in US dollars and the judgment/settlement in Indian courts is against that. In fact all these documents were submitted to Indian courts and accepted by Indian courts.

Normally, on Court orders / execution we cannot answer based on the reading of the order or effect of the order by the beneficiary. There could be technicalities to be followed. Short of details, generally, in matters such as these, which are unique situations, all facts could be placed before RBI and special permission could be obtained for remittance of money, so that it becomes legal. Otherwise, the delay or lapses may be taken advantage of by the other party.

My friend wants to transfer all his funds to India in my name since he is residing in S.Africa. How it is possible?

Why would anybody like to transfer all his funds to a third party? Is it a gift? Remittance into India is no issue, as long as the remitted money is legal and comes through normal banking channel. You may have to preserve the Foreign Inward Remittance Certificate (FIRC) that will be issued by bankers.

I am an NRI from USA. I plan to buy a property (house) in India using the remittance from my NRE account with an Indian Bank. But the seller of the property wants cash, rather than a check or draft. Is this allowed? How does it affect the repatriation if I wanted to sell the property in five years? Can I take the money back to USA in dollars?

It will be a violation of law to pay cash. Do not entertain that at all. Further, under foreign exchange law, unless you acquire out of NRE Account (or foreign exchange remitted through normal banking route), repatriation will not be considered favourably. Therefore, pay him only in cheque.

About 2 years ago I went into an agreement to purchase a flat in Bangalore. I was then a NRI. The flat is near completion and registration is due very soon. Last year I took a US citizenship and also a PIO card. Is there anything I need to do specifically with respect to the possession of this flat? Primarily, this will be used by my mother to stay and on retirement I would like to live in this flat.

No. Nothing needs to be done on your getting US Citizenship.

I am NRI residing in Canada for last 7 years. I am selling my flat in Delhi that was purchased over 10 years ago. Please elaborate all the possible options available to me including repatriation of money to Canada, reinvestment in India in another house, plot etc. Can I reinvest the long-term capital gain at two places viz. part in newer house purchase and part in buying a plot?

Repatriation of sale proceeds of a property purchased 10 years ago is permissible as per exchange control regulations. As for re-investment is concerned, it is advisable to invest in foreign exchange or out of NRE Account, if you desire to repatriate sale proceeds of such new investment later. Acquisition of Plot (other than agricultural, plantation or farm land) is permissible. Here again, if you desire repatriation later, you should invest in a manner said above.

I want to be sure of my understanding on a real estate issue;
1. I am a US citizen and PIO
2. I desire to buy property in India from the proceeds of a remittance into India in $.
3. I am a little confused about the rule regarding the 'sale of the property'. If I profit on the sale of the property, I can only remit the amount I paid for the property. How is the profit (final price - original price) repatriated back to me?

Repatriation of sale proceeds is allowed only to the extent foreign exchange is utilised for acquiring the property purchased in accordance with the regulation. Sale proceeds, if any, in excess of foreign exchange utilised for acquiring the property, is not allowed repatriation. You are, however, permitted to retain that amount in India, subject to payment of income tax, if any.

I have been living in the UK since 2000. I have sent money regularly to India via wire transfers to my NRE account. My parents, who were given power of attorney to this NRE account, used this money to buy a property in Chennai. Now, I am planning to buy a house in London. Is it possible to sell that property, which is in my father's name, and transfer the money from India to UK? Also, please tell me the procedures involved.

Repatriation of sale proceeds of property acquired by NRI using foreign exchange is permissible up to foreign exchange utilised for acquisition. However, from the information given, the property is not in your name, but in your father's name. In which case legally the repatriation will be the sale proceeds of Resident's (your father's) property and, as such not permissible.

I am an NRI in the US. I have been granted ESOPs by my (India-based) company. I would like to exercise vested options, by using USD from an NRE account. At a future point, I want to be able to sell and repatriate funds to the US.

From reading your site, I didn't find an answer to the following questions:

1. Do I need a separate DMAT a/c that is linked to the NRE a/c that's used to fund the purchase?

Subject to the terms of ESOP, stocks under it are repatriable under exchange control law. DEMAT account is a separate procedure about which you will have to ascertain with brokers or your company.

2. Does the DMAT a/c and the NRE a/c need to be with the same Bank/Institution?

You have to ensure the procedure as applicable to your company with registered broker. However, there is no requirement that DEMAT a/c and NRE a/c should be with same banker only.

I have sent all the required paperwork to Mumbai for certificate from a CA for remittance to USA from my NRO account. Citibank will act as Authorised Dealer. Where do I present the papers for effecting transfer? Is it Citi in Mumbai or Citi in New York? The papers will be in Mumbai and I would like Citi Mumbai to effect the remittance.

Citi Bank Mumbai, being the banker in India will be the agency to deal with the Transaction.

What will be status of saving account held with banks before one acquires NRI status? Can an NRI issue checks from such account to transfer balance to NRO account? Is it possible to redesignate old resident saving account to NRO account?

Factually, there is no difference between "Savings A/c" and "NRO" A/c, which could continue as a savings or term deposit Account. It is only the status of a person changes. Before a person acquires NRI status, it is only resident regular savings account. You can designate the resident savings account into NRO account after giving proof of your status as non-resident to your bankers.

What is the time period required for an NRI to lose benefit of NRI status once he returns back to India but visa still valid to return abroad? Can he maintain a FCNR account once back in India? What are the general rules or regulation one should know to avoid any unlawful act due to ignorance?

Residential status is not dependent on visa. Time period is not relevant, once you come to India for staying for an uncertain period, or for employment or doing business in India. FCNR account may be continued for its term. You may inform bankers as to your true status after returning India, and nothing is to be afraid of ignorance, as long as you disclose the facts to your bankers.

I am a USA citizen (born in India). My father in law wants to buy a property and I am going to be a main (1st) applicant for the house and the loan. Do I need to notify any government agency in India? I want to know if that has effect on my yearly tax? Also do I need to notify to any agency in the USA?

You are a person of Indian origin by status (born in India, presently US Citizen). As such, you are entitled to buy property in India, either through foreign exchange remitted into India or by repaying loans taken in India, but repaid through foreign exchange inward remittance. I assume, when you state that you are going to be "1st applicant" for the house, you mean that you are going to purchase the property as a co-owner. There is no need to notify any government agency in India. U.S legal position needs to be ascertained through a counsel over there.

Follow-up

So if I get a loan from Indian bank in India (I am the main applicant for the loan), can I get property on someone's name (main owner) while I am going to be a 2nd owner of the property?

The exchange control law concerns itself only with ownership of property (through foreign exchange, either by direct remittance or by repayment of loan taken for acquiring the house). Such ownership could be single or jointly with others. As for loan funds are concerned, it is left to commercial dealings of a banker in India. Yes, you can be the joint applicant for loan as also the ownership of house. Still it is not clear what do you mean by stating "main applicant" and "main owner" for house.

I am a person of Indian origin currently holding US passport. I do not have PIO card. 1) Do I need a PIO card to buy property (Flat) in India or my old Indian passport is sufficient as a proof of Indian origin for registration 2) What are the documents required to prove my current remittances if I want to expatriate the money back in future from resale of the property?

There is no need for PIO card to enable you to buy property in India. As long as fact that you are PIO can be proved, it is okay. Inward remittances into your account with a bank through normal banking channel are enough to prove the foreign exchange remittance into the country. If you want, you may ask the banker to furnish the Foreign Inward Remittance Certificate (FIRC), as, documentary proof for foreign exchange remittance into India.

I am a NRI. I would like to buy a property at Bangalore. Later, if needed I will sell it and should be able repatriate sale proceeds in US Dollars. In the web some mentioned that I should do inward remittance of Foreign exchange through normal banking channels. What does it mean? Can I open NRE/NRO account and deposit the needed money to that account and I use that money to buy the property?

Yes, you may open an NRE/NRO Account and remit the foreign exchange through wire transfer into India. This is what is meant by foreign exchange remittance through normal banking channel.

I have a small start up company that I am a major stockholder. All of my funds get deposited in India. I have expenses in the US to generate business. How do I repatriate the monies to cover expenses? We are currently doing about $75K US / year in business and expect to grow to a $1M in revenue soon. Currently I am spending a lot of money out of pocket for travel and other expenses out of my own pocket. If I cannot repatriate funds, I am considering other options such as China. What should I do? I prefer to have the business grow in India but if I cannot take my money out its not worth it.

The query is too general to answer. Do you have the 'start up' company in US or in India? Why do you say all your funds get deposited in India? If you can give a little more specific details about your business structure, and nature of revenue streams in US and in India, then that would give me some options to answer accurately.

Follow-up

I have set up a corporation in US with manufacturing in India. The company is set up to perform Marketing in the US office and manufacturing is done in India. Most of my current Purchase Orders are initiated by the US customers and Purchase Orders are issued directly to the facility in India. The product is shipped from the facility in India to customers in the US and the company in India generates the invoices. I own 100% of the stock in the US firm and 90% stock in the Indian firm. I have given 10% the General Manger in India. The firm in India was originally set up with my mother who lives in India, as the major stockholder and I purchased the stock from her. My problem is that I incur expenses in the US for marketing and I am not sure how to repatriate the funds to cover some of my expenses.

Are the commissions based on Revenues generated or is there a limit to dollars that can be paid out annually?

One option is that as the US entity or person (promoting marketing for Indian manufacturing firm) is entitled to marketing commission. This is a simple way, which could be done even with bankers, as it is a Current Account Transaction. Such commission can be paid legally, through bankers, as long as it is reasonable. But, please understand there could be many other options fitting into your requirement, depending upon your nature of business, arrangements legally with Indian manufacturing entity, tax effectiveness, and so on.

There are no ceiling limits prescribed. However, any reasonable limits on turnover, (if paid on export turnover realised basis) should find favour with bankers remitting the commission.

Can I buy flat in India by sending personal check or bank draft from USA bank (in dollar$) instead of opening a NRE or NRO account with Indian or bank like Citibank? In this way if I buy flat can I convert the Indian Rs. to US$ if in future I sell the house? I shall keep all the record of dollar transaction. The reason is that all bank NRE and NRO account give less money while converting dollar to rupees?

Yes, you may talk to your banker in India. As long as the funds are remitted into India in free foreign exchange, then it is in compliance with law. If you acquire the flat using foreign exchange, then on sale later, you are permitted to repatriate up to foreign exchange used for acquisition.

My son is in USA and is working as a postdoctoral research fellow in Maryland. In April he sold a house in Chennai inherited through a will from his grandfather (he was my father's younger brother and was not married). As my son could not come for the sale, the same was done through power of attorney for him and the proceeds were taken in my name. I have transferred the amount to Mumbai and would be investing in capital bonds of national housing with a lock-in of three years. Now my son has a chronic health problem in US and is under treatment. He would like to repatriate at least 20000 dollars as he has financial problem. How can this be done?

You may request your banker to remit US $ 20,000 for maintenance of close relative abroad. This is permitted by A.P. (DIR Series) Circular # 3 dated July 17, 2003. This need not be combined with sale of property, which is a separate issue independent of this.

Is there a way to credit the rental income to a NRE account directly and not NRO account? I want to be able to pay my monthly loan-dues from the rental income of the property we bought as NRE.

Credits to NRE and NRO account are strictly as per regulations under foreign exchange law to bankers. You may remit the rental income only to NRO Account, as NRE account is a foreign currency account.

I am an NRI with an NRE account in India. I lent some money from the account to a friend in India. Now the friend wants to repay the money. Can he put the money (in INR) back in my NRE account?

Since NRE Account is a foreign currency account, you are permitted to credit loan repayments only to NRO Account.

My brother is an Australian Citizen of Indian Origin. He has been holding some shares of an Indian company, which was allotted to him in the NRE quota long time back (probably before he became an Australian citizen). The shares are in physical form. The dividends are getting deposited into his NRE bank account in India regularly. Now he wants to sell the shares. He does not have any DMAT account for these shares. Please let us know the procedure. Can he repatriate the funds after sale?

Your brother is permitted by the foreign exchange regulation to repatriate sale proceeds of shares allotted to him. However, for procedural aspects relating to DEMAT account and completing Transaction of sale of shares you may contact a registered broker of a Stock Exchange.

I have been offered an employment abroad in a reputed MNC. My family is to remain in India. I need to know what type of NRI account should I open & which bank would be offering good services?

Once you become a NRI you are entitled to open an NRE or NRO account. The first is a foreign currency account and the latter one is a rupee account. For details you may get in touch with banker of your choice.

I am an NRI and I have purchased an expensive car in 2003 that I plan to sell now. Can I repatriate this money back? The money for the purchase was from my account abroad.

The regulation does not directly permit repatriation of such personal 'movable assets'. You may deposit the sale proceeds into NRO Account, and, later under permissible route you may repatriate them.

I want to start a venture capital company, which will be in real estate sector, with Rs 5 crore as initial capital invested by both NRIs and an Indian citizen. Is such an arrangement ok? What will be the minimum capital for VC companies?

Investment advises relating to business depends on host of complex factors and cannot be generalised. Based on the facts given, your investment in VC is permitted subject to regulatory compliances with regard to foreign investment in real estate sector.

I had bought a flat in India as an NRI about 20 years ago. Subsequently, I moved back and lived in the flat for 12 years. I am an NRI again now, and wish to dispose off my flat. Is it possible for me to repatriate the proceeds of the sale of my flat?

Yes. It is possible to repatriate sale proceeds. There is no information, whether you had acquired the property using foreign exchange or rupee. If you had used foreign exchange, then only up to foreign exchange utilised for acquisition you can repatriate. If you had used rupee account, then also repatriation is possible from out of NRO Account, if you establish that the acquisition took place 10 years before.

I am an NRI and still an Indian citizen. I have a partner in USA who is an American citizen. He is interested to invest in agricultural properties in India along with me on a 50:50 or 49:51 basis. Is it possible to buy agricultural lands in India in the above case? Or can we float a limited company in India with both of us as directors and buy on behalf of the corporation? Please let me know.

No. Foreign investment in agricultural activities is not permitted.

Is it possible for a PIO (Person of Indian Origin) to own a business in India? Is there any limit on the percentage of ownership? What are the tax implications as compared to Indian resident?

Business advises cannot be on too general information. Generally, PIO can own business. Specific answers pertaining to limits depend on the nature of business, the regulatory and legal requirements, the ceiling limits, if any and so on. Once specifics are shared, we can support you better.

Follow-up query

My wife, three kids and me are PIO's with Canadian citizenship. My father owned some businesses and real estates in India. He died recently and I inherited some residential and commercial properties and one of the businesses (Manufacturing and exporting firm).Now is it possible for me to continue this business having me and family (wife and three kids) as partners in this business? If no, what is the maximum percentage of ownership we can hold in this business? Is it a legal requirement if we want to continue the business we must have a local Indian resident as major partner in the firm?

Inheritance is permitted, as it is operation of law. Inheritance could be for assets (residential / commercial properties) or for business (manufacturing exporting firm). The 'firm' you are referring is a Limited Company? In which case, shares can be inherited from deceased resident (your father). If it is a non-company entity, still you may own the business, without any ceiling limit, subject to regulations in this regard. Please share with us further information, if you need additional support.

I was born in America (I am not Indian) and retiring to India, and wish to know if it is possible for me to own/purchase land/immoveable property in India?

The answer depends on whether your parents were holding Indian passport at any point of time. If so, even though you are born in India, you status for exchange control law will be Person of Indian Origin (PIO). As PIO, you are entitled to buy immovable property in India.

I have a friend who is a Brazilian citizen. He is employed as a pilot with an Indian scheduled airline. He is paid in rupees after tax deduction. What if any is the limit on repatriation? He is keen on availing the maximum possible since his family is still in Brazil.

Was your friend (Brazilian citizen) at any point of time citizen of India? Pending this vital information, he can repatriate for maintenance of close relatives up to US $ 100,000 per annum and if he is employed in India, he can repatriate up to 75% of his net salary. Please share with us more details for supporting you better.

I am an NRI based in USA. I am interested in opening an account with ICICI Direct so that I can invest in the Indian stock market, but ICICI Direct does not provide this service for NRIs based in the USA. Can I open an account with an Indian address (e.g. my parents address)? Are there any legal implications (both in India and USA)?

The exchange control law permits your investment in recognised stock markets through registered brokers, through bankers. It does not deal with other procedural issues. If your bankers permit with your local (temporary) address you may do so. Thus, there are no specific legal implications in India, since the same is not dealt with by exchange control law. For US legal implications, you need to get advise from local counsel there.

Can NRI be Karta of HUF?

This question is strictly covered under Hindu law, not dictated by exchange control law. However, the answer is YES, because 'Karta' of HUF is by status (being born in Hindu family) not decided by residential status. It may so happen a Karta may be resident (when he is so by residing in India for legal purposes) or non-resident (when he is so by residing outside India for legal purposes).

We have purchased an apartment in Goa and currently only visit for 6-week holiday a year. In a few years time, we would like to move to Goa and retire on a permanent basis. We have heard of residential status and 182 days being mentioned. Can you please clarify what we have to do when we move into the property permanently?

Nothing, but to inform your bankers, to re-designate your NRO/NRE account into regular Account on your becoming resident.

Whether or not a company shortly to be incorporated in India can borrow funds in the form of loans from overseas shareholding company? If so then what are the formalities under the FEMA & also certain circulars under the RBI if the incorporated company takes the FIPB route?

The borrowing is called External Commercial Borrowings (ECB). ECB from shareholders is permissible, subject to the conditions as to end-use restrictions, all-in-cost of borrowings, etc are complied with. No approval is required up to $ 500 million. You may do the Transaction by filing simple Form 83 with Bankers. Circular # 60 dated 30-1-2004 gives primarily the ECB instructions. This has to be referred with recent amendments to it. Bankers will take you through simple procedures.

I am a NRI since 1998 leaving in US. My mother has an account in ICICI Bank. When I went to India last year I included myself as a joint account holder to the same account. So that account is not NRI account. I gave 20 lakhs to my friend 3 years back and he is returning that amount to me now. If he deposits that amount in my ICICI bank, then can I get that money back here in USA in USD? If not what is the way to get the money in USD?

As a non-resident you should have designated the joint account as NRO Account. Anyway, having done the transaction now, you now take the loan back from your friend and put into Bank account, and convert your existing bank accounts into NRO account. From out of such account, periodically you can remit as per regulations governing the account, under various heads for specific purposes.

I am a PIO cardholder and I am in India. I want to know if I need a work permit to work in India.

Exchange control law does not govern work permits. It is governed by Immigration / visa Rules. You may have to check with any agency dealing with these matters.

I returned to India from USA in 1993 after completing my studies and brief employment there. I had savings and checking accounts that I could not close due to some reason. I have come to know that though these accounts became inactive I can get the funds after completing procedural formalities. Please advice whether 1. Can I open RFC account now and transfer whatever funds are lying in my account? 2. Is there any lower or upper limit to open RFC?

I am assuming from your brief that your account is in US bank. If this case, you are free to repatriate from the US bank, and get into your account. Thereafter you may obtain Foreign Inward Remittance Certificate (FIRC) from your bankers, stating that the money represents your earnings abroad. RFC account is not permitted freely.

I am a NRI living in USA. I am considering buying a property in Chennai. The property was originally bought by a PIO in 1972 & is now inherited by his children (PIO, Malaysia) after his death. I would like to know the legal procedure to be completed for purchasing the property.

Buying property involves legal compliance under Foreign Exchange law & property law.

The Foreign Exchange law permits you to purchase the property as PIO. You can use the foreign exchange for acquisition of property, by direct remittance through normal banking channel or by using your NRE/FCNR Account, if any. No permission is required for buying property.

As for property law compliance (such as payment of stamp duty, drafting sale deed, registration etc.) you may consult a property lawyer.

Follow-up query

My request was different. What is the procedure for buying property from PIO?

The procedure for buying property for PIO (buyer) is same, whether the seller is a resident or PIO. There is no particular procedure for buying property from PIO, except that foreign exchange should be used for acquiring the property.

Can I invest in mutual funds from an NRE account?

Yes. You can invest in mutual funds from your NRE Account.

I purchased a plot from a builder two years ago. 85% of the amount was remitted from NRE account; rest was from resident accounts in India. All accounts are in my name. I live in US (NRI). I haven't got the possession of that plot so far. Now if I sell the plot after possession or transfer the buyer agreement to someone else, I guess I'll have some capital gains (short term). I know I can bring back the USD part, since it was out of NRE account, my questions are:

1. Can the sales proceeds (Profits portion) of the immovable property go to NRO account and originally invested amount from NRE account to that account?

Yes, as it is your legitimate due in India.

2. Does RBI allow repatriating the profits after paying short-tem capital gains taxes? On what grounds?

The gains from sale of property mentioned above are permitted, to the extent of foreign exchange utilised for acquiring the said property.

I have bought into an IPO from my NRE a/c with right to repatriate the funds. Do I need RBI permission to sell and repatriate the funds? If yes, how do I get the permission?

If the investment is out of NRE Account, with a right to repatriate, there need not be any further permission obtained from RBI. You are within your right to sell and repatriate sale proceeds, subject to taxes, if any.

I built a house in India and moved in 2000.Since then I have moved to USA and have got a green card. Would like to sell the house now. Can I remit the sale proceedings to the US? If yes, then how and how much?

Some more information is needed before answering the question accurately. What was your status in 2000? Did you acquire the property using foreign exchange in the Year 2000? If you had used foreign exchange you can repatriate sale proceeds, to the extent of foreign exchange utilised for acquisition of property.

My dad is a retired pensioner drawing a pension from the Indian Air Force. He is now migrating to Canada as all his children have settled down there (Canada). Kindly guide me in the procedure of getting his pension transferred into SBI-Canada Bank from SBI-India Bank.

On producing proof of his retirement and pension source, your father can remit the assets (that is his superannuation dues) in terms of Remittance of Assets regulation. You may contact your bankers with required documentary proof for compliance.

My boss, an elderly lady, living in India has sold her property here in India. Her daughters are NRIs. She need to send the money across to the US / Canada as gifts. Please let me know as to the best method, with or without RBI clearance. We have all legal documents for any transaction.

The elderly lady can remit the money as gifts (up to $ 5,000 per beneficiary per annum), or as maintenance of close relatives abroad up to $ 100,000 or as settlement to her daughters. You can decide on the options, based on amount to be repatriated and approach bankers for needful.

I am an NRI working in Singapore. Recently, I have converted all my dollars to rupees & sent all my money to India as my contract was getting over. However, at the last moment my company told me that it would renew the contract for another one year. I am visiting India in next 10 days for 7 days. However, while coming back to Singapore from India I want to bring back around Rs 1 Lakh in cash to pay for house rental deposits, personal expenses etc in Singapore. I don't have any cash in Singapore as I have converted all money & salary would take another month to come by. I want to bring the money in cash in rupees from India, as the exchange rate is Singapore is very good compared to India. In India they will charge me around Rs 28.5 to a dollar where as in Singapore they will charge 26 to a dollar (difference of Rs 2.5/dollar. As such I would like to know whether I could carry this amount in rupees to Singapore (as I do not want to convert this money in India.)?

Based on the facts presented, if you have still an NRO Account in India, you may draw from that account. The second option is that as a non-resident you can certainly take back about Singapore $ 4,000 (or so equivalent to Rs.1 lakh), but you cannot carry rupees out of India.

Would I qualify as a person of Indian origin if both my parents were born in India but now having lived in the UK for 35 years have British passports? I would like to buy property on the Andaman Islands for commercial use. Is that possible?

Yes, you are a Person of Indian Origin. You can buy commercial property, subject to regulations, in any part of the territory of India.

I am a resident Indian and got USD cheques for 1000 US dollars for last three months, which I have deposited in Indian Savings bank account. Is there a limit from RBI for foreign inward remittance in a calendar year?

The purpose of inward remittance is not stated. As long as it is legitimate purpose, there is no limit at all. All that you have to do is to obtain the Foreign Inward Remittance Certificate (FIRC) from bankers, stating clearly the purpose of remittance and account the same appropriately for your income tax.

Follow-up

I am a resident Indian and receiving USD cheques in India from a payment processor like Paypal time to time for my services provided to a Web Hosting company in US.

My queries are as follows-

1.Are such transactions allowed by RBI?

I am assuming that the above represents a regular business services to a foreign company, against which you earn in foreign currency. Technically, it is not known what is "paypal" and I presume it is legitimate business services. RBI does not control nature / kind of business services.

2.If yes, what are the formalities to be done from my side to make these foreign currency transactions legitimate (eg. FIRC etc.)?

As stated earlier, your obtaining FIRC from bankers & accounting for tax purposes is the required legal compliance.

3.Can I open a Resident Foreign Currency Domestic Account for this purpose?

Resident Foreign Currency is not advisable on the facts stated. The same is allowed only for restricted purposes. Your regular bank Account is sufficient compliance with law.

I migrated to Canada three years ago. I am ex-serviceman pensioner. My pension is credited every month to bank saving account. I am planning to apply for Canadian citizenship. Will it affect my Indian Pension? In which account shall I deposit my pension?

Your applying Canadian Citizenship will not affect your right to get pension for past services, nor depositing them, as they are your legitimate dues in India for past services. You may approach bankers for repatriation of your pension and they will help you.

Can I invest in PPF/ post office if I don't intend to repatriate it later? If I cannot what are the complications if I don't declare that I am an NRI and then invest?

NRIs are barred from investing in Small Savings Scheme (such as PPF/Post office savings). Not disclosing your true status will be a suppression of material fact in law, and you are liable for penal consequences in law and, hence not advisable.

My relative was here in US for business purposes for 2 months. His company owes him $15000. He suggested that his company can issue a check in my name for deposit into my NRE account in India, and then I can gift him the amount after realization in my NRE account? Is this legal or will my relative or I will get into any trouble?

I assume that your relative's Company (Employer) owes him $ 15,000 for his services in US. If this is so, his Employer may not have any direct nexus with you as a non-resident, and, as such compensating you does not arise. Therefore, it is advisable to do the Transaction for payment of services, consistent with facts, to avoid any legal complication later.

I am an NRI who is investing in Mutual Funds In India from my NRE Saving's Account. Should I have opened an NRI Current Account instead? Can I repatriate the principal amount and the interest earned in dividends at a future date without any problem?

I am assuming that your investment in Mutual Fund is as per regulations. Investment out of NRE Account is eligible for repatriation of both investment and dividends. There is no need to have any other account to be eligible for said repatriations.

I am US citizen, of Indian origin (PIO). Do I need actual PIO card in order to buy property in India?

No. As PIO you are entitled to buy property as per regulations. Proof that you are PIO is enough to buy property.

I am an NRI living in Australia. My father, who is an Indian resident, has shares as individual and as karta of HUF. He wishes to gift part of this to me and my brother, who is a PIO. I would like to know:

1. Do I need RBI permission for the same?

Yes. RBI permission is needed for gift from person resident India to a person resident outside India.

2. Is there a limit to the amount of shares that can be gifted by him to me from his individual or HUF portfolio?

The regulation does require RBI permission, furnishing information such as identity about transferor / transferee, relationship and the reasons for gift. The regulation does not specify either limit either in terms of quantity of shares as asked in this question or proportion as asked in the next one.

3.While he is alive are there any regulations governing the proportion he should gift to his sons and his married daughters from HUF assets?

Answered above.

Grandmother passes way around 1980. Will left « of valuable Mumbai property to my uncle and my father. Brothers never executed the Will and sisters took possession of the property. Both my uncle (no descendents) and my father (my mother inherited his property) passed away. We finally located the Will. The question is it possible for my mother to execute the will at this point? Mother is American citizen who was born in India.

The Exchange control law (which deals with transferability or repatriability of inherited assets) does not operate at this juncture, given the facts peculiar as above. First, the property rights, under the laws of India, have to be ascertained, and, in conformity to that will rights have to be established. Once the will is written as per law, then comes the exchange control law for transfer / repatriation issues concerned with such inherited assets.

I am foreign national married to an Indian citizen.

a) Can I buy a residential property and register under my name? (Money (foreign currency) will be transferred from abroad)

There is no general permission for foreign national to buy residential property in India. As such, you need to apply to the Reserve Bank of India, for special permission. But, your wife has general permission being an NRI.

b) Can I be a joint owner of the property with my wife of Indian citizen and register the property under both names?

There is no general permission for joint ownership, with NRIs who are permitted by the Regulation. So, even for joint ownership you need to approach RBI for permission.

I have two queries-
a. Can I make transfer between the two NRE accounts?

Yes. Transfer between two NRE Accounts is a permitted credit as per regulation.

b. Can I invest in a business owned by my brother as a partner?

Yes. If the firm's business is not dealing with property, agricultural /plantation activities. The investment is permitted on 'non-repatriation' basis.

Can I buy a property with someone in India if I am an NRI and a joint property owner is a family member and is Indian Citizen? If yes, what kind of Bank Account I (we?) open? Also do I need to be there in India to buy the property in India or I can give power of attorney to my family member in India and he/she can do the transaction on behalf of me?

Yes, you may buy property. If you desire repatriation of sale proceeds later on, it is better to open NRE Account or remit money through normal banking channel into India. Resident can have regular bank Account. Power of attorney is good enough, subject to procedural compliances with registrar's office in the State in which property is situated.

I had purchased commercial property when I was an Indian citizen in Indian Rupees. Now I am a Canadian citizen of Indian Origin. I would like to sell this property in the near future. Can I repatriate the Funds from the sale of this transaction to Canada? Do I need RBI permission?

If you have held the property for 10 years, you may seek repatriation. Otherwise, the sale proceeds has to be held as deposit for the balance period.

As a NRI can I start a sole proprietorship concern in India?

Yes. The investment shall be on non-repatriation basis.

I am a NRI, currently residing in Dublin, Republic of Ireland. I am looking forward to purchase a property here and I am looking for some finance from India. I currently bank with ICICI bank and hold NRE and NRO account with them. Please advise.

I assume that your 'looking for finance from India" to mean you look forward lending from an Indian Bank. If you are proposing to buy property in Ireland, the Indian Banking may not finance you for such property.

I want to buy a property in Australia in joint name (me and my wife) worth rupees 4-lakh US dollars, out of which we have to pay 2-lakh US dollars. Can we buy without RBI/govt. approval? Or we have to take any approvals?

We need more information. Are you a resident in India or elsewhere? Are employed or staying in India or abroad. The answer to the question depends on these facts.

We are US citizens and are planning to move to India next year and we are in the process of buying a property in Ahmedabad. My question is, out of which kind of account should I pay for the property? NRE, NRO or FCNR Deposit A/C? Which types of accounts have repatriability?

I assume that you are Person of Indian Origin (that is presently US Citizen, who had Indian Passport previously). Payment from out of NRE or FCNR deposit Account or remittance into Indian in foreign exchange is the sufficient compliance to ensure repatriability of sale proceeds later.

I was having Housing Loan Account with Central Bank of India. Recently I switched over the loan to Oriental Bank of Commerce to get benefit of interest on home loan. While closing the housing loan account, the central bank has charged me penalty of 1% on Principal Amount in Loan Account on that day. It was given to understand that it is guideline by RBI to nationalised banks for charging this in the case of "Switch-Over" of loans to other banks. We seek your expert opinion whether there exists any such rule. If yes, from which date it is effective?

This is a matter not regulated by Exchange control law, but banking regulations. Normally, on such "pre-closure" with existing bank there are penal levies, and, nationalised banks will not unnecessarily levy charges, unless required by specific directions in this regard by RBI.

I have sold a property in India. I am living in the UK. I wish to repatriate the money from the property sale back to UK. I have an account with a bank in India. Can I repatriate all the funds and how long should it take?

The information about acquisition of property is relevant for answering the query. Is the property acquired funding from foreign exchange as NRI or out of rupee sources? Or is that inherited property?

Gift of $5000 can be given by an Indian to foreigner. Can it be given in rupees and deposited in Indian Rs?

Though there is no specific bar in gifting $ 5,000 to a foreigner, normally, such 'gift' is made to close relatives out of natural love and affection. However, there are other available routes such as donation up to $ 5,000, which could be considered. The remittance has to be in dollars only and not in rupees.

I am an NRI residing in the US. Can I invest in mutual funds in India on a repatriable basis? If yes, whom can I invest through?

Yes. You can invest on repatriable basis in mutual funds. You may contact a registered broker, who will guide you with procedures.

My husband's brother would like to gift the family house (in his name) in Kerala to my husband. My husband is a USA legal resident (Indian citizen) and his brother is a Canadian citizen of Indian origin. They would like to authorize (give power of attorney in our absence) their brother-in-law to do the legal transfer and formalities in Kerala in their absence. Since it's a gift between brothers on a family property in Kerala, what are the procedures that we have to do here as well as in Kerala?

Gift is a transfer of property and as such needs registration in conformity with sub-registrar office procedures in Kerala. As for exchange control law is concerned, the said transfer is permissible. No procedures to be done in US, in so far as Indian laws are concerned.

I would be obliged if you could help me in my following queries:

a) Can a person open up a new PPF account for his spouse or for himself if he is an NRI / PIO? I mean, as an NRI can I open a new PPF account?

No. NRIs / PIOs are barred from investing in PPF.

b) Can a PI continue to send money to his existing PPF account? Can he open a new PPF account? What I mean is before becoming PIO, I was Indian citizen and had a PPF account. Now after I become PIO, how shall it affect my PPF account? I understand that funds have to be sent to PPF account via NRO/NRE accounts. Any other obligations?

PIOs are barred from investing in PPF Account. You have to stop investing further in your existing PPF Account. As for existing Account is concerned please contact your bank for procedures by which you have PPF Account for closing it or maintaining the same with NRI Status.

c) Are same rules applicable for NRI and PIO for PPF account?

Yes.

d) If I open a PPF account for my dependent son, but both he and me were NRI at the time of opening, what happens?

As said above, NRI cannot invest in PPF Account.

I am US citizen (PIO). I want to give $ to my brother in law for his business as a loan. How can he send me this money back when he wants to return it? What is a legal way?

This can be given as Foreign Currency Loan from relatives, subject to procedures prescribed by bankers. Alternatively, if you are a nominal shareholder in the Business owned by your brother in law, then as a shareholder you can lend External Commercial Borrowings. Short-term repayment is not permitted in both.

What amount of currency notes in Sterling is allowed when travelling to India without declaring to the customs on the currency Declaration Form?

Anything above $ 5,000 needs declaration at Customs.

I am a NRI, live in US and want to purchase Kisan Vikas Patra on my father's and mother's name. Can I also become the joint holder in KVP with my father/mother?

NRIs are not permitted to invest in Kisan Vikas Patra (KVP). You have to ascertain the terms and conditions of Post Office KVP investment to ascertain whether NRI (who are not permitted to be the original and first investor) can hold such investments, as joint holder, where first mentioned name is a Resident (in this case I assume your parents are residents of India).

I am an NRI having a green card in USA for business purpose. I have to go to India. Do I need a business visa of India for that? The company I am working under has got a subsidiary branch in India. I have to work there for one year.

The Foreign Exchange Management Act does not deal with this issue. You have to get the appropriate visa as per Immigration Rules currently in force. As for Foreign Exchange Management Act is concerned, your short-term employment is permissible.

I am a U.S. Citizen (not an NRI/PIO, etc). As a foreign national, am I allowed to purchase real estate (residential/commercial) property in India? If not, then how about partnering with an Indian national (NRI)?

As a foreign national -- not being an NRI / PIO -- you are not given permission by the Reserve Bank of India (RBI) to purchase residential or commercial property in India, either individually or jointly.

Whether permission of RBI is required to transfer the shares of an Indian Company held by NRI or foreign Company to another NRI or foreign Company? Also, what is the relevant circular?

No permission is required in terms of Regulation 9 (2) (i) & (ii) of Notification 20 of FEMA, as long as the buying non-resident entity does not have similar previous business or commercial arrangement in India.

I am a GOI employee and have shifted to Mauritius on 2 years assignment, after which I go back to India. I had not changed my resident accounts in India till date, which comprises a bank account, demat and trading account (3 in 1) with ICICI Bank. I have operated the trading account and also have made other payments also from the said bank account. I had also remitted money from Mauritius to the said account. I need to make loan re-payments, property installment payments and have rental receipts. The most important I have no intention to repatriate any money out of India. Now my query is-

(a) Whether NRO account is sufficient or I need to open an NRE account also?

As long as you do not need repatriation, NRO Account serves the purpose.

(b) May I continue trading in the shares in India through the existing 3 in 1 account or do I have to follow a separate procedure as per the RBI rules?

While the Transaction of trading in shares itself is permissible under Exchange Control Law, for procedures, you may have to contact any registered brokers in recognised Stock Exchange in India.

I am an NRI based in Bangkok. I am interested in the Franklin Templeton Pension Plan. This plan is Non-Repatriable. Can I still invest in this Pension Plan from my NRE Account or do I have to go in for a NRO Account, or can you suggest anything else?

First of all, investment should be permissible for NRI as per the terms of Franklin Templeton Pension Plan. If so, then you may invest from NRE Account itself.

I purchased a property from Ansals in 2003. The plot was under construction and the constructed property is being handed over to me next week. I wish to sell this property (its been 2 years now since the purchase). The payment was made through my NRE account. How much can I repatriate? The entire sale proceeds or the amount was withdrawn from my NRE account for the purchase.

Only to the extent of foreign exchange utilised (in your case payment from NRE Account) for acquisition of property is permitted to be repatriated.

I'm an NRI. While coming back to US what is the maximum amount I can carry with me (in USD) in cash or traveller's cheque? My wife is an American Citizen. What is the maximum amount (in USD) she can carry with her?

Both of you can bring in USD. However, if it exceeds $ 5,000 you should declare in Customs. As for taking money from here is concerned, only you can do so. But you cannot physically carry it. But have the money transferred in permissible avenues from your account here. The details about these remittance will be advised, if we know the details of your account or deposits or investments here.

What is the procedure to be followed under FEMA for the acquisition of residential property by a foreign national?

Foreign Nationals, who are not NRIs or Persons of Indian Origin, are not permitted to acquire residential property in India.

I want to know about the limitations of amount that an Indian resident can wire money abroad. Secondly, I need to know about the regulations of RBI regarding online margined forex trading in for individuals.

There cannot be general answer to the query. We can support better, if the purpose of remittance is known. For instance, Indian resident can remit money for their relatives, education, medical expenses, gift etc for varied amounts. The evidence towards purpose of such remittance should be given to bankers, complying with their documentation. No forex trading is permitted as per current RBI regulations.

My dad is an agriculturist, with income less than 2 lakh per year. I am an NRI, with Indian passport. I wish to purchase a property of Rs 70 lakh, with 80% loan in my dad's name in Karnataka state. The rest of the money will be sourced from me to him. Will there be any problem with this transaction? In future, if I return to India, and inherit the property, will this be an easy transfer?

Funding the property, partly (20%) from you and balance as loan repayable by your father (80%) does not pose any problem. Inheritance, as per law, is recognised by the Foreign Exchange Management Act (FEMA). However, to the extent of your investment shall be by way of remittance in foreign exchange or from out of NRE Account, if any, so that later, if at all you seek repatriation of funds, it can be done. If you just desire to return to India for good on a later day of your choice, but not repatriate funds outside India, there are no issues under FEMA at all.

I am buying a property in Tamil Nadu with a NRE account in bank there. I am here in USA. I am going to get the land in my father's name and when we go to India we are planning to transfer it in my name. Is this a good procedure? If so while transfering will it cost a lot? Please explain.

As long as the land to be purchased is not an agricultural or farm or plantation land, there is no issue in foreign exchange law, in your father purchasing the Land and thereafter transferring the same to you. But, as regards application and legal planning of Stamp Act (duty to be paid at the time of Registration of Transfer of land from father to you) you may seek the advise of a property lawyer.

I am a US NRI. I am planning to buy a house here and my mom is helping us by selling one of her properties in India. She is an Indian citizen and has always been in India. How can she send the proceeds of the sale to me?

You mother being a resident can either settle the proceeds in your favour or remit the same through permitted routes of current account transaction such as education, maintenance to close relatives, gift etc, depending on the quantum that she desires to remit.

I am an NRI since 1996 and in 2004 I invested Rs.5 lakhs in Kisan Vikas Patra through a cheque issued from my NRE a/c. During my interaction with the Postmaster I told him that I am an NRI but he told me it does not matter. But now I heard from my friend that NRIs cannot invest in KVP. I have plans to settle down in India in 3 years time and by the time KVP matures I will be a resident in India. Please advice what I should do now.

Yes, NRIs cannot invest in KVP. But, you cannot undo what you have already done. As long there is no repatriation of funds out of India, there should not be an issue. I think this may be possible, since in three years time you are planning to be here. So, get the maturity proceeds and do not ask for repatriation.

I wish to purchase a property in India owned by a foreign national resident in India (from funds received from outside India. At the time of purchase of the property, the foreign national was resident of India and married to Indian resident. Is it safe to purchase such property since there is no RBI permission by the foreign national to purchase property? The foreign national is leaving India for good in the near future.

A foreign national cannot buy property without RBI permission. Now, he can regularise the same by applying to RBI. RBI may impose some conditions on repatriation. As for you as a purchaser is concerned, as long as bring in foreign exchange into India to buy the property that is in confirmation with foreign exchange regulation. However, asking the Seller-foreign national to regularise will be the best. Please also confirm whether he is a Person of Indian origin or foreign national? It is surprising how the sub-registrar office registered the property in the name of foreign national without insisting on RBI permission in this regard.

A private limited co incorporated in India for trading is the subsidiary of a company incorporated in Dubai.

a. Is there any ceiling in holding the shares of the Indian company by the foreign company or non-resident Indians?

There cannot be a general answer to Foreign Investment. Normally, even for trading (unless you are a status holder exporter), you should have obtained Government Approval for your subsidiary. In that case up to ceiling limit permitted by the Government Approval, no further permission is needed. If the ceiling limits are exceeded, Government Approval is needed.

b. Whether the foreign co/NRI Directors can guarantee the credit facilities extended to their Indian subsidiary from Indian banking system?

Subject to banking rules in this regard, foreign company / NRI directors can guarantee the credit facilities extended to their Indian Subsidiary.

I have recently sold a lot of shares on the NSE that were acquired 10 years ago when I was an Indian resident. I am now a PIO with a UK passport. Under current account convertibility regulations, I understand that I can remit this money outside India (about Rs 50 lakhs). My query is: can I re-remit the money back into an NRE account and earn interest free income on it?

Three things are to be made clear in this case: One, sale of shares (purchased while you were resident) is not a current account transaction, but a capital account transaction. Secondly, you are permitted to repatriate (subject to taxes, if any) the sale proceeds, without any ceiling. Third, you can remit again into India into NRE Account, as per rules governing transactions with this account and credit the same into that Account.

I am an NRI who has invested in real estate in India. I transferred part of the initial money for the purchase via my bank in Germany into my regular savings account in India and then paid for the land; rest I took a home loan in India for which I send money from Germany every month via bank transfer.
1) Will money paid every month for bank loan EMI also be considered as foreign investment, which I can repatriate?

Yes, the money paid every month for bank loan EMI also be considered as foreign investment, which you can repatriate, as long as the money is remitted in foreign exchange from Germany.

2) I have a regular saving account here in an international bank and send the money directly from Germany to this bank in India and the EMI checks go out of the same bank. Is that ok? Or should I open a NRI account for the money to be repatriable?

The procedure followed by you is okay. But, preserve the remittance in foreign exchange, to be eligible for repatriation later.

3) Since all the money for my investment is coming from out of India in foreign exchange can I take back all of the profits when I plan to sell it?

Repatriation is allowed only up to foreign exchange utilised for acquisition of property (which includes foreign exchange used for repayment of loan)

I am working in Singapore for 5 yrs. I used to send my every month saving to my parents. They saved in their a/cs. Now they are purchasing a residential plot for me in Hyderabad. I am now in Singapore. Pls advise me whether the registration can preferably be done on my name or my father's. I am will be returning after 2 yrs.

Factually, it is your earnings that you have sent to your parents, which was saved by them over the years. It is advisable to purchase the property in your name, as it is from your income only. I am assuming that you would have remitted foreign exchange through normal banking channels to your parents.

I have been an NRI since 1978.Presently I have one NRE (since 1999) and one NRO (since 2003) account with a certain bank. I did have an earlier NRE account with same branch in my name since 1978. The NRO account was specifically opened in this branch to facilitate remittance of my rental income which was earlier being deposited in one of my savings accounts as described: I have two savings accounts, one of them since 1977 and another since 1990. I relied on information from a certain "Handbook for NRI" that the existing accounts of Indian Nationals going abroad and gaining non-resident status are automatically treated as "Ordinary Non Resident" Accounts. Hence I assumed I had non-repatriable NRO accounts but had to open another for repatriating my rental income. In June 2005 I deposited maturity proceeds of my PPF and LIC in one of the savings accounts as my understanding at that time was PPF / LIC are non repatriable. In your reply to my query of 12/12/05 you confirmed PPF / LIC are repatriable. Hence the following questions:
1.Can I transfer back my exact amounts of PPF and LIC by two separate bank drafts to my NRO account that I opened for remittance of my rental income since bank remittance outside India is permitted through one branch only? I have the copies of original drafts from PPF and LIC. Thereafter I can seek remittance of the same.
2.One of my savings accounts will have significant funds from rental income since 2001 till my opening of NRO account. Can I transfer these monies also to NRO account and apply for remittance, as I understand NRIs are eligible for repatriation of current income for all the years from 1996-97 onwards? Any small amounts remaining in these savings accounts can be disbursed in India by me to relatives. I can then close the savings accounts and have all transactions at one branch with one NRE and one NRO account as recommended by you.

Remittance from NRO Account is permissible (subject to producing proof to bankers remitting foreign exchange), on the maturity proceeds of LIC / PPF (Question # 1 above) and Rental income (Question # 2 above). From what you say there have been some wrong transfers into different account the proceeds. That is at best a minor error. As long as you have clear proof that the proceeds belong to your maturity value of LIC / PPF Account or through your rental income source, you can take it up with your bankers for first 'crediting' NRO Account, with these bona fide receipts in India, and, thereafter seek remittance from that NRO Account as per Regulations in this regard.

I will be relocating to UK at least for a couple of years. Am I expected to stop using my International Credit Card? Do I have to close my existing Personal Loan and Home Loan? What's the best way to handle the above?

The Exchange control law permits issue of International Credit Card (ICC) for NRI / PIO, and, it has been granted to you as per regulations. The relocation of the card holder to another country abroad or liquidating their loans taken (be it Personal loan or Home loan) in banks in India, and continuance of such credit facilities are left to bankers to deal with, and, you have to take this up with your lending bank only.

I am a NRI, residing in UAE. During August 2005, I took a personal assistance loan from UAE bank (for purchasing property and remitted in my NRE rupee account). Later I withdrew money from my NRE (About INR Rs 22 lakh) and kept the money in the custody of my parents to purchase land. Now, since my plans have changed and we are in the process of immigrating to Australia, I want to take the money to Australia. Could you please advise whether it is possible? If so what is the procedure to repatriate whole amount? I have the evidence of my bank transaction statements. Is this sufficient to get the money repatriated?

NRE Account, both credits (inward remittance) and debits (withdrawal) are regulated. Unfortunately such unique cases are not covered by the regulation. You may take it up with your banker, with proof of foreign exchange remitted into India, its purpose, and your change of plans and first seek permission to deposit the money into NRE Account. Thereafter, you may withdraw the money as per NRE Account regulation. Before implementing this, it is advisable to seek procedural compliances from the dealing Banker.

I have been living in India all my life and now thinking of moving to US with a green card. What happens to my investments in India in form of fixed deposits, real estate, stock market, govt bonds etc? Can I take this money with me to US either partially or fully? How is my investment treated, which I decide to leave behind here?

All investments are those invested by you while you were a resident. Therefore, to the extent of their maturities you can repatriate them through your NRO Account (to be opened by you on your becoming non-resident) as 'remittance of assets'. To the extent you want to leave them here, you may do so.

My husband is a central government employee. I am an individual having my own company [proprietary]. In the process of development of business activities I had contacts with one of the foreign firm who are willing to appoint my company as their representatives/agents in India. The foreign company is involved in doing good business in India and having customers all over India both Private & Government. This company is also having some amount of business in the Govt. office where my husband is employed.

My question is as follows:

1. Can my company have an agreement with this foreign company as their representatives/agents in India?

The transaction you are referring fit in more close to a "Liaison office", where you represent foreign company as their agents etc. From a pure Foreign Exchange Law point, there is no bar on such business relationship, although such business is subject to other law and regulations, in this regard, including the Government Employment regulations.

2. Since the foreign firm is also having some business from the office where my husband is working, does it violate any laws or is it legal for me to accept to be representative/agent of the company in India?

Certainly there appears to be a conflict. Normally, Employment regulations of all Government employers cover such aspects, explicitly or indirectly by implication. You need to take prior advise under these regulations before contemplating any venture of this nature.

3. Can I treat myself as an independent entity irrespective of my husband being a government official and enter into agreement with the foreign company as their representative/agent in India?

That would be a mere 'form'. Employment regulations shall also be followed in 'spirit' & 'substance'. It would be risky to enter into such transactions, before consulting experts in this regard.

4. Is it correct to state, that each individual [husband & wife] are entirely independent and have their own profession?

The second part of the question "have their own profession" seems incomplete. There cannot be a general answer to questions like this.

Yes, every person, regardless of their relationship (spouse, parent-child, brother-sister etc) are, of course, individual. But, this really depends on the nature of the transactions, its sensitivity and the context in which such "individuality" is asserted. Stated other way, while 'individuality' of persons is reality, their blood relationship cannot be completely ignored in a given situation. You need to take proper advise before venturing into any transaction as stated.

I have got a website. I receive my earnings from that site in USD. I get the money deposited into an online payment processor like stormpay.com or paypal.com. I receive 200USD every month. What is the upper limit for receiving money in a single year?

Two things are important in these types of transactions. You should receive your foreign exchange remittance into India through normal banking channel (it is not known whether the payment mechanism said by you are through normal banking channel). Second, you should preserve proper FIRC (Foreign Inward Remittance Certificates) for that and account the same for Income Tax purposes. If these two procedures are followed, then there is no limit for your earning potential.

I am a NRI and would like to purchase a flat in Bangalore from a PIO. What is the procedure for doing so since RBI rules seem to specify that permission from RBI is required to do so? In case my father who is a resident of India is made the co-owner of the property, would it still be required to take RBI permission?

You can purchase the flat from PIO using foreign exchange remitted into India through normal banking channel. No RBI permission is required for this transaction. Co-ownership with a resident does not change the legal position.

I am NRI based in the US. I am planning to buy the ESOP shared allotted to me by my company. I approached a bank in India to open a repatriable NRI demat account for this purpose. They told me that:
"RBI has stopped issuing PINS approval to NRIs from USA and without PINS approval you will be unable to trade in Indian market. You can exercise your ESOPs in your demat account; however, you will be unable to sell them. This approval is stopped till further notice of SEBI."
Is there any way I can buy and sell the ESOP shares? I would like the funds to be fully repatriable.

This seems to be a direction from RBI to Bank, and, bankers are bound by it. As for exchange control law is concerned, acquisition of shares through ESOP is permissible, and is normally repatriable, but for the above direction. You may contact your Employer-Company / recognised broker for alternative procedure for repatriation, and, thereafter acquire the shares under ESOP.

I'm an Indian citizen and as an Indian wanted to know that what are the laws relating to buying agricultural land in Australia?

If you are an Indian, you can buy property abroad only up to US $ 25,000 per calendar year. But, the rules regarding acquisition of any immovable property depend on host country laws (in this case law applicable in Australia).

What happens to existing resident PPF account once person becomes NRI? Can he invest from Indian ordinary account? Would he earn interest?

NRI is not permitted to invest in PPF -- from any account.

I reside in the US and have a question on home-buying loans. To take a home loan, do I need to personally be in India or my US documents and/or Power of Attorney etc is sufficient for the loan?

This is a matter not dealt with by exchange control law. The procedure depends upon lending bank requirement, specific to the facts of your case. Normally, there is no requirement to be present personally.

I have a peculiar problem. There is an e-commerce website in USA. They buy from US vendors and then sell to US-based customers. Vendors invoice them monthly and customers pay by credit cards. I do not wish to buy the company, but only the software and then run the business from India. What would be the best way to do this business? Can I do foreign transactions sitting in India (including US$ payment to vendors, but I will have no imports to show RBI)? Or should I open a company abroad? I can open a company online in 2/3 days. I can then open a US bank account. Do I need RBI permission to open a company? Do I need RBI permission to transfer initial money to this US bank account?

Business queries and answers to them depend on careful consideration of host of complex factors, such as your existing business, its structure (company or a firm or individual) its net worth, the mode of funding, the core competency, etc. However, your investment will come under Overseas Direct Investment (ODI) schemes under FEMA. Subject to your complying with the Notification No.19 of FEMA, you can invest abroad to carry on overseas business.

I have got approval of American Citizenship but I will get my Naturalisation Certificate only after swearing ceremony on 12th January 2006.Then I will have to get US Passport and since I have to get back to India on 31st January 2006 for meeting some important commitment. I have to go in for 5-year entry Visa before getting PIO Card, which will take more time. Since I have to make do with Entry Visa for some time before getting PIO Card/Dual Citizenship, with the entry visa can I hold Property, Bank Acct/Deposits, P.O.Deposits for a short time?

It is assumed that presently you are a Non-resident Indian (NRI), shortly expecting completion of formalities for US Citizenship. Therefore as NRI you can hold property, Bank Account / Deposits acquired as per foreign exchange regulations in this regard. The position does not change with Visa formalities. Incidentally, non-residents are not permitted to invest in Post Office small savings scheme.

In 1996 I invested in the NRI quota of shares in an Indian company. Today the company is delisting its shares and buying them back at a higher price. I have been an NRI for many years now and never had any income in India and never paid any taxes there. My questions are - 1) Do I need RBI clearance to sell the shares back to the company and repatriate the proceeds? 2) I have an NRO and NRE account in India. If I don't get the RBI clearance which of the two accounts can I deposit the proceeds in? 3) How can I then repatriate the proceeds?

1) If the shares are acquired on repatriation basis, you can sell the shares back to the Company without RBI Clearance and repatriate the proceeds 2) You do not need RBI clearance. You may deposit the proceeds in either of the Accounts 3) You may approach bankers for repatriation procedures.

My mother and me came to US 15 years ago and are US Citizens now. We have two flats in Delhi, which we bought when we were in India. Now we want to sell those flats. We will get Indian rupees when we sell those flats. How do we convert that money to US dollars?

It is permissible for you to repatriate the sale proceeds of flats purchased while you were residents. You may have to deposit the sale proceeds with NRO account and furnish proof to bankers remitting money out of India regarding the sale proceeds of flats. Other minor procedures / compliances will be informed by bankers.

I am a US Citizen and I will be taking Overseas Citizenship Of India (dual citizen). I would like to return to India and start my career in business, for which I am exploring the following options. Can I legally do this?

Yes, because you are Indian citizen also and for the reason you are going to return to India, and, as such, will become a resident on doing so, you are entitled to do business in India.

I am a PIO cardholder living in USA. I have some ancestral agricultural property in India, which I would like to sell. Can I invest the money from the sale in real estate and then repatriate later by selling the real estate property along with the gains? Or can I deposit the money IN NRE or NRO accounts and repatriate the money later along with the earned interest?

Since it is the ancestral property you need RBI permission for repatriation of sale proceeds. If you desire to sell and re-invest the sale proceeds in rupees in real estate, the said property cannot be repatriated for 10 years, since investment in such real estate is made not in foreign exchange, but in rupees only.

I am NRI out of U.S.A for the last 14 years and planning to apply for US Citizenship. About a year and half ago, I took Kisan Vikas Patra investment for less than Rs 10 lakh. I am been reading the posts recently and I see articles that an NRI is not supposed to invest in Kisan Vikas Patra. What should I do? Could I transfer these investments into my parents or relatives' names?

Yes. NRIs are barred from investing in small savings schemes such as KVPs. But, having invested in defiance with such regulation, the least you can do is to disinvest (transfer to others) as per procedures of issue of KVP. You may contact your agent to get to know the procedures for transfer as per terms and conditions of KVP. Normally, any investment violating regulations, the income or earnings out of them are not allowed to be repatriated outside India.

I'm an NRI with a valid visa living in US. My wife is a US citizen and we are travelling to India shortly. I have a decent amount of money in my NRO account and I would want the two of us to bring back some money to US to put as a downpayment for a new home we want to buy. My question is how much money (Cash or Traveller Cheques) can both of us take back with us to US from India by legal means?

You need not physically take the money as cash or TCs. You may well give remittance instructions from the US to your bankers in permitted routes. Any bonafide remittances are possible, such as, education, maintenance of your children, the limits of which we can detail, once the balance sought to be remitted is known.

I am currently residing in the US and am looking towards opening an NRE account in India. I would like to know what are the legal provisions towards investments in Indian Mutual Funds via a NRE account?

You are permitted to invest in Indian Mutual Funds. You can know the procedure for such investments through any recognised broker in registered Stock Exchange.

I bought some Kisan Vikas Patras when I was in India. The KVPs have matured now but I am a US permanent resident now. How do I withdraw the KVPs and get US dollars out of them?

I assume you had purchased while you were in India, meaning while you were resident. You can approach bankers under "Remittance of assets" scheme to remit the maturity proceeds.

An NRI wants to set up 100% wholly owned subsidiary in India. In this respect, what are the legal formalities?

The answer depends on the activity proposed to be carried on in the Company where you would like to hold 100 percent of equity holding, through Foreign Direct Investment (FDI). It is permissible for NRIs to hold 100 per cent equity holding in permitted activities. The legal formalities are:- (i) Find out the regulation for the proposed business activity (ii) If regulation permits, comply with procedure for bringing in the subscription money and (iii) Incorporate the Company.

I am a PIO and of British Nationality, and looking to purchase an apartment in Goa, possibly with proceeds of a sale of another property we hold in India. As a British National, would I be required to purchase in pounds sterling?

Repatriation of sale proceeds will become easier (as per current regulations) if you invest in foreign exchange. If the sale proceeds of the 'other' property that you are willing to sell now is repatriable, then you can first repatriate such sale proceeds into your country and thereafter bring it back (banker's commission will be the damage in this option). Alternatively, you may deposit sale proceeds into NRE Account and from that invest in acquiring the apartment in Goa.

I am an NRI from Canada currently visiting India and would like to convert some of my Indian funds to Canadian dollars and then take it to Canada. Are there any RBI restrictions/conditions on such a conversion? What is the procedure?

In case your funds are already lying in your NRO Account, the same can be remitted as per procedures. If not, as per regulations, you can deposit the funds into NRO Account and, thereafter remit in permitted channels. The procedures are simple, for which you may contact your bankers.

Follow-up

I do not have an NRO account but only have an ordinary savings bank account. Is such a conversion still possible?

NRO Account can be savings account itself. You may contact your bankers with proof of your status and open NRO Account, and, thereafter credit money into such account, as per regulations. From out of such NRO Account you may remit moneys needed.

I am an Indian resident in India and I want to invest in high yield investment programs called HYIP: example http://www.12dailypro.com recommended by my friends living in Australia. My question consists of three parts 1) Is it legal for an Indian to invest online in such a program? 2) I need to fund this program through a payment processor, which is stormpay ( www.stormpay.com) so is it legal to send money through them. 3) If I am allowed to invest in dollars what is the upper limit?

As Resident individual you can remit up to US $ 25,000 per calendar year for any purpose, including acquiring shares. As for mode of remittance is concerned, the normal mechanism is wire transfer through banking channels. You may ask bankers about the 'payment processor' that you are referring to, whether the same is in accordance with accepted payment methods.

Follow-up

a. I just now posted a query. This is also connected to that. I am an independent software consultant working in India. I am an Indian by birth. I bid for software projects all over the world in various currencies. Once I execute the project I will be paid through payment processors like paypal, stormpay etc. I got to know that RBI says e-gold is illegal in India. So are paypal and stormpay also illegal? These companies which pay me say they transact business only through these payment processors and they do not issue paper cheques. So can I signup for a payment processor like stormpay and bid for the projects? Are there any RBI guidelines on these payment processors? Please clarify. My business activity is very much dependent on this.

As for payment methods, it is governed by RBI directions to bankers. As I said earlier, the normal method is wire transfer, which is common and prevalent globally. You may venture into any other new system, only after ensuring through bankers, whether the same has got RBI acceptance.

b. Can you suggest who in RBI is the best authority to say whether it is legal to use Stormpay, paypal and other such money processors? Thanks.

You may contact bankers (not RBI, because bankers will go by RBI directions) and share with them the new method of payment, to get their views regarding such payments techniques.

I am moving to Dubai from India on employment end February 2006. I have following queries, which could not effectively be answered by my bank:

1. Can I keep my local resident savings bank account for payment of various utilities in future? Or do I need to essentially close it and open NRO account instead?

On your becoming non-resident, your existing savings bank account is simply 'designated' as NRO Account, from which payments mentioned above could be made.

2. I have some fixed deposits created out of my income as resident Indian. Can I keep those as it is? Or do I need to break those and convert to NRI fixed deposits? What would be the tax implications in both cases?

Consistent with facts, you are supposed to inform bankers about your NRI status on your becoming Non resident. The existing deposits can be designated as NRO deposits. There is no need to close and re-open them.

3. I have some shares in demat form in bank attached to my resident Indian account. Can I retain these shares? Do I need to inform the company of which I hold shares on my changed status? If I need to created a NRO account, can I simply de-attach my demat account from my resident savings bank account and attach it to the new NRO account?

On your becoming non-resident inform the status all agencies, such as bankers, demat account. Rest is only 'designating' existing accounts as NRO Account. That is all.

4. I have some mutual fund and RBI bond (not tax free bond). Can I retain these as it is? Or do I need to do anything?

All assets that you have held or acquired while you were a resident can be legally continued to be held or transferred, legally. Nobody can take away or demand anything from your property acquired legally, merely because you change residential status. However, on becoming NRI you are not permitted to invest in small savings scheme and repatriation will be considered by bankers as per compliances that are required in terms of Foreign Exchange regulations.

5. Both myself and my wife have PPF account in India. Can we continue these accounts? Can we continue investing on these PPF account through remittance from outside?

No. On becoming NRI you are not permitted to invest in PPF. As for closure or other procedures for funds invested till the time you are resident, talk to bankers maintaining PPF Account for procedures.

6. I hold RBI 6.6 % taxable bond - which has been created with income in India in 2004. Can I keep this bond or do I need to do something else?

As said in answer to Query # 4, this was asset acquired, while you were resident. You can continue to keep the investment.

NRI with NRO account & a demat account. NRI holds some shares in his demat account.

(1) Does he need RBI permission to sell these demat shares?

No. If the shares were purchased by him on repatriation basis.

(2) Does the NRI need RBI permission to buy stocks & shares from the market?

No. General permission is given for NRIs to buy stocks from market.

(3) Is RBI permission necessary to transfer shares to the NRIs Demat account through "Off Market Deal"?

I assume "Off Market Deal", as sale by a private arrangement, of course, through stock exchange. If the sale is through stock market then no permission is necessary for transfer of shares.

Follow-up

(1) If the shares were held before a person became an NRI, will the NRI need to seek permission of the RBI to sell the shares (which are held in demat form)? The NRI holds an NRO (non-repatriable account).

If the shares were purchased as a resident (that is before NRI becoming non-resident) then under "Remittance of assets" the NRI does not need prior permission for sale of such shares. It is clarified, that in such case since the resident is the acquirer of shares, there is non "non-repatriation" with such shares. NRO is non-resident rupee account only.

(2)How does an NRI holding an NRO (non-repatriable account) obtain general permission from the RBI to transact in shares?

NRO is only Non-resident Ordinary Rupee Account Scheme. There is no "non-repatriability" here. In fact, remittance is permitted from this account. Kindly clarify for further support.

(3) A person can transfer his shares through "off market deal" to another person, may be a relative. Is this permissible, if the recipient is an NRI with NRO account? Logically it seems to be permissible, as immovable property can be transferred to an NRI.

Still such "transfer" shall take place only through stock exchange. Yes, NRI can transfer, the shares. But, repatriability of sale proceeds is possible, only if the sale shares are acquired on 'repatriation' basis, not otherwise. Law deviates from logic in certain situations.

If I invest money in real estate in India through my NRE account money, what are the requirements and paperwork needed to repatriate the money invested plus gains in to USD. Do I need RBI permission? Papers from the builder? What else?

As long as you invest from out of NRE Account, to the extent of foreign exchange utilised for purchase of property, you can repatriate. Proof that the remittance is only sale proceeds of house, purchased out of debit from NRE Account is sufficient.

I am a US Permanent Resident since 2000. I used to work for an India based Software firm till 2005. I was granted ESOP based stocks in the company prior to IPO. I acquired these stocks using INR between 2001 and 2003. I sold the bulk of these stocks this year (2006). As an NRI, I acquired these stocks on a non-repatriable basis. Subsequent to the sale, I am now trying to remit the proceeds.

Under Section 10C.24A of the Exchange Control Manual, published by the RBI/FEMA, it would appear that FEMA/RBI does permit me to remit the sale proceeds from these stocks.

Am I correct in my interpretation of this section of the ECM?

I understand that I need to file Form RCI with an authorized Forex dealer along with a certified statement from my Chartered Accountant.

Is this sufficient for me to remit the sale proceeds to the US?

I have no other income in India. I do have investments in other properties (land) but that's not relevant in this case.

Since the shares have been acquired on "non-repatriation" basis, you can repatriate the income on sale of such shares only with prior RBI permission.

Follow-up

a. Could you guide me to the relevant RBI processes and documentation to obtain RBI approval for repatriation?

Apply to RBI (no prescribed form. Plain paper application giving details are enough) Mumbai for securing their prior approval. If RBI favourably considers your application, the repatriation shall be subject to conditions, if any, imposed by RBI.

b. Contrary to the mail exchange we had earlier, it appears that RBI does permit outward remittance of funds held in NRO a/cs in India.

Please refer the following:
1a. http://www.rbi.org.in/scripts/FAQView.aspx?Id=52
1b. http://rbidocs.rbi.org.in/rdocs/notification/DOCs/64109.doc
1c. http://rbidocs.rbi.org.in/rdocs/notification/PDFs/51137.pdf
1d. http://www.rbi.org.in/Scripts/BS_FemaNotifications.aspx?Id=2602

Refer document 1b above. See section 4Bii and 4.B.iii. 5.1, 5.1.a.ii and Section 13.

I interpret this as outward remittance up to USD 1 million per annum are permitted by the RBI/FEMA.

Questions:

1. Am I right in my interpretation?

No. The US $ 1 million dollars from out of NRO Account is for specific purposes such as education, medical, sale of property. Yes, sale proceeds of shares (acquired on repatriation basis) can be remitted, subject to taxes. Since you had acquired the shares on "non-repatriation" basis, the same cannot be remitted under 'general permission' normally available without RBI clearance. Meaning, you need specific RBI approval for remittance of sale proceeds of such shares.

2. What is the procedure by which to obtain approval and initiate remittance?

As already stated, apply to RBI in plain paper form giving particulars. Situations like this are unusual.

I am working in the Middle East for the last 10 years. I am planning to return to India. Is it possible that I can repatriate some money and keep it for my future medical/son's education?

You can bring in the moneys earned through normal banking channel. The law permits you to remit for education abroad of your son, as a resident itself, up to $ 100,000. You can remit the same as and when need arises.

One NRI wants to sell his property in India to another NRI. The buyer shall make payment by cheque from his NRE account. Can the seller deposit that cheque in his NRE account?

Yes. Deposit can be made to Seller's NRE Account.

We live in the U.S and my friend had a question. My friend and her husband are US citizens. They bought some shares while he was working in India in India in late 70's. What should they do to change it to U.S address? They still have the Indian address and the dividends are going to their parents address. They have an NRI account. Can the dividends be deposited directly into an NRO account? They haven't done anything since they moved to this country.

Your friends can remit their dividends to NRO Account. They have to inform the Company to do the needful at their end.

I have remitted USDs to my Indian (standard, non-NRI) account. However, I want to bring this back now, since the real estate deal did not materialise. Can I bring this back? How?

You can remit the moneys in two ways: Either tell the banker that the intended purpose is abortive, and, thus you will like to have the money back. Alternatively, in permissible schemes, such education or medical or maintenance of close relative purposes you can seek remittances.

I am transferring some USD from my US bank account to my resident savings account in India using money2India service. I am planning to invest in some plots or house with this money. Am I eligible to repatriate the same amount even though this was not an NRE account? If this was an NRE account I suppose I could repatriate. But how does the process work in either case? How does one keep a paper trail of how much money was transferred and what was done with it? Which banker usually does the repatriation process?

Investment shall be made in foreign exchange (either by remittance through normal banking channel or debit to NRE Account) to be eligible for repatriation later (only up to foreign exchange utilised for acquisition). You have to ascertain from your bankers before doing transaction about 'money2India service' remittance mode, which is not recognised by RBI in their regulations. As for process of repatriation, any banker with which you have NRE Account will be able to repatriate on compliance with simple procedures. You may talk to them for getting aware of such procedures.

I am a NRI along with my Foreign national (U.S.Citizen) planning to invest in Indian Real Estate like Commercial/Residential sale/rental.

1. How could we invest?

You can invest through normal banking channel, subject to compliance with Foreign Exchange Regulations in this regard. Please note, foreign investment is permitted in "Real Estate Development" and not mere purchase / sale of properties (residential / commercial).

2. Can we form a U.S company in which we both will be partners and then invest as a Foreign company?

Such questions cannot be answered in general terms. As NRI you have preferential treatment for foreign investment in Real Estate Development. But, as foreign company it would not be NRI Investment but Foreign Investment. Then the scale of investment is larger.

3. Is it necessary to form a company in India for this purpose?

Yes, if you prefer long-term investment.

4. Can a U.S Citizen invest directly in Indian Real Estate?

U.S.Citizens can invest in foreign direct investment only in Real Estate Development (not 'real estate' in the sense of buying and selling properties in India, repatriating profits). There are detailed guidelines this regard.

I have been working in Indian based company for the last 12 years. Our company entered into a JV with Georgia (former USSR) - based company. Since Nov 05 I am working in the JV in Georgia on behalf of Indian co. My salary in India is deposited in my SB account. Now I am getting some amount in USD in Georgia.

1) Can I send my savings from USD to my SB Account through Western Union Money Transfer?

Yes, your savings abroad can be remitted into India. As to the mode of remittance, if the receiving bankers approve of Western Union Money Transfer as RBI-approved remittance of foreign exchange, it should be ok. Normally, wire transfer through banks is in practice.

2) Shall I convert my SB account into NRO Account?

Yes. You are supposed to on your becoming non-resident.

3) If I convert into NRO Account, can my wife withdraw some amount for their expenses from NRO account?

Yes, you can give withdrawal instructions to bank.

I am an NRI (Indian citizen) becoming American citizen:

1. Will I lose my share of inherited agricultural property?

Your inherited agricultural property will not be taken away. But, if you decide to sell and repatriate sale proceeds you need RBI prior permission.

2. If I buy agricultural property now, when I become US citizen, what will happen to the agricultural property I bought when I was Indian citizen? Can I continue to hold it?

As NRI you are not permitted to by agricultural land in India. However, you can continue to hold the agricultural property that you had bought while you were resident.

I am a foreign national and not of Indian origin. I read the other day that the Congress has passed a motion to lift the ceiling on specific limitations on foreign property investment in India, as well as to increase the allowances for both foreign construction and residential development projects. Have you heard of this? My understanding is that the new laws would take effect in March of 2006. What implications will this have on people such as me who are desirous of acquiring property in India?

It would be premature to speculate on some policy statements when it is expressed as an 'intention'. It would be appropriate to wait for its specific legal shape and thereafter, study that for any implication.

Whether Indian resident is permitted to go in for an external loan which is repayable in foreign currency? Up to what extent RBI permission is not needed or such permission can be secured after getting credit of the loan in to his/her credit? Whether the individual should prior permission/approval from RBI or the Inward Remittance Certificate to be issued by the recipient's bank will be sufficient? Whether the annual payment of interest to the principal lender in terms of foreign currency is possible? Is there any tenor limit for external loan by RBI? Is there any cess?

As per latest External Commercial Borrowings (ECB) policy, individuals are not eligible to raise ECB.

Can a NRI hold resident Indian accounts in India if these had been opened before the NRI status was acquired? Also, can the funds in foreign accounts be transferred to India through remittances, after the person returns to India?

As per regulations, once a resident becomes non-resident, he has to re-designate his local accounts as non-resident account. Transfer of funds from abroad is permissible, as long as it is through normal banking channel.

I have NRE account, Citibank N.A,Chennai/Vadodara. How can I make NRE deposits from Dubai? Is any option available for Auto FD?

Just remit money from Dubai and contact your bankers for procedures.

I am an NRI in UK. I have Rs. 34,00,000 invested in India as Indira Vikas patra deposit bonds, generated from sale of a residential property in India. These bonds are due to mature shortly and I wish to repatriate the money to UK as sterling pounds. Could you please suggest the means to bring this money from India to UK?

If as per terms of Indira Vikas Patra NRIs can invest, then on maturity you can repatriate them. Alternatively, if you had invested them while you were resident, then you can deposit the proceeds into NRO Account and repatriate as "Remittance of Assets".

I am planning to buy a property which is in Bangalore, India. I am an NRI living in US, property owner is an NRI living in US. Can I make payment for the property in USD? What are the documents that have to be prepared for supporting the transaction?

If you make the payment by bringing in foreign exchange into India for purchase, later repatriation of sale proceeds may become easier. Also, the Seller may be liable to Capital Gains Tax or the Sub-Registrar office (this essentially a State subject and depends on local law) may require payment of consideration at the time of Registration. For these, reasons it is advisable to bring in foreign exchange and pay consideration in India. There are no supporting documents, except remittance of purchase consideration into India and registration of Sale deed.

How much USD in cash NRI can take to India with out any Custom declaration? My wife and child are also NRIs. Can they also take cash in USD to India? Can I deposit the money, brought to India in USD, by me, my wife and minor child, after getting converted to Indian rupees from RBI certified money changer to my NRO A/C without any problem?

Physically if you carry beyond US $ 5,000 you have to declare. But, nobody physically carries these days. The risks are more than legal. You can remit any money through normal banking channel. Depositing into NRE or NRO account from abroad through wire transfer (swift mode) is accepted and safe mode, rather than bringing into India, with legal hassles, risks and converting with Money Changer. It is advisable to use banking channel for these reasons.

I am NRE presently having taken Australian citizenship I need certain clarifications. If I come to live in India for 5 to 10 years because of children, parents & when I return to Australia can I take back NRE rupee deposit (principal) in the form of Australian dollars? When I am living in India, if I have investments in Australia, can I still convert from dollar to rupees & and deposit it into my NRE saving account? If I need can I break NRE deposit over the counter in India & take money when I am staying there?

NRE Account can be repatriated (remitted outside India) subject to regulations of operating account. Similarly while you can hold the investments in Australia made by you, while you were there, any sale of such investment should be made from Australia through normal banking channel only crediting NRE Account. Breaking deposit is subject to banking regulations and you have to contact your bankers for the relevant rules. But, you have to take the money only through remittance through banker and not physically.

Mr. X, a British Citizen of Indian Origin, who had purchased land in India in 1986 from out of Foreign Inwards Remittance, now wishes to dispose of the property and wishes to have the entire sale proceeds to be repatriated after payment of Income-tax on Capital gains @ 20 %. Now, does he need to obtain permission from RBI, or suffice it to just approach the nationalised Bank for repatriating the proceeds? If the prior permission from RBI is required, is there any specified Form as such?

If the land is not a agricultural or plantation land or farm land, repatriation of sale proceeds is permitted. You can sell the land and approach bankers for remittance of such sale proceeds, complying with their procedural requirements.

I am an overseas citizen living in US. I would like to setup an educational charity trust in India. Please let me know the procedures.

I assume you are a Person of Indian Origin. Set up the Trust as per law, consulting an advisor. Accepting foreign contribution from foreign source requires permission from Home Ministry under Foreign Contribution Regulation Act, 1976.

I'm an NRI and I inherited a house from my father. I understand that the sale proceeds of the house can be remitted outside India. But, instead of remitting these proceeds, I bought another property from the proceeds. Will I still be able to repatriate the proceeds of the new property after holding it for a few years?

Yes. After holding the property for 10 years, as per current regulations.

I am a British citizen of Indian origin and interested to buy some property (plot of land) in India (Punjab). Could I ask any of my close relative to buy it on my behalf? If yes, then what (if any documents) I need to send from here?

There are two issues legally: One exchange control law & property law. Exchange control law obliges you to bring in foreign exchange (not use local use rupee resources) for acquiring the property, in case you desire repatriation of sale proceeds later. Under property law a Sale deed is to be registered under Sub-Registrar's office. It is a State subject. Generally, you need to register a power of attorney appointing your close relative before he executes the sale deed. You need to get proper advice from local lawyer dealing with property title, & registration.

After I move permanently to India in June 2006, can I keep my bank account in USA? Can I also open an RFC account in India if I have an account in a US bank?

Yes. In terms of Section 6 (4) of Foreign Exchange Management Act you can hold you bank account in USA, which you have been holding while you were a in USA. As far as RFC accounts are concerned, a very limited and specific cases are given general permission. Normally a resident, who has no dues such as pension or other superannuation or student who have gone abroad for studies or for temporary visit are only allowed to open RFC, that too subject repatriation on return.

Can a foreigner of Non Indian descent, as an individual, rent a flat for 11 months in India as they are going back and forth to India on business? If yes do they have to declare the same to any govt. body?

Yes. NRI can rent a flat for 11 months. No need for any declaration to government.

I believe that an NRI can only repatriate original investment in foreign exchange, for up to two residential properties.

1. Is this still true, per latest RBI rules?

Yes.

2. Is there any way to repatriate investment from more than two residential properties?

No.

Please let me know if an NRI can give any amount in rupees from his NRE a/c to any NRI.

If you desire to give the money to NRI (I assume NRI is residing abroad) you may do so as 'remittance from NRE Account. Please clarify why do you desire to pay in rupees.

I am a U.S. citizen, not of Indian origin. I travel to India every two years. I would like to participate in the Indian stock market by investing in stocks of Indian companies. Since I have need for the money when I travel there, can I open a non-resident account? I will not need to repatriate the principal or the gains. I plan to use the moneys in India. If the answer is yes, which bank should I contact?

Yes. You may contact any nationalised bank to meet your legitimate requirement and open an NRO Account. Please talk to bankers for getting to know procedures in this connection.

My company is registered in the US as an incorporate. We plan to provide real estate services to NRIs based here who want to buy real estate in India. We are planning to open offices in India and register a branch company there with the parent company being here in the US. I am an NRI myself. Our associates (not employees) will be based in various Indian cities who will act as local realtors. They will show properties to our NRI clients who visit India. We also plan to provide property management services to the NRIs after they buy property in India. The brokerage/income the company receives will be in US dollars. Will this set up work legally? What other options do we have to run such a set up?

If you desire to set up a Branch office in India you need RBI (Mumbai office) prior permission. The Branch can carry out only those of the jobs that are permitted by RBI. Alternatively if you need to start a Company in India, you may do so with previous Government approval. The regulations for automatic approval are not too clear for realtor services. So, it is better to seek prior Government approval for safe investments.

I am an Indian national and have moved to China in Dec 05. I have a 1 year visa and work permit. Am I permitted to a)open a foreign currency a/c based in Hong Kong or Singapore b) maintain that account post return to India?

As a non-resident for presently, you may maintain Foreign Currency Account, but you can maintain the balance available in that account, that you earned while you were a non-resident. But on your return to India, you cannot freely operate that account and can do so only subject to regulations here.

I have the following queries:

a) Once I am a PIO resident in India, can I open a resident DMAT account or NRI DMAT account for trading in shares?

The answer to this really depends on the procedures relating to DMAT Account. While it is true you may be a resident, frequent travel or stay abroad may make you a non-resident. You can contact a registered broker to get know the procedures. As for foreign exchange law is concerned, all your deposits can be regular resident deposits as long as you are resident. But, you are obliged to re-designate them into non-resident accounts, once you become a non-resident.

b) Once I become a PIO resident in India do I need PIS approval to trade in secondary markets or can I operate normal account without PIS?

As resident you are permitted to trade in Stock Exchange without any approval. PIS applies only for non-residents.

c) If I stay in hotels in India as a resident PIO do I need any specific forms / registration to be done? Do I need to carry my passport / PIO card every time I travel / stay in hotels?

Normally a column in the visitor register demands your nationality. This needs to be filled up factually. Carrying travel documents like Passport or identity is important for many reasons and can come handy in emergency situations.

I am NRI. As a gift I am planning to give some amount to my mother. My Mother is resident Indian. Can she purchase KVP with that money? If yes, then would be any problem later while encashing the KVPs. e.g. if there would an objection on the source of money?

As long as source is clearly established by proof of gift, there should not be a problem. But, take care that KVP investment is not permitted for non-residents like you. Only resident -- your mother -- can invest in that.

My status is NRI and can I remit funds through my NRE account for the purpose of investing the same into my business in India and have the repatriation option? Also is it possible for me to have a lien on my NRE fixed deposit and take a term loan against the same from the respective bank in India in favor of my company in India?

Yes. Remitting through NRE Account is permitted under regulations, for as investment is concerned. But, the issue of repatriation, approvals, etc. depends on compliance with a number of other conditions. Yes loan against NRE Account is permissible. But, you should not use the funds so obtained for investment in agricultural / Plantation real estate activities. Bankers will sanction such loans based on RBI directives.

My late father had purchased shares of some public sector banks. He did not have a demat or trading account. He passed away without leaving a will and is survived by a wife (my mother) and children. None of the children has any objection to transferring the shares to our mother.
We enquired at the banks, but have not been able to find any information on how this could be done. Could you please let me know the procedure to be followed to get this done?

We need further information before we advise the proper course to be followed. What is the residential status of your mother? Did your father (I assume he was a resident) purchased out of his own income? There are two issues here: Legal succession & completing necessary formalities under the Companies Act, about which you need to take advice from your counsel. The other is possible applicability of Foreign Exchange law, about which we can guide you.

Follow-up

Here is the additional information you requested.

1. Residential status of mother: Indian Resident.
2. Residential status of late father: Indian Resident.
3. Shares purchased by late father were out of his own income.
4. Legal Heirship Certificate has been obtained listing mother and children as legal heirs.
5. Children are ready to provide a no objection letter to transferring the shares to mother.
6. I have not been able to find out the procedure or a contact person/no./e-mail to begin the process of effecting the transfer. If it helps the shares are of Canara Bank and Syndicate Bank.

Since your Late father (resident)shares are going to be transferred to your mother (also a resident) Foreign exchange law will not apply. You can write to the Bank Secretarial Department, stating the fact along with legal heir & Death Certificate and explaining the NOC from children. The Secretarial department will guide about Companies Act formalities based on Articles of Association of the Bank to enable you to complete the formalities for eventually legally transferring all shares in your mother's name.

I was told by HSBC that US citizens (born in India) are not allowed to invest in their mutual funds; so also Franklin Templeton. Is it because they have operations in the US? We appreciate your clarification.

As for Foreign Exchange Management Act, it is permissible for PIOs to invest in domestic Mutual funds. But, the terms of individual Mutual fund being offer, it is up to the entities to give offer to persons they consider appropriate.

Is there any restriction on NRIs (who may be foreign citizens) from holding an Indian Rupee based credit card which is paid out of their NR accounts?

The regulation generally permits grant of loan to NRIs as security against their deposits on certain conditions. It does not state anything in particular about credit cards in domestic currency. This is left to commercial judgment of bankers. But, you are entitled to obtain international credit card as per rules.

I want to send some money as gift to my brother in Canada. Could you tell me the maximum amount allowed and the best way to send it?

US $ 5,000 per calendar year. Approach your bankers for remittance.

I am an NRI planning to start a real estate business (construction) in India. Are NRIs allowed to do real estate business in India and if not, can I start the business by loaning money to my parents and have them do it?

NRIs are permitted to make 100 per cent investment in shares of companies engaged in real estate development -- meaning construction of residential / commercial complex etc. So, you can start the business yourself, after complying with procedures in this regard.

I have invested in a Texturizing Yarn Factory (Gala included). The payments were made through a transfer to my NRE account (through ICICI). If I have to repatriate the profit or initial investment income, what are the necessary steps I have to follow? Do you recommend any Tax/Law professional who would advise on a continuous basis?

If the foreign investment is made on "repatriable" basis, then profits (assume the investment is made in a limited company and hence profits = 'dividends') to the extent dividend declared are repatriable, subject to applicable taxes. Repatriation of initial investment is sale of shares and this sale proceeds are also repatriable, subject to taxes.

My father will be a joint account holder of my NRE account. He's also an NRI and wishes to invest in an Indian mutual fund. Upon his return to India after his retirement, will it be possible to repatriate the investment and any profits to myself since he may no longer maintain any of his foreign accounts?

Investment in Mutual funds is permissible as per foreign exchange law. Repatriation is possible, by the owner of Mutual funds. You may contact a recognised stock broker for procedural compliances. Normally, for securities first mentioned holder should be the person seeking repatriation.

I am a PIO living in USA. I would like to purchase land in India and build a house. Please let me know if I should take any permission from RBI/ filing a declaration in form IPI 7?

No. It is not necessary to get any permission from RBI. The form stated is no longer in use. General permission is given to you to build house stated above.

I would like to start business of taxi hiring. How do I go about registering company and what are the company regulations?

You may contact any Chartered Accountant / Company Secretary to register the company, get to know the compliances for foreign investment for stated activity and proceed accordingly.

I am planning to buy Property in Chennai, India. I would like to know how to proceed with the money transfer process.

By swift transfer mode or by debit to NRE Account, if any.

I am a NRI. Am I eligible to start a Real Estate business in India (Building and Selling)? In that case will it be possible for getting loan from bank, and what is the eligible amount?

Yes. You are eligible to start Real Estate development. As for loan from banks are concerned, it is left to their commercial judgment.

Follow-up

I have a small clarification. Real estate development means I will be able to buy land, build apartments and sell them subsequently. Am I right?

Yes. 'Real Estate Development" includes construction of residential / commercial premises.

For a Foreign Remittance that happened more than 6 months back, can the purpose of Remittance mentioned in the FIRC be changed? If it can be changed, kindly suggest the process.

The purpose as stated in the FIRC column is "purpose as stated by the beneficiary". So, normally the beneficiary is expected to know even at the time of receipt of funds the purpose of such inward remittance. However, if the change is for bona fide reasons or correcting an error in earlier statement, the beneficiary can make the change by directly taking up the matter with the bank issuing the FIRC.

Can NRIs invest in commodities in India?

No. There is no specific permission under Foreign Exchange law for such investments.

I am investing about $100K in real estate in India towards acquisition of land and I am expecting to sell this land for profit. Couple of questions on this matter.

1. Can I bring back the capital ($100K) plus the gains from this income to USA?

First, as for investment in land itself is concerned, it should not be an agricultural / plantation or farm house. However, you cannot take back beyond foreign exchange utilised for acquisition of land.

2. Is there is limit on how much gain I can bring back?

The limit is that you cannot take back beyond foreign exchange utilised for acquisition of land.

I was Indian citizen and currently became US Citizen, and working in USA. I want to purchase Apartment in India. Do I get home loan in India from any financial Institution? I have Rupee checking account with Citibank.

The Foreign exchange law permits loan to be given to NRIs. However, the terms and conditions are left to the commercial judgments of banker, depending on facts of the case. You may approach the banker for needful.

I understand that NRI can repatriate money from the sale of inherited agriculture property. I have some agriculture property obtained by gift from parents.We have registered documents with the mention of gift instead of inheritance. Now my parents passed away. Am I eligible to repatriate the from the sale of this gifted agriculture property? How this is different from inherited property?

In terms of foreign exchange regulation, you need RBI prior permission for repatriation of sale proceeds of agricultural lands inherited, although "inheritance" of such agricultural land itself is permitted.

Follow-up

Another question is that whether this is applicable for the agriculture land gifted by parents instead of inherited. We have documents registered as gifted property.

Yes. Even for property gifted by parents, you need RBI permission for repatriation of sale proceeds.

I currently live in USA. I am interested in buying land in India. I would like to deposit 30% of the amount into the account that I create (not sure NRE/NRO? which should I open). Then, each month I want to send money for the land. After 3 or 4years, I want to sell the land and bring the money back to USA. How shall I do it? What accounts are required? Will I be able to repatriate all the sales proceeds to USA?

There are 3 issues here, namely, type of land, mode of investment and extent of repatriation. As to the first, you can invest in land, as long as it is not agricultural / plantation / farm land. Second, the mode of investment shall be either remittance of foreign exchange into the Country or by debit from NRE Account. Third, you may later sell such land (which satisfies conditions one and two) and repatriate, only to the extent of foreign exchange brought to acquire the land.

I am a US citizen and PIO card holder. I am planning to buy property (land) in India using US$ by opening a NRE account. When I do sell this property, how can I repatriate the capital gains on this property? Should I inform the RBI on purchase or sale of the property?

As long as the land proposed to be purchased is not an agricultural or plantation or farm land, you can purchase the same through NRE Account, without any RBI information to RBI, both at purchase and sale point. However, the sale proceeds can be repatriated only to the extent of foreign exchange.

I understand that NRIs (including PIO and OCI card holders) cannot own agricultural land. However, are they allowed to have minority ownership of agricultural in partnership with an India citizen?

Yes. NRIs or PIOs cannot own agricultural land. They are also not permitted to have any ownership of any partnership business in India, dealing with agricultural activity.

Is it possible for a NRI to get a personal loan from any relatives or friends? What is the procedure?

Loans from individual relatives or friends to NRIs are not permitted under the regulations.

I would like to ask what my situation would be as a British citizen interested in becoming a dual British-Indian citizen. I am not a person of Indian origin. If I were to find legal employment in India and become a resident what would my situation be with regard to the law and the Constitution [Sections 6(2)(b) and 5(1)(e) and SCHEDULE 1]?Would it be necessary to become a resident and what would be the necessary residence period in order to qualify (bearing in mind Schedule 1)?I hope you can advise me on this matter and hope to hear from you in the near future.

We are unable to support you with answers as our scope is limited to queries in Foreign Exchange matters only. These are Immigration Issues and you have to get advise from Immigration Counsel.

I am a Greek National with PIO Card (my husband is Indian) and ordinarily resident in India for last two years. Can I start business as proprietorship concern in India? Can I use money earned in India through employment for the said purpose? Is any RBI/special clearance required for the same?

Yes. The business should not be in agricultural or real estate or plantation activity. The investment is not eligible for repatriation.

My son who was an immigrant in Canada has now taken Canadian citizenship. He has NRE and Domestic savings a/c and also some FCNR and NRE deposits here. He also has a PPF a/c , all in the same bank. My queries are:

1) Whether he can continue all the said a/cs. The proceeds of NRE deposits, as and when they mature, may be credited to the NRE SB a/c for its eventual repatriation.

Yes. He can continue all Accounts, other than PPF.

2) Can he continue to contribute to the PPF a/c till its term is over?

No. PPF Account investment is not eligible for NRIs. For closure procedure contact bankers.

Want to know RBI Notification for taking money on term deposit from NRI in partnership firm. Explain in detail.

Repatriation now from investment in Firm as deposits is possible, if only, the investment itself was made earlier as per regulations on repatriation basis. We need details of investment, firm etc. from you to support further.

I understand that there is no permission required from RBI in order to repatriate money from inherited property as long as you produce necessary documents to the bank From Charted Accountant about the sale of the inherit ant property. Is this required because I am inheriting agriculture property? Do I have to go in Person to RBI in order to obtain the permission? What are the documents need to be produced? Can we request the permission by mail with all the necessary documents? Can we send some one from India to RBI in order to get the permission? How long it takes to get the permission?

For inherited agricultural property you need RBI permission for repatriation. You can authorise any person in India to apply to RBI. We cannot clearly state the time within which RBI will consider and respond to your application.

As per RBI Notification can NRI/NRE put his money in a Pvt.Ltd. Co as term deposit?

Yes. But there are a number of conditions which the deposit accepting company should follow, as per Deposit Regulations. If the Company adheres to these conditions, deposits can be made by NRIs in Company.

I am an NRI planning to acquire US citizenship and later PIO card (dual citizenship). I am also planning to buy some farm property in India. If I do so now can I legally keep it after becoming a US citizen/dual Indian? The money I am planning to invest would be from sale of Indian property I jointly own right now with my parents (Indian citizens) and not from abroad. Please advise best course.

NRIs desiring to buy farm property require prior permission from RBI. They are permitted without permission to buy properties other than agricultural or plantation or farm lands.

I am a PIO holding US Citizenship who has moved back to India. Though I am thinking of permanently settling in India, I am not sure yet. As I understand, My investment options (RBI bonds, stocks, real-estate, agri lands) are identical to that of a NRI, but my banking options are identical to Resident Indian - that I cannot hold NRE/NRO accounts. If later, I decide to move back to US, can I repatriate all my investments (both done with my US income and with my current Indian income (salary)?

Your present status is that of resident since you are in India. Preserve records for proof of investment and its source. Once you go back overseas, you can re-designate your resident accounts into NRO account and repatriate most of investments, except small savings schemes.

As far as I learned from Citibank, where I hold an NRI account, a credit card cannot be issued for NRIs. I work for a Cyprus-based company in China and my salary is remitted to my NRI account in India from Cyprus. Hence I would like to know which bank (A bank in India or China or Cyprus) can legally issue me a credit card if applied for.

International Credit Cards (ICC) can be granted only for residents, as per regulations. Loans against security of NRE deposits are available only for limited purposes, not for Credit cards.

I am a US citizen of Indian origin. To buy an apartment in India, do I make the payment through a Rupee Checking Account (NRO Acc) in order for that amount to be repatriable when I sell the property?

In order for that amount to be repatriable when you sell the property, investment shall be made by remitting foreign exchange or by debit to NRE Account only, and, not out of Rupee Account.

Can we repatriate the income derived from the inherited agriculture crop before I sell the property? Is this income similar to that derived from rental income property?

Selling income from out of agricultural property requires prior RBI permission. Income out of such property, being current income, can be repatriated on production of relevant proof to bankers.

I bought a house in 1983 when I was in India. Now, I'm a US citizen and the house needs to be rebuilt. I want to build residential-cum-commercial property. How can I pay for construction cost and do I need to take RBI permission for that?

You may pay for construction cost, preferably in foreign exchange so that on a later day repatriation becomes easier. You do not need RBI permission.

I have an online business where my client pays me in foreign currency. I have that money paid via an online company called Paypal, but I do not know how to legally convert it to Indian currency and send it to my local bank account. Paypal has an option to send the checks through postal mail, which unfortunately is time-consuming and insecure. What are the options I have for this? Can I use online services like Xoom.com or Remit2India.com which is for NRIs to transfer money to my bank account?

As for the Foreign Exchange Law is concerned any remittance into India should be through normal banking channel. The new procedures for receiving money into India have to be checked with your bankers for their authenticity and recognition from RBI. Being essentially procedural matters, the bankers should be able to guide you on this.

I understand that NRI can receive gifts from relatives in India up to $5000 per year. Can the relatives deposit equivalent amount of rupees into NRO account? Can NRI receive one gift from different relatives in the same year? Is this amount repatriable? Are there any certificates need to be submitted to the bank for depositing this into NRO account?

Yes, any legitimate due from India can be deposited into NRO Account. You mush preserve the records for proof as to the Transaction, namely it is "Gift" from Indian relatives. The ceiling limit is applicable for each relative. Bankers may ask for proof as the receipt is 'gift'. You may produce a letter, with cheque details from donor.

I am born overseas, living in US. My mother's (born in India) ancestral property is in India and when she passed away the property title has passed on to me. I have a tenant in my property and the rent has been credited into a savings account. I wish to sell the property and take some of the proceeds overseas. What are the legal issues that I should consider?

Open an NRO Account with your banker in India. Give documentary proof of inheritance of property and you are entitled to repatriation of sale property inherited, subject to payment of applicable taxes in India. For procedures you may approach your bankers.

Are the interest rates on NRO Accounts stipulated by RBI and are they the same as for domestic deposits?

This is essentially dictated by RBI directly with commercial bankers, from time to time. You may have to ask your bankers.

As a non-resident Indian, can I invest in real-estate in India? if so, are there any restrictions ? For example, can I buy some land, house or flat now, rent it for a few years and then sell it with the money sent in from overseas?

Buying and selling land (as a real estate trading) is not permitted. But, you are permitted to purchase residential or commercial property by remitting foreign exchange. Later you may sell them by repatriating the sale proceeds, but only to the extent of foreign exchange utilised for acquisition.

I want to invest in Indian stocks and the real estate market. It has been pretty tough to gather information on it. Can u please let me know the specifics of investing in India and the various accounts I need to open for it?

Indian Stocks: By regulation NRIs are permitted to invest in Indian Stocks, in primary and secondary market. You may contact a registered broker in any recognised Stock Exchange in India for procedures. As for Real estate: if you are an NRI you are permitted to invest in residential or commercial property using foreign exchange remittance to India or by debit to NRE Account, if you have one. You may contact bankers for procedures in this regard. If you need any further support giving specific details, we can further support you.

I will very much appreciate if you could advise me on the following matter:

I am a PIO. I intend to buy a block of land in India and then build a residential house on it. I intend to pay for the price of the land and cost towards the building construction from NRE account.

My questions are:

1. Do I need any prior approval to buy the land?

No.

2. Can I have the property jointly with my wife who is also a PIO?

Yes.

3. If at a future date, we sell the property can we repatriate the proceeds (up to the extent of original cost of land plus construction)?

Yes. But only subject to limit of foreign exchange utilised for the property (Land & construction).

4. Should the NRE account from which the cost to be paid should be a joint account between me and my wife?

Not necessarily. It makes proof of remittance simple.

5. What kind of documentation I need to keep for the construction cost?

Remittance details in foreign exchange or by debit from NRE Account together with bills and preferably certification from Engineer after completing construction as to cost of superstructure.

I understand that NRI can receive gifts from relatives in India up to $5000 per year. Can the relatives deposit equivalent amount of rupees into NRO account? Can NRI receive one gift from different relatives in the same year? Is this amount repatriable? Are there any certificates need to be submitted to the bank for depositing this into NRO account?

The ceiling limit of $ 5,000 as gift to relatives is applicable for resident individuals, for each individual. Therefore, there is no bar in different individuals remitting money as gift to relatives abroad. Yes, any legitimate dues in India can be credited to NRO Account. The proof as to gift should be preserved by remitting individuals.

I'm an NRI. While coming to US I understand that I can bring up to $10000 currency as per the US Customs Declaration form. Are there any problems either at the Indian Airport or US airport in carrying the cash in dollars?

Indian Customs may need a declaration at Customs Port, for any cash beyond $ 5,000. But, while there are so many permissible ways for you to remit through bank or wire transfer, why should you prefer physical carrying of cash.

I'm staying in US for a short period of one month. During the end of the stay, when I go shopping and buy some electronic item, there is an offer for a rebate in dollars. Generally they will send this rebate cheque in dollars and it takes 8-10 weeks to process. Since I will be leaving US in the meantime, I have the following question: Since I will be leaving US before I get the cheque, and due to this reason I give the India address to which the cheque to be delivered . Once I get the cheque in India in dollars in the name of some USA bank, how can remit that cheque in India? Is it possible and what is the general price that banks charge to remit such a cheque?

Any remittance from abroad, you are duty bound to deposit into your bank in India, get and preserve the Foreign Inward Remittance Certificate (FIRC), and disclose the same for your tax returns. As for the commission the bankers charge, you should ascertain the current commission with bankers only.

I am an NRI intending to sell a 30-year-old property we have in India. The property was acquired using Indian currency. I wanted to know whether the entire sale proceeds could be repatriated by me or is there a cap on the extent of funds that can be repatriated. Your response will be appreciated.

Up to $ One million, you can remit the sale proceeds of property (other than agricultural, plantation or farm house) purchased in Indian Rupees, and held for 10 years. For procedures you may contact your bankers, and, if necessary, we are available for further support on this.

I hold "Either or Survivor" type accounts in State Bank of India and Citibank. I am going to travel to U.S.A. for job. Would I need to close these accounts?

No. Just re-designate these accounts into NRO Account.

My daughter came from US. She is a green card holder. She left her job after getting green card and now she wants to apply for housing loans. She will join a job here after May 31. She is ready to put FCNR US dollars one lakh. Her income up to May will be in the form of interest. Please tell me how she can obtain housing loan against FCNR or any other legal way to obtain housing loan. can she take overdraft against FCNR?

RBI has given directions to Bankers to give loans to non-residents against security of their accounts. Bankers will exercise their commercial judgments taking into account the merits of each case. You may contact your banker for needful.

If I plan to move abroad and take up foreign nationality, how can I repatriate all my money from India to my new country?

It is permitted for residents who have earned income or created assets while they were residents to repatriate under "Remittance of Assets" regulation. You may contact bankers with specific details of remittance.

Can a resident Indian get a credit card issued by a bank overseas? Especially if it is a corporate credit card applied by his employer abroad (remember the person lives in India though works for a company abroad).

Yes, with prior permission from RBI only. Because credit card issued to residents creates a liability in foreign exchange in India.

Please tell me what are the documents/records to be kept for repatriation of proceeds from the sale of property bought in India with US Dollars (personal checks from US bank or SBI NRE account). What are the limitations for repatriation?

There shall be adequate proof to bankers that the property acquired as per regulations, are using "foreign exchange". No specific prescribed documents or records for this purpose. The limitation is that you can repatriate sale proceeds to the extent of foreign exchange utilised for property acquisition.

Follow-up query

It means any return on investment will get locked in rupees in India. Is this right? Why would any one want to invest in India then? Please clarify.

Simple. Investment is permitted as per the present Policy on real estate for NRI / PIO only for their own use. Not for repeated trading or transferring and making profits. The economic rationale is that land is one that cannot be produced. This policy avoids speculation in real estate, till the time policy framers feel comfortable about our exchange reserves.

I am moving to India from USA. After I move, can I keep my bank account in USA open? My current Life Ins. premiums are being paid from this account. Also, I had loaned some money to friends, which they will deposit in this bank account in near future. If I have to get RBI permission, what are the chances of RBI approving the application? Will I have to explain to RBI every deposit being made to this USA bank account?

You are entitled to have the Account and pay premiums from out of it which you have created and earned while your were in USA. The preferred method, however, would be to request your banker to open a Resident Foreign Currency (RFC) Account, which will serve your purpose.

I am a foreign national married to an Indian national living in India. I hope to start a partnership business with my wife.

My questions are:

What is the minimum fund required to be transferred by me in foreign Currency? (What is the minimum investment limit)?

Must I get prior permission from RBI, FIPB or any other sources?

What must I produce the get the business registered? Opening bank account and filing taxes?

What is the lowest and highest share % permitted?

What amount of foreign currency capital & profit repatriable?

Before we answer your queries two things are needed as clarification. Partnership firm is not permitted on repatriation basis for your investment. You need to necessarily start a limited company (ideally a private limited company) and hold shares with your wife.

Second you need to clarify whether you are going to manufacture or trade. We shall support you with clarity on getting to know these facts.

Follow-up query

Here are the clarifications you sought:

a. Private limited company.

b. Nature of business: Export trade of Indian spices, cereals, vegetables fresh/dried, all consumer foodstuff, machinery, steel/copper/brass/aluminum products, house fittings etc.

c. Imports: Is import of above mentioned consumer products permitted? Is there a percentage limit on the export turnover?

You may start a Private Limited company and do trading. But, for foreign investment you need Government approval. There is no limit on the Export Turnover.

The permissibility of import of consumer products have to be seen under EXIM Policy Manual. You need to get advice from expert on this front.

You are repeatedly saying that investment in PPF is not allowed for NRI but the Govt. site and the banks themselves declare contrary to that. Please clarify.

Based on the Government press release small savings schemes are not permitted for NRIs.

I recently found out that ICICI Bank has stopped issuing debit cards for NRO accounts. They have said that it is a RBI ruling. If it is true can you please tell me where I can find this information from RBI. I have written to RBI but till date no reply from them. Many of the banks are still issuing debit cards for NRO accounts with a cap on international usage.

Commercial Banks are subject to RBI directions, which are directly issued to them. The Foreign Exchange regulations permit them to issue loans (cards) / overdraft against security of their deposits, based on their own Commercial Judgments. Individual banks issuing or discontinuing to all their constituents or certain account holders are best left to their own commercial judgments, and cannot be interpreted. RBI directions in this regard are also directly given as directions to bankers only, and, may not be readily available for verification.

I have NRI USD FCNR and saving account. If I stay in INDIA for more than 1 year after I get my dual citizenship (OCI), do I need to make any changes to my NRI account?

If you stay in India for more than one year, you become a resident. You need to inform your bankers of your status and you need to re-designate your account into a Resident account.

Please suggest a way to move $50,000. I lived in the US for 8 years and am returning to India for good. Please suggest my option/way to transfer the money. I have it right now have it in form of Traveller's Cheques.

This is vague request. What purpose you need to repatriate $ 50,000? Have you already settled in India or planning to come to India, soon? Once more specific facts are provided, we can support you.

Follow-ups

a. I am moving to India in April 2006 to settle there permanently. Please suggest how to transfer the money I've earned (and paid taxes on) in the US for the last 7 years. Will a RFC account be a good idea?

If all your anxiety is about transfer of moneys legitimately earned in US, then simply remit that money in foreign exchange to your account in India. Obtain from bankers the Foreign Inward Remittance Certificate (FIRC) and preserve it. Remittance into India does not need any other procedures.

b. I have already converted all the money I have into Traveller's Checks. Is it ok to carry the large sum to India in form of Traveller's Checks? Please advice.

You may have to make declaration in Customs about the money you bring into India, if it exceeds $ 5,000. Normally, no body brings in physically (in currency or TCs) that much cash. The best is to deposit the TCs into your bank Account, and request the bankers to wire transfer the money into your bank account in India, which is the safe course.

I'm a US citizen of Indian Origin.

1) Do I need to open a NRE or NRO account to transfer funds for the purchase of Property?

If you NRE Account you can transfer funds by debit to that Account since it is foreign currency account. Otherwise, you may directly remit foreign exchange by swift transfer from abroad in foreign exchange for purchase of property.

2) Can I repatriate the sale proceeds to US for the property I've purchased in India?

Yes. (i) If you had purchased the property in compliance with regulations and (ii) To the extent of foreign exchange utilised for acquisition of such property in India.

I have NRE account with Citibank. I do not live in India. Can I buy Indian shares? If yes, how to set up a brokerage account (without PAN card; remember most of the NRIs do not have PAN card)? How to transfer funds from NRE account to brokerage account? What are the tax implications?

Yes. You can buy Indian Shares. As for other procedures (relating to PAN or otherwise) a registered broker should be able to guide you.

We are NRIs starting an EOU at Gurgaon. A current company rupee acct has been opened with Citibank Gurgaon. Please confirm if we need to inform or seek prior approval from RBI of all remittances being made from USA for purchase of machinery, land etc. Is there any problem of repatriation later from this acct? Is this one rupee acct good enough for all types of transactions or do we need to open any other acct for remittance of Dollars from US and later repatriation when required?

Once your carrying on Business in India is as per Regulations, then opening account and remitting moneys towards subscription for shares is not a problem. The subscription money could be used by the Company in India for payment of purchase of machinery, land etc. Shares invested are repatriable. I suppose the rupee account you are referring is the bank account of Company?

I am currently in Russia on a work permit. Can I open a NRI account and remit money from here for repaying my loans in India? What are the regulations concerning my existing accounts in India? What are the restrictions on remitting money from Russia?

You are permitted to open NRO or NRE account. Contact your bankers for procedures. You are free to remit foreign exchange and use it for purposes mentioned by you.

I am an NRI. In Jan 2004 I invested in some commercial property in Navi Mumbai and paid 90 %. I am unable to pay the balance 10 % and the builder is willing to return the amount paid to him, which was from my NRE acct.Can I receive the amount and remit it back overseas? If yes, what is the procedure?

This is a unique case of abortive attempt of property investment. In principle, there should be no objection to bank in remitting the money back from your NRE Account. Please go with needed proof for investment in property to your bankers and seek deposit into NRE or NRO Account, from which you can remit the money to your place as per regulations.

I would just like to ask if there is a restriction or limit for Expatriates assigned in India to send money back to their home country?

Yes.75% of their net salary. 'Net salary' is after deduction from gross compensation minus social security, taxes etc.

My family member in India needs to send money from India to Australia. I need help to find out the process and implications of this. I need to find out if there are any restrictions from Indian point of view as well as Australian side.

A family member can send moneys for close relatives education, or medical expenses etc. If you specifically give us the information as to purpose and quantum we can support you better.

I would like to learn about the processes for buying a property in India for a foreigner of non-Indian (French) origin either for a residential use or a commercial use.

A foreigner cannot buy any property in India (residential or commercial) unless he obtains prior RBI permission.

My daughter, a resident Indian till Nov.'05, has resigned her job in India and joined a job, with work permit, in December '05, in UK.

1. What would be the status of her other accounts (savings & fixed deposits) with other banks , opened in India when she was a resident Indian? Is it mandatory to inform those other banks to convert those accounts as NRO a/cs.? Those a/cs were opened jointly with me(her father) as joint a/c holder with payment option as Either or Survivor. Since I am a resident and she being a non-resident now, what would be the status of those a/cs?

The fact of one of the account holder has turned non-resident shall be informed. If your daughter is the first mentioned account holder, her account shall be re-designated as a NRO account.

2. She has opened now an NRE a/c. with Citibank and remitting funds converted as Indian Rupees in the NRE a/c. Since the interest income in NRE a/cs.is not taxable, but the interest income in NRO a/cs.is taxable, is it proper/wise to close the NRO a/c. and retain the NRE a/c only?

This is really your option. You may retain both account, but substantially operate through one account only, as per your choice. Both these accounts are regulated differently.

3. If at a future date, she decides to come back to India permanently, is this NRE a/c to be closed or converted as ordinary resident a/c?

Yes. That is right. At that time the banker will let you know the simple procedure.

4. She being a non-resident now, can she make any further long-term deposits in banks in India now? If yes, is it as ordinary deposit a/c or NRO a/c? If the deposit is made with me (resident) as Joint a/c holder, what would be the status of the a/cs?

As long as your daughter is a non-resident all accounts (savings or term deposit) shall be any one of non-resident account only. She can continue to place deposits with banks on long term basis, and those accounts will be non-resident deposits account only.

5. Although she has gone abroad (UK) with work permit to join a job there on permanent basis, she is not sure as to how long she will remain there. She may opt to come back to India permanently. So is it obligatory to ask all those banks which are having her a/cs opened when she was here in India to convert all those a/cs as NRO a/cs?

Yes, as per regulations. Once she comes back she can again inform the banker to make it regular rupee account, furnishing proof that she has become resident.

Is it true that NRIs living in USA cannot invest in secondary share market in India?

No. NRI living in USA are permitted to invest in through stock exchange (Secondary market) in India. You may approach a registered broker in recognised Stock Exchange in India for procedures in this regard.

I am an NRI and have American citizenship. I recently sold some ancestral properties in India and the proceeds are now being held in a joint account with my brother in State Bank of India. Is it possible to transfer the proceeds to America? If so what is the limit and what is the procedure in transferring the money?

Your share of inherited property sale proceeds shall be deposited in to NRO Account. Furnish the proof of inheritance to bankers and you are permitted to repatriate the sale proceeds of inherited property from out of NRO Account, subject to tax compliance in India. The bankers will tell you simple procedural compliances in this regard.

What is the difference between NRI and Indian origin in terms of what they can and cannot do in India in terms of investments and buying properties?

In so far as buying properties or investments in India the regulation is the same for NRI and Indian origin. However, the difference is subtle and cannot be listed out in general terms. We shall be able to support you better, if you require the difference in specific cases.

Can NRIs make online funds transfer? Can we trade on equities? If so, then how can we make funds transfer for this? Is there any basic ceiling on this?

Transfer of funds through wire transfer (swift transfer) through banks is normally permitted route. You may check with bankers whether transfer of funds through on-line is RBI recognised route. Yes you can trade on equities. For this, you should be advised by a registered Stock broker in any recognised stock exchange. The ceiling limits are 5% on total paid up capital on each company you are investing, as a single NRI.

I purchased a house in 2002 in Indirapuram at Ghaziabad with my Indian savings ( Rs) for 16 lakh; now the price has gone up to Rs 40 lakh. I have become a Permanent Resident in Canada and want to sell off that house. I also want to transfer that entire amount to Canada to pay off my mortgage for the house I have purchased here. My question is can I sell off the house after three years, can I repatriate all the profit and the original cost?

Your house purchased in Indian Rupees can be sold only after 10 years from the date of purchase. However, the sale proceeds can be kept as a deposit in banks for remaining period (i.e about six years, since the house was purchased four years ago).

I am a NRI having some successful experience in real estate investments in Kerala. Together with help of my NRI friend who soon wishes to re-settle in India, I would like to float a private limited company with the purpose of investments in real estate sector. For working capital, in addition to our investment, we would like to issue shares or units (like mutual fund or unit trust) to other NRIs. Could you provide me with technical aspects related to this?

There are two things to your question: the business activity and the mode of funding. Real Estate Development is permitted but not trading in real estate. 'Real estate Development' means construction and sale of residential houses, commercial apartments, townships etc. In a private limited company only shares are possible, not unit as in mutual fund.

If my status changes to NRI, the bank has asked me to change my SB account to NRO. Would this account be inoperative - since the bank requests for return of ATM card and cheque book !

Do not panic. Your account and legitimate money cannot be made inoperative, unless it is not operative. As a resident your funds repatriation abroad may be less flexible from your account. That is all. Kindly check whether the bank desires to make it NRO account or regular resident account.

I am of Indian origin and presently holding Swedish nationality for the last 10 years. I am planning to sell my inherited property in India and would you please suggest me the best suited account to deposit the money received over there after the sale of the property. Will that money be fully or partially transferable to Sweden?

Yes, inherited property sale is fully repatriable under foreign exchange regulations. As for choosing the right kind of deposit, you may talk to your bankers who will be able to guide you on this.

I and my wife would like to buy a real estate in Mumbai. We are retirees. After our death would our son and daughter, who live in Canada, be able to sell the property and withdraw the cash in Canadian dollars?

Yes. In buying the property and the source of funding should be as per foreign exchange regulation. Once you leave a will your son / daughter will inherit the property and they can repatriate sale proceeds as per regulations in this regard.

I work in the Merchant navy. I was working in Indian company till 2003 and was not NRI and have been filing taxes till then. Since FY 2004 and 2005 I have joined foreign company and have been sailing outside Indian waters for more than 183 days each year and paid my full salary in US Dollars. I presume I am NRI as per this. I have NRE A/c with MNC bank since 2004 .I have invested recently in Stocks through online trading with my Resident Indian Bank A/c which I have in use before I became NRI. However, the funds used for the trading are transferred into this a/c from my NRE A/c by cheque.I came to know that RBI permission is required to Invest in stocks but I am not sure if same applies in my case due to my job profile.

Please note

1. Due to the nature of my job my residential address in Passport is Indian always.
2. Also my Status varies year to year from NRI to Resident depending on period of contract signed with my Shipping Company.
3. Also I will not repatriate my money abroad as I am basically resident of India.

My queries are:

1. Can I continue trading online with the Resident A/c or is there permission required from RBI to invest in stocks?

Since you are basically outside India for more than 182 days it is safe to presume your status as that of Non-resident and apply the regulation accordingly. However, since you do not need to repatriate any money abroad, there is no violation of regulation in spirit. NRIs are permitted to invest in Stock market, without RBI permission, but only subject to certain procedure. For procedure you are advised to contact any registered broker in recognized Stock Exchange in India. It is not correct to operate with 'Resident A/c' yet have NRE Account with bank. This is inconsistent.

2. What is the remedy if I need permission from RBI for investing in Indian stock market? Please answer keeping in mind the Merchant Navy background of my query.

As said in the previous query, you do not need RBI permission to invest in Stock Market in India at all. Just contact the registered broker. He will take you through the procedure, subject to which you have to do the transactions.

I have funds in my NRO account which I wish to invest in India. I do not want to invest in any kind of mutual funds. What other options are open for me currently aside from bank FDRs?

Legally, in terms of foreign exchange regulations, you are permitted to invest in both repatriable and non-repatriable investments options such as mutual funds, stocks, and deposits, provided you comply with investment conditions and procedures. Normally, these options need remittance in foreign exchange or investment out of NRE Account. This being the general answer, we suggest you may seek an advice of a Financial Advisor for appropriate investment.

I am a US citizen living and working in India for the past 14 months. I have a PIO card and residency permit. Am I allowed to invest in Stocks and Mutual Funds? If so, can I repatriate it?

As PIO you are permitted to invest in Stocks and Mutual Funds. For procedure, please be guided by a registered Stock Broker in any Stock Exchange, who shall guide you for investment and repatriation procedures.

I like to buy property/land in India and sell within one year. Can I use my Citibank NRI account for sending money for the transaction and also getting the money back when property is sold? How long I need to hold the property before selling it?

The land should not be agricultural / plantation / farm land. In order that the sale proceeds of property (residential / commercial) is later on repatriable, you must acquire the property by remitting foreign exchange into India by wire transfer or by debiting NRE Account only. There is no minimum lock-in period of property, although tax laws may require minimum holding for 3 years to get advantage of long term Capital Gains.

Is permission from Income Tax dept. & RBI permission required for repatriation of sale proceeds of self-acquired property? What documentary proof is to be submitted to my bankers in support of my claim for repatriation - indicating forex remitted for purchase of property? As the property was purchased more than 10 years ago I don't have relevant bank statements or chq book details.

If the property is purchased 10 years ago, then even if that was purchased using rupee (not foreign exchange) it is eligible for repatriation. You may write to the bank that it was purchased from remittance in foreign exchange from abroad and the proof that it was purchased 10 years ago. That is sufficient for repatriation. I am assuming that the property is not agricultural or plantation or farm land.

Is a liaison office in India allowed to open an EEFC account without the prior permission of RBI?

A liaison office, by definition, cannot entertain any commercial activity, and, therefore there could be no EEFC account with RBI permission.

I have lived in Gulf for 17 yrs and intend to return to India. Do I need to relocate my savings to India, will the interest be taxed, if I have FC commitments what do I do?

It is advisable to repatriate earnings to India, as long as you desire to return to India for good. No need to pay tax on such repatriated capital part, earned while you were abroad. However, any accretion on such capital will be subject to Income tax in India.

I am a NRI owning self-acquired property paid for in INR. It was purchased 8 years ago. Can I repatriate the total sale proceeds eventually if I sell the property now & retain the total proceeds in my NRO account for another 2 years i.e. total lock-in period of 10 years?

You have to retain the total sale proceeds in any permissible deposits for another 2 years, as property purchased in INR suffers lock in period of 10 years.

I have property in India which I want to sell and would like to get the proceeds transferred to my US account. How can I do it legally?

If the property is acquired as per Foreign exchange Regulations [(a) it should not be agricultural / plantation / farm house (b) it should have been acquired using foreign exchange or by debit to NRE A/c]. Then, it is permissible for you to repatriate the sale proceeds, seeking bankers' assistance for simple procedures.

I am NRI and have purchased a land with my NRE A/C last year in May2005 for 7.5 lakh. However, I have not filed the details to RBI in form IPI 7 within 90 days of purchase since I was not aware of this rule then. It is now 1 year .Do I need to and can I still file to RBI and what is the amount of fine to be paid for delay? Am I legally wrong for delay and what satisfactory reason can I give for delayed filing of form IPI7 to RBI now, if I need to?

There is no need to inform RBI, if the acquisition is by individuals. IPI 7 is no longer in force. I am assuming that the land you had purchased in not an agricultural or plantation or farm land. If you satisfy this, then later on repatriation of sale proceeds it is enough for you to prove to the banker that you had acquired the said land as per regulation using foreign exchange or through NRE Account. So do not worry. No delay or penalty arises.

I am an NRI planning to invest in India through remittances which I will get it from my friend abroad. How can I pay him back by repatriating the amount from NRO account after two months which I will get from my family in India?

We need more specific details for answer. What is the nature of Investment in India? What are the terms of loan? Normally, private External Commercial Borrowings are not encouraged.

Follow-up

I want to take a personal loan from a bank in UAE to make a home in India. If I am terminated from job, I have to pay back to the bank to be able to leave UAE. How can I bring money from India to pay off my loan in UAE bank? Can I take a loan from India to pay off my loan in UAE?

Purchasing property by NRI in India using foreign exchange is permissible. But, such purchase shall be out of earned own funds and not out of loan taken from another source (in this case loan from UAE Bank). This would be external commercial borrowings for you to invest in property in India, which is not permissible.

I would like to buy a house plot in India. I am an Australian citizen and Indian PIO. I can send cheque to buy the property. Is there any form need to be submitted to RBI? If so, where it is available? What is the registration process in India? Can the seller register on my name in absence?

There are two legal aspects to this Query: One foreign exchange and other law relating to property registration (the procedures of registration, power of attorney, stamp duty etc). As for the second aspect you need to consult a local attorney who does that with Sub-Registrar's office. Your presence need not be there personally, as long as there is a Power of Attorney. But, procedures differ from state to state.

As for Foreign Exchange law is concerned, it is permissible for PIO to buy any property other than agricultural / plantation or farm land. You can remit money in foreign exchange or by debit to NRE Account. No forms are necessary.

My mother sold property two years back inherited from my father. She paid taxes and filed the income tax return. The money is still there. She is a NRI living with me in USA. Can she repatriate the money to USA? What form she need to file with RBI and what kind of documents she needs to provide?

Your mother needs to approach banker seeking repatriation of sale proceeds of inherited property, producing the needed proof for both inheritance and sale proceeds of such inherited property.

I am currently US citizen, person of Indian origin. I want to know the maximum amount of Inheritance can be repatriated to US dollars.

Inherited property up to $ 1 million is permissible for repatriation.

I have inherited fixed deposits and savings accounts from by father. I am currently US citizen and person of Indian origin. Can I repatriate these accounts to US dollars? If so do I need RBI permission and what other formalities need to be complied with?

You can approach your bankers seeking repatriation of "Liberalized Remittance Facilities" available for PIOs on assets acquired by way of inheritance". You need to furnish documentary evidence in support of inheritance and regular certification of tax compliance. No RBI permission is needed as general permission is made available by RBI.

Can a resident Indian send money to US citizen/resident as gift in US dollars? If so, how much they can send and is there any gift tax for the person who sends such money?

Gift to close relatives up to US $ 5,000 per calendar year is permissible, subject to certain procedural compliance with bankers. You may approach your bankers for needed procedural compliance.

I am a NRI who purchased a property in India 10 years ago out of rupees only. Can I repatriate the total sale proceeds into dollars if I sell now after paying applicable taxes?

Net of taxes, as may be applicable, you can repatriate property purchased in Indian Rupees (not being agricultural, plantation or farm house) held for 10 years or more. For procedures approach your bankers.

I am a foreign citizen (of Indian origin. I have a PIO card) and shall be working in India for an MNC and drawing a salary in Indian Rupees. During my stay outside of India, I had taken up student loans from my home country to help fund my education. Now, I have to start repaying those loans in dollars. I would like to know if as a foreign citizen, can I get my monthly salary (which I will be depositing in a NRO acct) converted to dollars and if so are there any restrictions, special conditions I should be aware of?

Once you are employed in India by an MNC you can be paid salary only in Indian Rupees. However, if you are employed by the said MNC, abroad and posted on deputation to India for a brief term, your salary as per contractual arrangement can be remitted in to your account in dollars.

I got about Rs. 50 lakh through employee stock options. I'm an NRI. What avenues are available to me to convert this amount into US Dollars and transfer these funds to US?

Subject to the terms of Employee Stock Option Scheme, you can sell these shares and repatriate them through bankers. Contact any registered broker for procedures.

I am a NRI who purchased a residential property in India 11 years ago using forex (NRE account) of Rs 65 lakh. Today I can sell it for 1 crore. If I sell it now can I repatriate the entire 1 crore sale proceeds net of taxes? Or I can repatriate only Rs 65 lakh of original investment made?

You are permitted to repatriate the sale proceeds to the extent of foreign exchange invested only.

I am a US citizen of Indian origin. I have an inheritance in Indian rupees that I would like to convert and transfer into my US bank account. The amount is roughly Rs. 40 lakh and is in a bank in Mumbai. Is this possible and what is the best way to do a bank transfer from India to a US bank?

The answer depends on what is the inheritance. If they are "assets" such as immovable property then you may approach bankers for remittance of sale proceeds of assets inherited from out of NRO Account, with documentary proof for such inheritance and tax compliance procedures.

I need to know whether as an NRI I can have a demat account with NRO or resident account and do online trading. Or, do I need to open a trading a/c as an NRI only?

This is a matter of procedure, best left to capital market regulator and its registered stock brokers. This is not governed by Foreign Exchange law. Therefore, you may get advice from any of the registered stock brokers.

Please confirm if it is correct that a resident Indian individual can remit up to USD 25000/year for any purpose? If yes, which is the relevant RBI circular allowing this transaction?

Yes. You may verify A.P.(DIR Series) Circular No. 64 of 4-2-2004.

I am a PIO from the UK with dual citizenship. I want to set up a 50:50 financial consultancy with an Indian resident. The proposed venture, based in India, will provide consultancy primarily to NRIs worldwide. From my internet search, I gather that financial consultancy was excluded from minimum capitalisation requirements through an RBI clarificatory circular in 1998 but a 2003 circular has brought back the minimum cap clause for NRIs. Can you tell me the latest regulatory position in this regard?

Foreign investment in financial services is classified under Non-banking Financial Services category with various sub-limits and conditions. You need to look at the FDI Policy on that.

If I invest $10,000 in the Indian stock market through my NRE a/c and then make a profit of Rs 50,000, can I repatriate the $10,000+ Rs50,000? In other words is capital gains repatriable overseas or just the principal amount?

You can repatriate the capital gains, subject to transaction tax, for which you can get advised by a registered stock broker in any recognised Stock Exchange.

Can NRI /PIO purchase farm houses?

No.

My mother is NRI now. She has fixed deposits in Indian bank which she inherited from my father through Will. My father passed away two years back and these deposits are maturing soon. Can I convert them into US dollars? If so can you explain me the process?

NRIs are entitled to repatriate from out of NRO Account, inherited assets. You may approach bankers for repatriation from out of NRO Account, with documentary proof for inheritance and the nature of assets.

My son went to the UK as a student in 2002 and is now working there after graduation in 2004. What about his investments in MFs and can he continue to invest in MFs as an NRI? What happens regarding his savings account held over last 15 yrs while he was not an NRI?

All those assets purchased by your son (presently non-resident by status) while he was resident can be continued to be held. As for Savings Account is concerned, he can re-designate them as NRO Account, since he has now become Non-resident. As NRI he is permitted to invest in domestic Mutual Funds.

My mother and her family lived in India for over 30 years, and she grew up there in the 1930s and 40s although they were not citizens. I am an American citizen and own stock in India which the family had in that time period. It is still frozen and cannot be sold with the proceeds brought to the US due to lack of currency convertibility. My mother is elderly and in need of the money. Is there something I can do to access that money, whether a hardship application or a loan against the stock? And although I was once considered an NRI, is that still correct under current definitions?

Facts are not clear to understand your legal residential status. Were you or any of your parents or grandparents, at any point in time, Indian citizens? If so, then your mother status is PIO and repatriation them can be considered. Please help us with clearer facts to further support you.

Follow-up query

To the best of my knowledge, my grandparents lived in India for about 50 years. My understanding is that they were British subjects, each having been born in Iraq in 1875 and 1895 respectively. My mother was born in Iraq in 1930 and raised from a baby in India. She attended Elphinstone College and graduated from there. She did not leave until the late 1950s. Due to this, her accounts for all these years have been NRI accounts (her demat and NRO account, for example, as determined by financial institutions.). I was born in New York in the 60s and my joint demat account with her was issued by the brokerage listing me as an NRI.

As she is elderly and in need of these funds, I wish to access them for her if possible. I expect there may be a hardship basis available in such matters.

The facts suggest that your mother acquired the currency / financial assets while she was a "resident" in India. You may approach banker for remittance of such assets from India. However, there could be two situations on the facts peculiar to this case: (i) Due to elapse of very long time, the banker may ask you to procure express RBI approval. (ii) Repatriation of sale proceeds of immovable property, if any, may require specific RBI approval. It is recommended that you may take up the matter with banker with supporting documents to the extent available. The funds being legitimately your mother's can be repatriated.

As an NRI we bought sites at Bangalore. Are we to submit IP 7 forms to RBI within 90 days of registration of property? What is the lock in period and process for repatriation on sale? Is the repatriable amount has to tally with the value given in the title deed?

I presume the 'sites' you have bought are not agricultural / plantation / farm house sites. There is no IP 7 now to be submitted to RBI. There is no lock-in period for repatriation and sale could be done any time, and repatriation sought, subject to compliance with tax laws. Yes, the sale proceeds sought to be repatriated shall be the value mentioned in the Sale Deed. However, repatriation shall be limited to foreign exchange brought into the country for acquisition of property only.

I am an NRI and recently bought a site in Bangalore using money from my NRE account. I have few questions on this and I really appreciate your help.

1. Can I repatriate the money to US if I sell this property? Can I repatriate both principle and capital gain?

If the site purchased is not an agricultural / plantation / farm house, then it can be sold and repatriated to the extent of foreign exchange utilised for such acquisition.

2. When purchasing this property my father-in-law had acted as my general power of attorney. I sent the required money from my NRE account to his account in India and he in turn paid the seller by DD. Would this cause a problem for repatriating the money to US because I did not pay the seller directly? I have records to show that I sent money to my father-in-law and he paid the seller from the same money.

There is nothing in the regulation directly covering this kind of situation. However, it should not be a problem, as long as the bankers are convinced about use of NRE money to buy property for you.

I am interested in forex trading through the Internet. I want to know whether it is legal for a resident Indian to do forex trading. Do I have to get approval from any Government agency to do the same?

Residents are not permitted to undertake forex trading.

My Boss is from Korea (foreigner), he come to India in Business Visa, in this case.

1. How much is the limitation of cash withdrawal from his personal A/c (Operating in Korea) in India?

As long as he is withdrawing from his personal account operating in Korea, he can do so at his will, without any limit. However, I am assuming that if he withdraws cash from Indian branches, they will get their dues from Korea directly.

2. Whether he can use his Korean credit card in India? If yes, is there any legal problem or withdrawal limitation?

Yes, if this is acceptable to Indian banking system. Again I assume, as in the previous answer, that if he withdraws cash or spends through Korean credit card, the Indian banking system will get paid in foreign exchange from their Korean counterpart.

I jointly own a house in India with my father. We are in the process of selling the house and my father will be gifting me half of the proceeds. As an NRI can I repatriate that money in USD via my NRI bank account? What kind of documentation is needed? And are there any limitations? Also, can my father deposit a rupee check to my NRI account in India as a joint owner of the account?

The issue contains two parts: Repatriation of your portion of ownership & repatriation of gift. Firstly, if you had acquired the property as per regulations, you are permitted to repatriate to the extent of foreign exchange utilised for such acquisition. If the property is acquired out of rupee resources, then if such property is held for 10 long years, repatriation can be done. As for gift of money is concerned, up to $ 5,000 per calendar year each resident can gift to non-resident relative. For procedures, you may approach remitting bankers.

I am an NRI. I am moving back to India. What should I do to maintain the rupee checking account?

You just need to inform banker after your arrival and becoming resident so that your non-resident rupee account is re-designated as regular account.

I am an NRI. I want to open a new business in India. How would I get finance? I want to settle down in India with my own business. Can banks give me loans?

The query is too general. The general answer is for a resident (you become resident when you settle in India) doing business in India, banks in India do lend money. It depends on host of commercial aspects such as priority lending, nature of security, nature of business, etc. If you share those details with banks, they will be able to guide you on this.

My husband and I have bought a property in Bangalore on an NRI loan. We are at present contemplating taking up British citizenship. Could you let us know if this will have any impact on our NRI loan (from HSBC bank)? Also, would taking up a foreign citizenship automatically make us PIOs?

No implication on your changing citizenship, although you need to inform bankers about that. Foreign citizenship of a person holding Indian passport at any point in time would make him PIO.

We are manufacturers of electronics goods and our head office is in Korea; now we have opened liaison office in India. As per RBI sanction letter it is clearly mentioned that "i) Except the proposed liaison work the office in India will not undertake any activity of a trading commercial or industrial nature nor shall it enter into any business contracts in its own name without our prior permission." In this case can we provide free service to our distributors in India for damaged electronics items?

Yes, but with RBI permission only. It is advisable to take a safe route in complying with RBI approval as "service" arrangements are 'commercial', regardless of whether one receives compensation for that are not.

I have come to India in business visa. I am not an NRI, but a foreign citizen. Can I open bank account in India?

A foreigner on a short term business visa, without opening an account in a Bank in India can remit moneys through banking system.

I want to transfer large amount of cash (rupees to dollars) from India to USA. How should I go about it and what are the fees involved?

Such transfers are possible only through normal banking channel, by wire transfer or other mode adopted by Banks, subject to compliance with banking procedures.

Can an Indian company give guarantee for a loan being taken abroad in the name of its subsidiary company being opened abroad?

The guarantee can be given within certain financial limits as per Overseas Direct Investment regulations. The Indian Company shall comply with the Foreign Exchange Management (Transfer or issue of any foreign security) Regulations, 2000.

How much amount can a person take with him while migrating from India to another country on PR Visa?

There is no such specific limit for such category of persons. However, as a resident before leaving India, you are permitted to pay for your expenses such as travel, initial expenses. You may also use foreign exchange to the extent of US $ 25,000 as resident for any purpose. Thus, there are liberal regulations for remittance of foreign exchange, and, if specific purpose and source is known, we can support you better.

I am an Indian citizen and likely to migrate to Canada under investor category. How much amount I can take to Canada or any permission is required for transfer of funds to Canada i.e. equal to net worth of an individual or more?

Once you become NRI then you can remit your assets in India as per liberalised remittance facility for NRI from NRO Account to the extent of US $ 1 million per calendar year, subject to conditions specified. For procedure you may approach banker.

I am now a US Citizen of Indian origin. I had bought a residential land in Chennai out of Indian Rupees when I was a resident Indian (i.e. prior to migrating to the US). The property has been held for more than ten years now. Can I sell this property to a NRI or can I sell only to a resident Indian? Can I repatriate the sale proceeds to US?

You can sell the property -- to a resident or non-resident -- and repatriate since the property purchased in Indian Rupees is held for 10 years or more now. However, NRI buying the property should comply with regulations for acquisition of immovable property in India.

I have sold my property in India. It was held for 4 years. Half the funds were paid from NRE a/c and half from NRO a/c. I wish to repatriate the funds paid from NRE a/c. What is the process? Also I do not have a PAN number. I am an NRI.

You may approach bankers. To the extent of foreign exchange invested in property you can repatriate giving details to bankers.

Can a liaison office apply for Import Export Code? If yes, is RBI permission needed?

Liaison Office cannot do any 'commercial' activity, and, as such applying for Import Export Code does not arise.

Follow-up query

For importing Promotional items, can we apply for the IEC Code?

You may approach an expert in Import / Export Policy aspects. Any import into India can be done only with Code number.

Is it compulsory for a NRI to use only a NRO account for his Indian banking requirements? Can he continue maintaining & operating his Indian resident accounts (savings account) after becoming an NRI?

Once a resident becomes a non-resident, he is under obligation to inform bankers to designate his Indian resident savings account into NRO Account. It will be factually incorrect to maintain 'resident' status for banking transaction for a person who has become non-resident.

Though I am a NRI I still have a joint (either/or) resident account with my sister. I am in the process of getting the account re-designated as a NRO account. Can my sister still remain a joint account holder of the NRO-designated account after conversion even though she is a resident & not a NRI?

NRO Account may be held jointly with residents. For procedures, you may contact bankers.

I am permanent resident of Canada and holding an Indian Passport. I bought Kisan Vikas Patra in India before becoming permanent resident of Canada. After two years I'll become Canadian citizen. Should I withdraw/transfter KVP befor becoming Canadian citizen? Or is it okay to keep as an investment even if I'll be Canadian citizen?

You cannot make further investments in Small Savings Scheme as a non-resident. You are not permitted to repatriate the sale proceeds of KVP. For the investments you have already made, you may continue holding them till maturity period, subject to the terms and conditions of KVP issue.

I am an NRI living in Melbourne, Australia. My parents in India have recently sold our family home and I am supposed to receive a share of it as inheritance. I would like to know how it would be possible to transfer those funds overseas. Please advise the procedure and time frame involved.

Yes, certainly. You may have to take the proof of inheritance and your share of sale proceeds (net of applicable taxes) to your bankers seeking remittance. They are permitted to remit sale proceeds of inherited property.

What is 100% subsidiary company? If a foreign company wants to form a Pvt. Ltd. Company in India as 100% subsidiary company then one Indian director should be there or not?

100% subsidiary means the entire shares are held by the holding company only. But, technically, in terms of the Indian Companies Act, there shall be at lease two members in a company. So, some minimum shares has to be held by the second shareholder. Directorship is different from shareholding. There can be a foreign company (100 percent subsidiary, subject to Indian Companies Act) with two foreign directors only.

Can a non-resident Indian can open a demat account? If yes, then what are the charges for opening and maintaining this account? How this account can be operated? How can we buy/sell shares? Can one send emails to advice on these purchase/selling of these shares instead of sending written advice in this regard?

Foreign Exchange law permits buying / selling of shares by NRIs. The procedures are left to registered Stock Brokers in any recognised Stock Exchange in India. So, you may contact them for procedures for trading in Shares.

I am a PIO cardholder and wanting to borrow money from bank for home loan or plot. This is what I read:

Q. I am a foreign citizen. However I am a person of Indian origin. Can I purchase an immovable property in India?

A. Yes, you may. There is no distinction made between you and an NRI with Indian citizenship. All the benefits stated in the answers above, will also be available to you. Only one small difference. You have to intimate RBI (in Form No. IPI 7), within 90 days from the date of purchase. Also, you have to invest either from:

# Remittance from abroad through normal banking channels.
# NRE account in India.
# FCNR account in India.

My question is: Can I borrow from bank?

In general banks in India are permitted to lend to NRI / PIO, but the commercial judgment of lending to a particular borrower is left to their discretion and merits of the case. So, you can borrow from bank.

Can we register 100% subsidiary Company in India without having any Indian Member & Directors (i.e. with 2 Foreign Members & Directors only)?

Yes. But the process is critical. Under the Indian Companies Act, there shall be at least two members for any company. This way, technically, 100 per cent subsidiary company is not possible. At least 1 share shall be held by the second shareholder. So, normally, 100 per cent subsidiary by foreign companies are formed by having one nominee (usually employee of foreign shareholder such as MD or CEO or President) to hold a few shares (say 10 shares) and all the remaining (99.999% or so) shares are held by foreign shareholder.

Shareholding is different from Directorship. In so far as Directorship is concerned, all the Directors of an Indian Company can be foreign director, although it would be administratively convenient to have a local person (or foreign director working in India as an expatriate) for discharging legal obligations.

Follow-up query

You have mentioned in your mail that "At least 1 share shall be held by the second shareholder". Is it compulsory that the second shareholder must be an Indian? Can we form a 100% subsidiary company with out having any Indian shareholder?

Even the one shareholder can be a foreign shareholder. You can form a 100% subsidiary without having any Indian Shareholder.

I am an NRI settled in Australia. I am in the process of buying a plot of land in India which is planned to be located in a new estate and purchased off the plan. I have already paid two installments and third one is due in a couple of months, which should coincide with the allotment. Could you please advise if there are any formalities involved to fulfill various statutory obligations as an NRI? I also wish to retain the option of repatriation of funds arising from the proceeds if I ever decide to sell the plot.

There are two main conditions you have to fulfill for repatriation on sale. First, the plot should not be agricultural / plantation / farm house. Second, the purchase consideration should be paid out of foreign exchange brought into India through normal banking channels or out of NRE Account. Beyond this there are no special obligations under Foreign Exchange Law. You may have to register the property in your name, subject to local law and allotment conditions, if any.

I have an NRO account with Citibank. I funded that account with $25000. Now I want the money back in USA. How can I repatriate the amount that I funded from USA? Is this legal? Whom should I contact for this?

You may contact your bankers for repatriation. Remittance out of NRO Account for any bona fide purposes is permitted under Foreign Exchange Law.

We have opened liaison in India. We want to know whether we have to submit any documents to ROC after getting the RBI sanction letter.

Yes. Foreign companies having place of business in India shall do the prescribed filings U/s 592 of the Companies Act. For procedures please do contact your company law advisor.

I believe I can draw from my NRO account to pay for Tuition and Educational Expenses of my son, who will go to college this fall in the US. Please advise on the paperwork to be done for withdrawal of NRO account funds in US$ for this purpose.

You may contact you bankers for remittance towards educational expenses.

I became US citizen recently. I also have PIO card (Person of Indian Origin). Can I buy property in India? How about buying agriculture land from farmers?

The property you propose to buy shall not be agricultural or plantation or farm land in India. You can buy residential or commercial property using foreign exchange remitted into India or by debit to your NRE Account.

Is there a brochure from RBI, which talks about all the details of real estate rules etc. like who can buy and what's the Indian legal system etc?

Indian legal system with reference to Real Estate cannot be found in RBI. However the following two literatures may give you specific limits, procedures with reference to Real Estates: (i) Notification No.20 or Master circular on Foreign Investment. This circular mentions in its Schedule the NRI investment in Real Estate. (ii) Press Note # 1 (2005 Series) regarding FDI in Real Estate.

I have an NRI and an NRO Account with ICICI Bank. Is there a limit on cash withdrawal from any of these Accounts while I am in India? If yes, what is the daily limit on cash withdrawals?

There is no NRI account. Is it NRE? Anyway, as per regulations local disbursements are permissible from out of NRO Account. For procedures check with your bankers.

How much of foreign exchange (out of tax-paid income) can be person migrating to Canada from India carry?

Specific purpose is required for support. Generally, a Resident who is settling abroad for good is permitted remit assets from India up to even $ 1 million. But, if the specific purpose and the nature of tax-paid income or assets are known we can support better.

My brother, who is a PIO living in Australia, wants to gift his flat in Pune to my son, an NRI, who lives in the USA. The flat is for my use. Could the flat be sold some time in the future and the money repatriated to the USA.

Yes, general permission is available for such a gift. The donee (the person to whom it is gifted) may sell and repatriate the proceeds later, to the extent of foreign exchange utilised for acquiring the property by original owner.

I am a NRI with Indian Nationality/Citizenship. Am I permitted to open a resident demat account and operate the same as an Indian resident? Please note that I am an Indian National/Citizen by birth and have not renounced my nationality.

As per Foreign Exchange law is concerned you are permitted to trade in Stock Market. The procedures (such as Demat A/s etc.) are left to be handled with registered broker of Stock exchanges. Therefore, you should be advised on procedures by Brokers in the market only.

Follow-up

I am not clear with your response. My question is, "Can an Indian National who is also a NRI (by way of working abroad on contract) open a resident account or Demat account?"

No. By definition you are non-resident, and, therefore it would be factually incorrect to open resident demat account.

I live in USA. I have NRE and NRO accounts in Chennai, India. If I lend someone in Singapore $10000, can that person deposit the money (return) back in Singapore dollars in to my NRE account? Then it is becomes repatriable. Is this doable?

It is suggested that you may draw the money from out of NRE A/c and lend it abroad to borrower and get the money back from him and directly deposit into NRE A/c by yourself. Direct deposit by borrower should be avoided, as, NRE A/s is your personal deposit A/c.

About 6 months ago I wrote to my bank to redesignate my Resident savings account to NRO Account. My contacts in India inform me that bank is refusing to do so as my father's name appears as first account holder and my name as second account holder but the account is operatable by Either or Survivor. The entire corpus of funds belongs to me by way of credits for rents for 2001-2003, LIC and PPF maturity proceeds in 2005 and I have proofs. I do have a NRO account at another bank. Can I simply write cheques from my Resident savings account at first bank to my NRO account at second bank and then ask the second bank to remit these funds from NRO account to me in USA?

If ok to write cheques from resident savings account to NRO well and good; if not ok then what are my options to rectify the situation at the first bank to change to NRO account and then transfer to second bank on NRO to NRO basis?

It is possible to have NRO Account jointly with Residents. May be your bankers are insisting that you be the first mentioned A/c holder. Find out from them the procedure directly and get to know directly on what basis they are not re-designating the A/c as NRO. Once you do that we can support you better.

I am NRI in Saudi Arabia. A few years back I purchased a plot of land in Hyderabad by paying some amount cash and some by checks from NRE account, now I would like to sell the plot and deposit the amount in my NRO account for some time and want to use for routine expenses of my family over a period of time. Is it permissible to deposit the amount? And can we use it whenever it is needed?

From your facts it appears you do not intend repatriating this amount abroad. If you want to repatriate, then you can do so, if the plot purchased is as per regulation in force then, and the repatriation is limited to foreign exchange used for acquisition. If you desire to credit to NRO Account and spend for local disbursement in rupees it is permissible.

I run a proprietorship concern with a turnover of Rs 10 crore. May I open a wholly owned subsidiary abroad with the approval of RBI and how much money can I invest in the company?

Your proprietorship concern shall be a DGFT recognized Star Export House (export exceeding Rs.15 crore) per annum. Then you may through bank apply to RBI for necessary permission. If you fulfill this condition, then on your information, we can further support you.

I am an Indian national living in Chennai from birth. I am at present investing in overseas funds. I need a dollar account to transact on a daily basis? Can I have a dollar account with a bank? Is such a facility available in the banking industry? What is the RBI rule regarding this?

RBI rule does permit individual opening Resident Foreign Currency A/c only under limited situations such as going abroad on Studies, or to participate in Exhibition / trade fair outside India and not otherwise. You may approach banker stating your request.

I am currently residing in the US and have two queries related to real estate purchases and repatriation of funds.

a) I'm looking to purchase a residential property in India. However, I do not yet have an NRE account. I need to move quickly on the purchase, therefore, the builder suggests that I wire a down payment to him as soon as possible. Will this down payment be repatriable if I can furnish the wire transfer details to the bankers concerned?

Yes. It is preferable that you wire transfer the money through the same branch of the same Bank with whom you intend opening NRE A/c eventually. Obtain an FIRC [Foreign Inward Remittance Certificate] as proof for foreign exchange remitted into India for purchase of property. If foreign exchange is utilised for purchase of property, then it is repatriable to that extent when sale takes place later.

b) I'm aware that the original investment in a property is repatriable. However, recently when browsing the RBI website I came across a couple of pages which seemed to suggest that
i) if a property is purchased and held for over 10 years, the entire sale proceeds are repatriable or
ii) if a property is purchased and sold within 10 years, then the profits from the purchase can be held in NRO accounts for the balance period (for example, 7 years in case the property is held for 3 years) and then repatriated Is my understanding correct?

That part you have read is not applicable for your case where you purchase property through foreign exchange. That part is applicable for those who purchase using Rupee A/c who have to suffer lock-in for 10 years, which lock in is not applicable for you.

I am NRI/US National. Is it legal to own Farm Land for residential use in the states of Kerala and Karnataka?

The regulation does not permit owning Farm Land for any purpose.

I have come into the country with about 9000 USD, i.e. my salary savings and I want to deposit them in my NRI account (I am an NRI) What paper work do I need to do and which branch should I go to?

This is a procedural matter. You may approach the Banker and credit the proceeds complying with their procedures.

I am an NRI and I want to start a business in USA. I want to avail loan from a bank in India and bring the funds here to USA. What is the possibility?

If you are living in USA and an NRI, bankers in India are permitted by Foreign Exchange Regulations to lend moneys to NRI against suitable collaterals, which are normally given for business within India or property purchase within India. It is left to bankers' commercial judgment to extend loan to an NRI for business abroad. You may have to contact bankers to ascertain if they are willing to lend for such a purpose.

I'm NRI living in USA since 1990. In 1993 I've inherited a house after death of my father, since then house is vacant. I'm ready to sell it now. Please let me know if I can take the proceeds out of India.

Yes. You shall give the proof of inheritance to remitting bank. You are entitled to take the sale proceeds (net of taxes) to USA through Bankers.

What will be the status of Deposit held under NRE Joint Account if the spouse becomes resident in any one or more year(s)? The spouse is in India for the education of children and may or may not return abroad. Is it possible to delete/remove the name of the Resident spouse from such account so as to retain the deposit under NRE?

Joint A/c with resident is not permissible for NRE A/c. Accordingly, at your option, either the name of resident spouse can be deleted and the NRE A/c can be continued as a non-resident A/c OR the A/c itself can be treated as Resident A/c. The answer to your second question is in the affirmative.

My mother has nominated me for some money that is currently in RBI bonds. She is sick and may pass away soon. I am a U.S.Citizen. Here are my questions:

1. What kind of account should I keep the money in after she passes away?

First step is that you within your family, has to by legal means inherit the proceeds. This may involve some documentation with RBI. Initiate that process. Once you receive the money from RBI, you may deposit the money in NRO A/c.

2. Can I repatriate it in US Dollars and if yes, up to what amount?

Yes, you may repatriate the money from NRO A/c up to US $ 1 million, subject to procedural compliance with remitting Bank.

I have the following question about my NRE account. I am US citizen with PIO card. I am told that after residing more than 183 days in India, my status changes and I can not have NRE account anymore.

However here is information from RBI website on accounts by foreign nationals and foreign tourists:
3. Should banks have a separate system to monitor resident accounts maintained by foreign nationals in the absence of QA 22 account?

From exchange control point of view, no monitoring is required. However, the banks are free to put in place such administrative arrangements as considered necessary for a smooth conduct of accounts, especially in cases where it is likely that a request for repatriation of funds outside India will be made.

I will be moving back to US after some indeterminate time. However I would like to repatriate at least the funds that I initially brought in as and when I need without much hassle. What kind of account or "administrative arrangement" is available for this purpose?

Once you become a non-resident (that is you move out to the US) you may draw the balances in NRE Account, as per the terms of the Account. You can draw in foreign exchange from such an Account once you have become a Resident.

Whether the sale proceeds of shares can be deposited by the resident corporate transferee in the NRO Account of the NRI transferor by deposit of cheque in his NRO A/c?

If such sale proceeds are legitimate dues of NRO A/c holder, then depositing by resident corporate transferee in NRO A/c of the holder is permissible.

My grand parents from both sides were Indian citizen. My sister is an Indian citizen. I am a British Hindu Citizen; however I was born in Bangladesh, as a result my place of birth in British passport is Sylhet, Bangladesh. Can I open an NRI account and buy home in India?

First you shall obtain PIO [Person of Indian Origin] status by giving the necessary proof. Once this is done, as a PIO, you are entitled to buy Home.

I am quoting the relevant section of the directive from RBI for investments by Indian individuals outside India. In this context I would like to know whether an Indian citizen can open a dollar account with an overseas bank and operate it from India. I need this account to carry out the day-to-day transactions arising out of my investments. Please give me your opinion.

Indian citizen cannot open dollar account with an overseas Bank and operate from India. You need RBI prior permission for it. What the circular states is that if Foreign Currency Account is available for a Resident, then such an account may be used for investment and crediting return on such investment. It is an enabling provision, if Resident Foreign Currency Account is available as per Regulations.

However, up to $ 25,000 Residents are permitted to invest outside India for any purpose as stated in the circular referred by you.

Follow-up

Can you tell me how I can get prior permission from RBI for opening a bank account overseas? Is this a very difficult process? Is there any third party who can help me in getting this RBI permission? Please advice.

Foreign currency Account for residents is allowed only for limited specific purposes. We need to know your residential status and purpose of opening such account, before we can support you.

Can I operate both a NRE/NRO account & a resident Indian bank account simultaneously? In other words can I deposit my own NRE cheque into my own resident account? In this case in effect I would be transacting simultaneously both a NRI & local resident account? Does RBI permit such a transaction? Am I flouting any rules?

If you are an NRI, you cannot have a 'resident' A/c which is factually misleading. You are supposed to operate either NRE or NRO account (both for non-residents only) as per regulations governing operations of these accounts. You cannot operate any resident account at all.

Are there any penalties for a NRI willfully opening a resident account in India & not informing one's NRI status to local bank? In other words can I an NRI open a resident bank account in India & not tell the bank that actually I am a Nonresident?

The moment a person becomes non-resident, as per Foreign Exchange regulation, he is supposed to designate all his resident account into non-resident account. If you have not done so far, do it immediately. Penalty depends on the nature and the amount of contravention and is not possible to quantify without knowing transactions. Please designate the account as non-resident immediately.

On becoming a NRI I gave a General Power of Attorney to my sister in India. She was fully aware of my NRI status & was initially depositing my Indian income into my NRO account & also issuing required payments vide this account (thru my presigned blank cheques). Only recently I learnt that without my knowledge & using my power of attorney she has opened a Resident savings account in our joint names (without my signature) without informing the local bank of my NRI status. She willfully did not disclose my NRI status to the bank as if she had done so the bank would not have opened a resident account for a NRI. Now she is depositing all my Indian income into this resident joint account & making large investments in my name through this account. As all my income is going into this resident account I am unable to repatriate the same. Can I sue my sister for the above actions initiated by her? Has she broken any rules by her actions?

It is not known how without your signature, a joint account can be opened at all. Anyway, at this juncture please inform your bankers to designate your account status as Non-resident account, preferably with effect from the date from which you had been non-residents. This may enable you treat all investments as well as non-resident investment. But care shall be taken to see that whether, non-resident investments, all permitted in channels where investments have actually been made. The case requires thorough study, before regularisation. At any rate, suing your sister cannot absolve you of your personal statutory obligations, if any, for which you only are liable.

On becoming an NRI 15 years ago I had issued a General Power of Attorney to my sister in India to look after my Indian affairs. Today I am not satisfied with her handling my accounts. Can I revoke the GPA without having to give any reason for the revocation?

Yes. You may do so. But, before such drastic step, you should try and understand the entire investments and its nature, and take them all in your control so that you are aware of your complete assets in India. This would also enable you to deal with various avenues where investments are made to write to them about revocation of Power of Attorney.

Can a person with mental illness inherit property under Indian inheritance laws?

You are advised to contact a property law expert. However, 'Mental illness' can only be an incapacity to contract. Inheritance is a matter of operation of law. The person probably needs a guardian.

I am an Australian citizen and resident. I am of Indian Origin. I am planning to move to India for settling there either permanently or for living there many years. This will eventually change my status in India from non-resident to not ordinary resident to resident.

My questions are:
(a) When I move to India, can I invest in National Savings Certificate (NSC), MIS, and PPF etc?
(b) If, at a later date, I decide to move back to Australia, shall I be able to repatriate the original investment amount?

As per the present dispensation, the answer to both queries is in the affirmative. Residents can invest in NSC, MIS, PPF etc. On becoming non-resident, they can remit their asset in India, which include these investments.

I am a NRI since 1991. I have a resident account in India which was opened before I became a NRI which I have NOT designated as a NRO account. Recently I have deposited my own NRE chq into this resident account. Are there any problems with this transaction? Has this transaction violated any Forex/banking laws?

You can give proof of your becoming NRI and immediately designate the Account into a non-resident account. Non-residents on their becoming non-residents are obliged to designate their status, consistent with factual change of residential status. Otherwise, you may not be able to freely repatriate moneys on later date.

I am a NRI based in Singapore for the last 15 years knowing fully well that a NRI cannot operate a Resident account. Despite this if I open a Resident account in India deliberately not disclosing my NRI status to the bank have I broken any law & what are the penalties for this act?

The answer is contained in your query. If you "knowingly" not designate your account as a non-resident account, even while you are a non-resident, any contravention (this depends on the facts and circumstances of Transaction arising out this non-compliance) is liable for penalty up to three times of the quantifiable amount of contravention.

My daughter is an American and she has Indian PIO card. I and my wife are Indians. Can I invest on her name in mutual funds, bank deposits and shares?

Yes. You may contact bankers for bank deposits. They will treat deposits as NRO or NRE Account. Regarding mutual funds and shares you may contact any registered broker in recognised Stock Exchange for procedural compliances.

I am born, brought up and educated in Mumbai. I holding Iranian nationality; my mother and grand parents all are Indian except my late father who was Iranian. My question:

1. Can I buy residential property thru foreign exchange remittance with or without approval of RBI?

If you hold PIO (Person of Indian Origin) status, then you can buy residential property by remitting foreign exchange, without approval of RBI.

2. Since I am born in Mumbai am I not eligible for PIO status just because I am holding Iranian nationality. Then what is the importance of birth right citizenship?

PIO includes the person or any of his parents were born in undivided India. Therefore, you may apply with proof for securing PIO status.

I am a US Citizen and just inherited some money from my mother. She had invested in the 6.5% tax-free bond with RBI. I want to know if I can keep this bond in my name till it matures in 2009 or do I have to cash it in? Also can the proceeds be repatriated if I put it in an NRO account? Please advice.

Assets if inherited can be remitted from out of NRO Account after maturity. You have to produce proof of inheritance with remitting bankers in India.

I am a PIO. My parents want to gift a home to me. I have two options. Either my parents can sell the home and gift the proceeds to me or I can sell the home after I get it as a gift. At some point, I may need these funds for my retirement or kids' education. What is the easiest way to repatriate the proceeds?

The preferred option is for your parents to sell the property and transfer the sale proceeds, net of taxes if any, to you, so that you can with the proof of gift of money repatriate the moneys through bankers, after depositing the money into your NRO account to start with.

Can a NRI buy a urban property from a PIO (person of Indian origin)? What is the definition of PIO? Is a person who held an Indian passport before, but surrendered this and became an US citizen a PIO? If such a person is classified as PIO, can he be classified as NRI also?

Yes, an NRI can buy a property from a PIO. An Indian citizen who surrendered passport and became US citizen is also a PIO. PIOs are not NRIs (NRI continue to hold Indian passport), but the various avenues of investment available for both NRI and PIO are essentially same.

I have some fixed deposits in Indian bank in the form of USD. I can avail loan from that Bank. Can I use this loan to purchase land for resale purpose?

Yes, the loan obtained against NRE deposits Account can be used to buy property as per Regulation. The land to be purchased cannot be agricultural, plantation or farmland. You may later sell and repatriate to the extent of foreign exchange invested.

I am 75 years old. I was an NRI. During my status as an NRI, I got some fixed deposits in State Bank Of India that will be mature in the following years. My query is this can I reinvest these into simple term deposits with 8.5% (interest for senior citizen) without paying any penalty. I got a NRE fixed deposit of RS. 3,40,000, which will be maturing on 05-09-07. I want to reinvest it for next three years from today. Can I do it without paying any penalty?

Your query seems to be more from Banking Transactions, rather than from Foreign Exchange aspect. Bankers will be able to guide you as per RBI directives in this regard. As far as Foreign Exchange law is concerned NRIs are permitted to invest in Bank deposits. The commercial aspects of these Bank deposits, the details regarding availability of benefits to Senior citizen etc., penalty for pre-closure etc are governed by RBI directives to Bankers. Are you a resident now?

We have purchased residential plots in Bangalore 2 years back. We are currently residing the US but hold Indian citizenship. I would like to know the procedures and documents involved in sale of land.

I assume the land proposed to be sold is not agricultural / plantation / farm land. The land can be sold and the Sale Deed can be registered as per State law on the subject. The sale proceeds (net of taxes, if any) are permitted to be repatriated to the extent of foreign exchange utilised for acquiring the said land.

I am a NRI for past 4 years. Before 2 years without knowing that I am not supposed to invest on agricultural property, I bought an agricultural land in my name. After having known the fact now, I wish to regularise my case. Please advise the ways to do so. Is it ok if I continue to hold the property until I become resident Indian again? If not I would like to sell the land - do I have to pay tax for the money I get from selling the property? I bought this land from my NRE funds. Can the sale proceedings be transferred back to my NRE account?

NRIs are not permitted to invest in agricultural property. Having purchased in contravention to the regulation, you cannot repatriate the funds abroad. You may either hold the property and apply to RBI for regularisation. Alternatively, you may sell the property and not repatriate the proceeds. The sale proceeds have to be kept or spent locally.

I am US citizen. I have provided loans to my family members in India through proper banking channel. I would like to know possibilities of repatriating the money back to USA?

Give us more information to help you better. Loans from which account (NRO or NRE A/c) or direct remittance from abroad, for what purpose, what amount and on what interest rate?

Follow-up

I have given interest free loan from Direct remittance from abroad and from my NRE account. Total amount is around $40000.00. Please let me know the possibility of the repatriation of the amount.

If you had lent the money, interest free, to your close relative [defined under Companies Act], you can repatriate the loan amount of $ 40,000 only after 7 years. The additional condition is that the borrower has not utilised the said loan for agricultural / plantation activities or purchase of immovable property or shares or re-lending.

We are a group of individuals (3 NRIs and one Indian resident citizen) who are interested in investing in real estate in India. Our goal is to form a company, to acquire land on the outskirts of cities (specifically Hyderabad) and to develop it in to a township a few years from now, and to then sell individual plots cut out from that land. Prior to proceeding with this investment, we had some questions that we were hoping you could us with. If you do not have answers to these, could you kindly refer us to someone who can authoritatively answer these questions?

Questions 1 & 2 refer to sections of the "Master Circular - Foreign Investments in India; dated Jul, 2005" (pls see this link: http://rbidocs.rbi.org.in/sec14/64106.doc)

Master Circular dated July 1, 2006 is the latest. Kindly refer to that. Further, since your proposed objective is Real Estate Development, it would be relevant to verify Press Note No. 2 (2005), which squarely deals with this aspect.

1. There are certain restrictions on the type of property that NRIs can invest in in India. Buying agricultural land is one such restriction - it wasn't clear if this restriction is valid if we were not planning on carrying out any agricultural activity (like farming, horticulture, etc) on it. What is the definition of "agricultural land" in this context?

The structure of business as chosen by you is a limited company. You are not proposing to do Business in individual capacity. So, reference to restrictions that applies for individual investing in immovable property is not relevant considerations here.

2. Part-III, Section 1, Item (c) - places a restriction on repatriability. The way I read it, it applies to us as 'investors in a firm or a proprietary concern in India'.

Investment by NRIs in firm or proprietary concern in India suffers non-repatriability. As briefed in your facts, since you are going to form a Company, such restriction will not apply to you.

The following are general questions not referencing any specific document or circular:

3. Before launching the business plan and making our first investment, we would like to get a written confirmation/approval from the RBI stating that the investment is in accordance with the RBI rules and guidelines. Is this possible even if the investment is considered "automatic route" according to the Master Circular?

As per regulations in this regard, if the investment comes under Automatic route, then the regulations requires certain reporting, for which RBI would give an acknowledgment. This would take care of your need.

4. Is there a restriction on the number of such township investments that the firm can make? How many townships can the firm develop in parallel? How many townships can the firm develop in a year? Are there any requirements for minimum development that has to be done?

Kindly refer Master Circular of July 1, 2006 for comprehensive details as to development of township, housing etc.

5. What constitutes township "development"? Can the firm buy a large piece of land, and without any additional development (like water, electricity, roads), just mark out boundaries for smaller plots and sell those at a later time?

Kindly refer Master Circular of July 1, 2006 for comprehensive details as to development of township, housing etc.

Follow-up query

I was unable to locate a reference to "press note no. 2" in the 2005 or 2006 version of the master circular. Therefore, I could not identify the rules that govern the real estate business investments. Could you please send me a web link or a document which outlines this?

The web link is www.dipp.gov.in

I have a plan to go for business in India. What documentation is required for getting loan either from Indian or foreign banks?

It is assumed that the business is in India itself. If so, you may approach any bank for loan. These are subject to the commercial judgments of the lending banks.

I made a draft payment from my NRE account to Haryana Urban Dev Authority for a draw of land plots. I was unsuccessful in the draw. They have issued me with a draft. Can I deposit it back into my NRE account?

Yes. You may deposit the same with NRE Account, after explaining the details about refund of money to bankers.

I went abroad 6 years back & have taken foreign nationality as well OCI. Now I want to return to India permanently but keeping foreign nationality. Please guide on the following points

1. What will be my status as now I am foreign national with OCI: NRI / Ordinary Resident?

Since you wish to come to India for good, permanently, your status after your coming to India will be resident. For tax purposes tax advisor will advise you.

2. Within what period should I inform bank to change status of account?

As soon as you are India, you may inform bankers about change of status. This alone will be factually correct.

3. What will happen to my NRE- FD in INR which will mature after one year? Can I keep the FD till maturity & the interest thereon will be tax free?

Once you inform the bankers of change of status they will take care of procedures. You will get all the deposits + interest as per agreed terms and conditions.

4. Can I keep my foreign funds in my Bank account in foreign in $? Am I required to inform RBI for keeping foreign bank account?

You may approach banks in India for holding Resident Foreign Currency (RFC) Account since the funds were earned by you while you were resident outside India.

5. Can I continue my NRE account in bank as I am OCI?

You may inform bankers about re-designation of your accounts, since after coming to India you are no longer Non-resident to be eligible to hold non-resident Accounts like NRE Account.

I am a PIO (Canadian citizen). I had the savings A/C in UCO bank since 1988 and still maintaining it. Recently I sold the property in India and deposited all the proceeds of sell in the Savings A/C. From the same A/C I invest in the mutual funds and stocks. I file the I.T return regularly since I had rental income from the properties before ( I have PAN # ) do I have to change the savings A/C to NRO A/C ? do I have to inform the RBI / UCO BANK about it? at the maturity of the mutual funds the maturity amount will be deposited in the same A/C? can I use the money to buy the new property in India?

Yes, you have to inform UCO Bank about your non-resident status, requesting them to designate the Savings Account into NRO Account. If you do not do this, it would be factually incorrect. As regards your use of money to buy property in India, we need to know, when did you originally acquire the property you have sold recently and how did you acquire that (using foreign exchange or from local rupee account).

Follow-up

I had bought the properties in 1993 and sold it in 2005 .I had got the loan from HDFC for that, which is repaid in full in 1996. The money was deposited in the UCO bank savings a/c. Since I am PIO ( Canadian Citizen) what are the documents I need to send to UCO bank to chance the status of my A/C to NRO ?( Recently I have received my PIO card)

From your facts it is clear that you had used local rupee resources to buy property and, not foreign exchange. It is assumed that you had repaid such loan only from out of local rupee resources, and, not by remitting foreign exchange. Inform UCO bank about your status and furnish them the docs needed to change status of your savings into NRO Account. The bankers will tell you the documentation. Legally it is permissible.

Secondly, can I invest that money in IPO ( new issues ) from Canada. How I will get the information of new good public offers? Presently I had invested the money in MUTUAL FUNDS on long-term basis from this savings A/C but the returns are not that good as I expected, that is the reason I want to invest in IPO. PL. guide me on that.

Yes. You are permitted to invest in IPO. You have to be in touch with registered broker of any recognised Stock Exchanges in India. There are a number of portfolio managers and wealth managers.

Thirdly, can I invest that money (which I got from the sale of my old property) in the new property? I regularly file the returns for the savings A/C.

Yes. You may invest Sale proceeds in any new property. As long as you do not need repatriation of investment made in rupees, your further investment within India in another property is legally permissible.

I am a Singapore-based NRI owning a residential property in India bought out of foreign remittances. Can I sell the property to another NRI in Singapore & deposit the proceeds (Singapore dollars) into my NRE account & repatriate the entire amount after paying capital gains tax?

If the property purchased is not agricultural /plantation/farm house, then to the extent of foreign exchange utilised for acquisition you may repatriate the money, after depositing in NRE Account.

I have a business visa for going to the US, and have to go for US Medical Residency programme interviews in various US cities. How much foreign exchange I am allowed to spend for this purpose for hotel stays, air travel, travelling and F&B?

US $ 25,000 under Business Travel Quota.

Please let me know if it is okay to repay my home loan taken in India using the salary earned in US.

Yes, as long as money for repayment is remitted through normal banking channels (through wire transfer or swift mode).

My wife I and 2 children intend to migrate to Canada under investment category. As such, I shall now dispose off all my fixed and other assets. Please inform me how much liquid assets am I allowed to transfer to new country and what is the procedure?

I assume you are presently a resident in India. As a resident you are permitted retain or remit your entire assets as per regulation. For answering specifically, we need further facts as to nature of investments, amount of remittance to guide you more clearly.

Being an Indian resident how much money can I invest abroad?

There is a facility of US $ 25,000 which you may use for investing abroad. You may contact bankers for procedures.

Follow-up

I've heard from my friend that RBI has raised their limit from US $25,000 to $ 50,000 for an individual for investing abroad? Is it true? Please do advice me.

Under liberalized exchange facility it is US $ 25,000 -- an easy route, without much procedural hassles. The other route involves overseas direct investment by individuals, which has other conditions.

Can NRIs take Home loans from Banks/HDFC in Indian rupees for more than one residential apartment at the same time as an investment for resale later?

Up to two home loans can be availed, but repayment shall be made in foreign exchange so that repatriation of sale proceeds, after sale, can be made upto such foreign exchange utilised for loan repayment.

Can an Indian bank hold shares of a foreign company in my name (like one would keep his holding with some DP in case of Indian holding) if I am an NRI holding an NRE/FCNR account with that bank?

We need more clarity on the information contained in the query. The Foreign Exchange law regulates "ownership" rather than "holding". Accordingly, as long as you own the foreign security subject to and in accordance with the Foreign Exchange Law, the mere holding physically by bank is no issue.

I have a rupee checking account in India and would like to do term deposit in India. Is that possible?

Yes. You may contact bankers.

For the last 25 years I have been working in one of the topmost Engineering Companies in India and since the last 4 years I have been posted in a senior position in the same Company in USA. It is an open-ended contract and I have applied for Green Card. My salary is US$ 12000 p.m plus I also get a salary in India. I wish to buy a property belonging to my elder brother for Rs.50 Lakhs and retain the current tenants (MNCs) from whom the monthly rent receivable is Rs.45,000.I wish to assign the rent towards the loan EMI. The borrowers will be myself aged 53 and my son aged 21. Can this loan be raised?

It is permissible to obtain loan for NRIs. The terms and conditions are left commercial judgments of Bankers. However, if you wish to sell and repatriate sale proceeds of house you are proposing to buy now, then you must use foreign exchange to buy the house or else, repay the housing loan using foreign exchange remitted into India.

I am an Indian citizen by birth but have recently qualified for British Citizenship by naturalization (having worked in UK for 5 years after my MBA) and have been asked to complete the oath ceremony in next 2 weeks. However, I am now living and working in India and want to know what will be my exact status in India after I have completed the oath ceremony and have been awarded the British citizenship and till the time I can apply for a PIO or OIC card to the GOI? How long can I hold to my Indian passport and what implications will my new status as a British citizen have on current my job in India? What will be other implications relating to bank accounts? My wife continues to be an Indian citizen.

The answer comprises two issues:

One is immigration / passport related issues. This you may have to consult an immigration expert or immigration office or Passport office. It is likely that you may have to surrender the Indian Passport, after you get the British passport.

Second, is related to residential status and your position with regard to employment and bank accounts. Once you obtain the British Passport, your status will be Person of Indian Origin (PIO). However, if you are in employment in India, then you will be a resident in India for FEMA purposes. This legal position depends essentially on your number of days of stay in India and purpose of your stay. The moment you become a non-resident (that is you go back to UK for employment etc.), you need to inform bankers about change of status so that you designate your bank accounts as non-resident accounts.

Beyond this you need inform your employer about change of your passport details. There are no implications beyond this. Your other investment or transaction in India, after you become British National is subject to legal requirements, which depends on the facts of those transactions and investment.

Can I open a Bank Account in Australia with Citibank by transferring funds from my Citibank NRE account in India?

NRE Account allows remittance for bona fide purposes. You may contact bankers to get to know the procedures for remittance.

Is my understanding that only foreign currency can be deposited into NRE accounts correct? Can I deposit foreign currency into my NRE account when in India or is it a must that such deposits should be made overseas only?

When in India or by direct remittance from abroad, only foreign currency shall be deposited in NRE Account.

Under RBI regulations is it compulsory for a Non Resident Indian to close his resident Indian bank accounts (created before becoming an NRI) or could he continue with the same (without closing it or without having it converted to an NRO Account)?

It is not mandatory to close account on change of status. The non-resident needs to inform bankers to designate the accounts in to any of non-resident accounts.

I am a NRI based in Singapore. Can I buy a residential property in India in joint names with my sister who is an Indian resident? Can I pay for my share through NRE account & my sister pays hers through resident bank account as she is not a NRI?

Yes you can do that. However, if on a later day you decide to sell the property and repatriate the sale proceeds, you can do so only up to the foreign exchange utilised for acquisition.

How much foreign exchange can be brought by a person visiting India with and without CDF form? Kindly advice on the latest rules and their effective date.

This depends on Customs rules and not exchange regulations. However, we understand that any amount beyond $ 5,000 needs declaration.

When I purchase a residential land from an Indian resident (not a builder or company), should I file any paperwork with RBI? If so, how do I do it?

No paper work is needed. You shall remit foreign exchange for such acquisition.

My husband who is an NRI is currently working in India and earning in Rupees. The Rest of the family is in the US. How can we use his Indian salary to pay our mortgage in US and other monthly expenses?

He can approach banker to remit from out of his salary. 75% of his net salary (gross salary less contributions to PF etc.) can be remitted to his family from India.

I am an NRI and wish to know the following:

a. Can I purchase a property in jointly with my wife?

Yes. But, if you decide to sell the property later and repatriate sale proceeds, you should remit foreign exchange while buying the property.

b. Can I purchase a property in the name of HUF of which I am a karta?

Yes.

c. Can any single member of HUF purchase a property in the name of HUF?

The foreign exchange law does not prohibit this. As said above, foreign exchange shall be remitted (or debit to NRE Account) while purchasing the property.

d. From who can a karta of HUF can get a gift?

The foreign exchange law does not govern who shall be eligible to be the donor.

I would greatly appreciate if you could let me know whether I, being a NRI, can buy a land in my name in India for business activity.

NRIs are permitted to buy residential or commercial properties, if such property is not agricultural, plantation or farmhouse and subject to the condition that foreign exchange shall be remitted for such purchase (or by debit to NRE Account).

It is on the news that the Liberalised Remittance Scheme limit has been increased to USD 50000. I tried to find an amendment on the RBO website for their Circular #64 but to no avail.

I bank with Syndicate Bank which is Authorized from RBI to do foreign exchange transactions. How can I get a confirmation of this increase in limit in writing from the RBI? Or do I not need it and can straight away ask my bank to do the transaction for USD 50000?

Please suggest me on this issue. I would certainly appreciate a quick response since the calendar year is almost over and I would like to perform a transaction within 2006.

The liberalised Remittance facility available for Residents is not increased to US $ 50,000. As per circulars issued by RBI, after issue of first circular covering Liberalised Remittance Facility for Residents to the extent of US $ 25,000 [No.64 of 4-2-04] only twice the Transaction has been touched upon, one by 80 of 18-03-2004 & second by 38 of 31-3-05. It is confirmed that both these circulars have not made any upward revision of $ 25,000.

I am planning a ecommerce site for export of products from India. Most of the products are priced less than INR 500. I will be using Indian post for shipping. Please tell me if it is ok for me to receive money in INR for exporting the above goods.

Sale proceeds of all export of goods from out of India shall be received only in foreign currency, except in limited situations like export to Nepal, Sri Lanka etc. You may contact bankers for further procedures on the above.

I am U.S. citizen of Indian origin and I do not have PIO card. I want to buy a plot in India to build a house. Do I need to apply for PIO card or dual citizenship to buy that plot or I am still considered person of Indian origin, even if I don't have PIO card or dual citizenship. Will I be able to buy that plot?

You are a PIO by status (legal definition) regardless of whether you obtain the PIO card. You are permitted to buy subject to Foreign Exchange Regulations, by remitting foreign exchange or by debit to NRE Account, any plot (other than agricultural, plantation or farm land) to build a house.

I want to sell my property in India (Gurgaon). Please tell me how I can bring that money to Australia. What is the best, easy and safe way to bring that money into Australia?

If you are an NRI / PIO and the property (which is not agricultural / plantation / farmhouse) was brought using foreign exchange or debit to NRE Account, then the property can be sold and to the extent of foreign exchange utilised for acquisition, you may repatriate to Australia. For procedures, kindly approach bankers.

As a PIO, I know I am not permitted to invest in PPF, but what about my present investment and as the term of PPF a/c is of 15 years and I have completed 11 years on it (4 years are left on it)? Can I close the a/c in between? What should I do? Till last year I have shown this investment in my tax returns and no query has come from Income tax dept.

For closure procedure you need to approach bank dealing with PPF and do the needful by complying with the procedures. Yes, as PIO you are not supposed to invest in small savings including PPF. Your disclosure in Tax returns and absence of query from tax department is of no relevance. You shall immediately approach bankers for closure of PPF Account.

I am an NRI living in US. One of my relative in India would like to send me a gift thru money. What is the limitation of the gift money and does he need RBI permission?

Up to $ 5,000 can be remitted as gift from your relative in India. The donor shall approach bankers for procedures.

My brother is an NRI. He has an NRO account and a Demat account associated with it. He has ESOPs from his company. He wishes to vest them and sell them. The Demat account he has is a joint account in his name and my father's name. His company is insisting that they cannot vest ESOPs to a joint account. Is there some such restriction or is it the ignorance of the specific personnel from the company?

The issue is not governed by Foreign Exchange Regulation at all. Whether ESOP which is primarily for an employee, can vests in a Joint Account or otherwise depend on the terms and conditions governing ESOP which is purely the Corporate Policy of the Employer-Company concerned.

I have pension income in India. While browsing websites of banks I came across information that pension income in India can be repatriated. I would like you to confirm. If it is so, what steps I can take to do so.

Remittance of pension is permissible as per Foreign Exchange law. You may contact bankers for compliance procedures.

I am planning to work in companies providing paid emails and advertising in websites. Most of the companies are offering payments through Paypal, Alertpay etc like services. Are the above services accepted by RBI? How can I transfer money from abroad? What is the procedure? Do I need any license for this?

This is essentially a banking process issue to be checked with bankers for the authenticity with RBI. As per RBI rules, only payment through normal banking channels are permitted.

I am an NRI and am in the process of setting up a Biotech company in Tamilnadu, for the purpose of crating a bio fuel farm of cultivation, extraction and processing of jatropha plants.

In this context can I buy large acreage of lands and get them registered on a company name/corporate house?

Buying of the lands is purely from funds in India from my NRO Account. Any restrictions on this?

Under the Foreign Exchange Regulation, for carrying on business activity, the Project Company can buy lands, subject to compliance with other laws and regulations as may be applicable. If you are going to buy using rupee funds, repatriation is not permissible on investments.

I lived in US for 12 years and have recently relocated to India. Most of my savings are still in US banks. I want to buy a property in India with my savings. If I decide to sell the property after 1-2 years, can I take the money back to US if I decide to move back to US? What type of paper work I have to do before I move the money to India for paying for property? I have a NRE account but I will be converting it to resident account soon.

You have to use foreign exchange or NRE Account to buy property in India to be able to repatriate sale proceeds later. There is nothing that you should do now, except preserving the proof for purchase of property using foreign exchange or NRE Account.

I have a Citibank account here in US, however I am planning to move back to India and was wondering what kind of account I need to open in India while in US to transfer my money to India. I also want to know what is NRE account and how can I open it while I am here in the US.

If you are planning to move to India, you will become a resident. As a resident you cannot open NRE Account. It could be a regular resident Account. Transfer of your money is easy through Citibank itself. Just request them to open an account in India, and, thereafter transfer the money from your US Account to Indian Account with Citi Bank.

I have now acquired the status of an NRI? As resident I had purchased NSC and invested Rs 6 laks from my retirement benefits into 6 year term deposit with Post office with yearly interest pay out. To facilitate the credit of interest I had opened a saving bank account with the same post office. Today I visited the post office to request them to convert the saving account into an NRO account and also to treat the term deposit accordingly. I was told that post offices were not redesignating the accounts. What should I do now?

Redesignation is not possible by Post Office for one more reason that as NRI you are no longer permitted to invest in Small savings scheme. You should open a bank Account (NRO A/c). You should disclose your present NRI status to Post office to comply with their procedures or terms and conditions for foreclosing investments or other means suggested by them and transfer such balance to NRO account or invest in other permissible scheme. You may contact bankers for opening account.

Kindly clarify me whether NRI's are allowed to purchase National Savings Certificate or not. Different channels broadcasting different news and some are saying they can purchase and some are saying they cannot purchase. Kindly clarify my doubts regarding this.

NRI is not allowed to invest in National Saving Certificate.

I am an NRI living in Singapore and hold a NRE account in India. I have transferred money from Singapore to this account over 3 years. Can the money in this NRE account be transferred back to my bank in Singapore?
If yes what is the maximum amount that can be transferred?

Yes. From out of NRE Account remittances can be made outside India. For procedures you may contact your bankers with whom you have NRE Account

I am thinking of investing in mutual funds in India. Is there a website that has information of performance of the net asset values of the mutual funds? I am looking for performance history up to 5 years for these mutual funds.

To get latest NAVs you can visit www.amfiindia.com where you can access historical values also. To evaluate performance visit the site www. Valueresearchonline.com.There you will find performance of all diversified equity funds as well as debt. Schemes too.

I am enquiring on behalf of a friend. She is a German national living in UK She married to an Indian National (Indian passport holder), who sadly passed away in 1968. She inherited his property in Mumbai India. This property was later registered with RBI in Oct 1979. She is now negotiating the Sale of this property and seeking RBI permission to sell it. She wants to repatriate the sale proceeds to UK. I would be very grateful if you could advise me as to what sort of account she needs to open and how should she go about it. She will be very happy to open an account with Citibank.

Can I transfer my funds from Bank of Baroda NRI account into my CITI NRI account in India, since i want to close my Bank of Baroda account?

Once you are successful in obtaining RBI permission that is sufficient enough for bankers to implement the approval. You may sell the property and the sale proceeds can be deposited with any Indian bank you desire to repatriate from India. You may contact the bankers for necessary procedures in this regard

I am enquiring on behalf of a friend. She is a German national living in UK She married to an Indian National (Indian passport holder), who sadly passed away in 1968. She inherited his property in Mumbai India. This property was later registered with RBI in Oct 1979. She is now negotiating the Sale of this property and seeking RBI permission to sell it. She wants to repatriate the sale proceeds to UK. I would be very grateful if you could advise me as to what sort of account she needs to open and how should she go about it. She will be very happy to open an account with Citibank.

Can I transfer my funds from Bank of Baroda NRI account into my CITI NRI account in India, since i want to close my Bank of Baroda account?

Once you are successful in obtaining RBI permission that is sufficient enough for bankers to implement the approval. You may sell the property and the sale proceeds can be deposited with any Indian bank you desire to repatriate from India. You may contact the bankers for necessary procedures in this regard

My husband is working in abroad and I am staying with him (not employed there). I would like to get the information regarding my NRI status. As per the following schedule I went to abroad and return to India.

2004 - August I went to abroad (first time) and I returned to India 2005 August. Again 2006 - September I went to abroad and still i am living there.

I would like to know my NRI status for the financial year 2004,2005,2006 and also for 2007.

Kindly provide the details regarding my NRI status. And also am i eligible to invest in shares and National Savings Certificate. (if I am NRI).

If you have stayed in India for less than 182 days you will be treated as NRI.As per the details provided it appears that in 2005 you stayed in India for more than 182 days. For that financial year you are eligible for the benefit as available to resident.

Investment into equity market is allowed as per the threshold limit prescribed by the company. Regarding National Saving Certificate NRI's is not allowed to invest.

I am working in Saudi Arabia. I have open NRE account with ICICI bank to transfer my salary. Is this income is taxable in India?

No, it's not taxable

I have availed a personal loan from an UAE bank for a term of 5 yrs amounting Rs 25 lakh and used the money to invest in India. Now that I plan to return back to India to take up new employment offer there, I would like to know if there is any way that I could continue paying the EMIs for above against loan repayment for UAE bank from Indian banks.

You can repay the loan out of moneys earned at UAE. Your status will be resident once you take up employment here in India. Remitting a loan obtained from UAE Bank while you were in employment there by a resident cannot be done from rupee resources. It is also advisable to foreclose the loan account while you are there.

Ideally I would have liked to close the loan account, but as my funds are locked up in the investments in India made through an NRE account, I would like to know if the same can be repaid after I return back to India as the return of investments are to be credited to my NRE account which means it is not rupee resource if I am right? Please comment.

This is a freak case of investing through loan from abroad, which got struck and in the meantime the borrower changes residential status. It is advisable to repay even while you are non-resident, through NRE Account. As said earlier once you return to India, all your Non-resident deposit account shall be re-designated as regular resident account, and, thereafter there can be no NRE Account. After such re-designation it shall be only a rupee account.

Also, please clarify can I convert my NRI account to RFC account after permitted 6 months and thereafter remit for above loan repayments from RFC account in India to the UAE bank through DD or so.

RFC Account is permissible only in limited sense for residents, who temporarily visit abroad for studies or who receives any pension or any other superannuating or monetary benefits from employer outside India.

Is there any time limit to close the loan or can I repay it in normal allotted full 5-year term.

You need to apply through bank to RBI for special permission for remittance to repay loan of this nature for the full term.

I am a PIO living in the UK and in 1998 I received compensation, approximately 14 lahks, from a court settlement for land that had been misappropriated from my grandfather by distant relatives. My grandfather left India in the 1920's. My representative who was appointed by the court holds my funds in an escrow account. There is an issue regarding the capital gains tax, and this is currently under appeal, however, once this is resolved I hope to repatriate my money to the UK. Thereafter, am I correct that the following should occur

Receive tax certificate from Indian Revenue?

Yes you may do so.

My representative transfers my funds to a NRO account.

Yes you may do so, pending procedures set out in answer to Q 3.

Assuming I need permission from the RBI, can I or my representative in India can apply to the RBI for permission to repatriate. Note : I effectively inherited the consideration of the land from my grandfather, from whom possession was lost and therefore my father never owned it. In, which case does the compensation come under the heading of "inherited from a person who was formally a resident of India" as described in RBI circulars?.

This would not come under "inheritance" as there is a Special Court order where you have succeeded. It is perfectly legal because of the Order of the Court and there are two ways by which you can seek repatriation. Through your banker in India, you may apply to RBI for remittance of the funds that may consider the relevant documents such as Court Order and connected facts and allow remittance. Alternatively, the bankers may forward the application to RBI for instruction to remit money since this does not come under the generally permitted framework and a special case of remittance of long-drawn proceedings. It is advisable to approach bank and if need be through them RBI placing full facts.

RBI grants permission and transfer of funds through and agent/bank back to UK.

YES. RBI will consider all remittances, which do not fall under the general permission. Permission will be granted considering the merits of the case.

I am an Indian citizen living in US from last 10 years. I am planning to buy a real estate property in India, by taking an Indian bank loan and paying the installments with US dollars. Suppose I sell the property after 3 years, and the loan is not yet completely paid, can the entire sale proceeds (including profit), after paying the remaining loan amount and capital gain tax, repatriable?

As per the present dispensation, you are eligible to repatriate the investment made in 'foreign exchange' in acquiring the house from out of the sale proceeds. Kindly note that repayment of loan in foreign exchange (US $) is also treated as investment in foreign exchange.

Does this mean that profit is not repatriable?

More accurately, to the extent profit is equivalent or less than the foreign exchange brought in for acquiring the property they are repatriable. To the extent profit exceeds the foreign exchange utilised for acquiring the property they are not repatriable.

Detail procedures for repatriation of sale proceeds of residential properties bought in India by NRIs through NRE/NRO funds, as this area is still a bit vague in interpretation.

There cannot be a general answer to these. It depends on the facts of particular case.

If NRI invest in the property (as per regulation) in foreign exchange, the sale proceeds can be repatriated later to the extent of foreign exchange utilised for acquisition of property.

Repatriation from out of NRO Account (where the sale proceeds are deposited) is permissible up to $ 1 million.

For any doubts in operational aspects of these ceiling limits, you may contact your bankers. If specific transaction is mentioned, then the procedures will be clarified more accurately.

My parents are immigrating to Australia and will be selling inherited property (previously a bungalow now developed and is a flat) for approx. Rs. 85 lakhs. Will they need to pay Capital Tax? If so at what rate? Can they transfer all the sale proceeds to Australia? Can they go to a Bank and get a Draft made payable in AUS $? They regularly file their returns; do they need Income Tax clearance before they leave?

Yes inherited property proceeds can be deposited with bank (net of taxes) with an NRO account opened with the Bank and the proceeds (net of taxes) can be repatriated out of India from out of that Account, furnishing proof of inheritance, that the proceeds are out of sale of inherited property to bankers.

As an NRI in USA, I am getting conflicting information from different places. I would like to invest in mutual funds and stocks in India. Is there a bank (Citibank, ICICIC etc) that lets me open an NRE account, transfer funds from USA, and then invest in mutual funds through their website? Will I have to work with a separate broker to do the investment or can I do that on my own online through the bank websites (or some other websites)?

In case of NRI and person of Indian origin residing abroad, payment may be made by way of Indian rupee draft payable at Mumbai or by way of cheques drawn on Non-Resident (External)(NRE) accounts payable at par at Mumbai-and purchased out of funds held in NRE/FCNR Accounts.

All cheques/drafts should be made out in favour of the respective schemes/ plan. In case of Indian rupee purchased abroad or from NRE/FCNR account an account debit certificate from the bank issuing the draft conforming the debit shall also be enclosed.

Any further clarification you can visit the respective fund house site and follow the guidelines.

I have been living outside India since last 30 years. I have bank accounts and investments in banks over seas in joint names with my son who is also an NRI. He is being the first (primary) account holder of the account and I am the second. I now intend to return to India.

1. Can i still continue to be the second account holder of the banks over seas?

2. If my son remits money to me for my expenses in India when i have shifted here, will that be subject to tax.

I am British citizen of Indian origin planning to buy a property in India. (1) Can I apply for a bank loan to buy property? If I can, what is the procedure?

(1) Can I apply for a bank loan to buy property? If I can, what is the procedure?

It is permissible for PIO to get loan, implementation left to commercial judgment of banks in India. You may contact banks for procedure and willingness.

(2) I am native of Tamil Nadu. Can I buy property in any other state or are there any restrictions?

The Foreign exchange law applies to whole of India. You can buy in any other State.

(3) Can I inherit my parents' property in India?

YES. No law can possibly stop or not recognise your inheritance, which is your right.

(4) Can my children born in UK inherit the property I buy in India?

YES, of course.

(5) What services can Citibank offer to NRIs planning to buy property that they can't get in other banks in India?

Please check with your bank.

I am an NRI, in USA. I wanted to know how I could invest in Indian Mutual funds, me being in USA. It seems banks like Citi /ICICI does not offer demat a/c or even facility to buy MF for USA residents.

In case of NRI and person of Indian origin residing abroad, payment may be made by way of Indian rupee draft payable at Mumbai or by way of cheques drawn on Non-Resident (External)(NRE) accounts payable at par at Mumbai-and purchased out of funds held in NRE/FCNR Accounts.

All cheques/drafts should be made out in favour of the respective schemes/ plan. In case of Indian rupee purchased abroad or from NRE/FCNR account an account debit certificate from the bank issuing the draft conforming the debit shall also be enclosed.

Any further clarification you can visit the respective fund house site and follow the guideline.

A foreigner along with me wants to invest India to promote a township in chennai. Is it possible to buy the land in foreigner's name as thru individual or opening a company by this foreigner? Also how to repatriate his investment and when can he do

Investment in Real Estate Development & township etc can be done only through Corporate Structure, by forming an Indian Company and subscribing to its shares. Repatriation is subject to compliance with regulation (normally for real estate project there is lock in for three years

I want to know about the Export Payments. If my buyer send me payment from foreign into my account to place order and than he cancel the order, can I return him the money in INR when he is in India? Please let me know.

You cannot do so. It is advisable to return the money in foreign exchange through Banks, after proving to them that the advance for order did not materialize

Was an NRI and have permanently returned to India in May 2006. I have NRE account (Rupee Deposits) and FCNR account with Citibank. Can I transfer NRE (Rupee deposits) to another bank's fixed deposits now? What are the tax implications? How about FCNR account?

First you need to change all these accounts into regular resident account, by informing bankers about the fact of change of residential status. Your account will be re-designated as resident account. Thereafter, you may deal with your deposits the way you like, subject to bankers' commercial terms.

If this money is out of your taxed money then there is no tax liability. However any further earnings on this account it will be taxed as per the present I T act

We are NRI's living in Australia. Could you please advise the appropriate bank account that we can open in India for our personal income within India - pension, rents, sale of property etc? Would the balances held in this account would be repatriable to Australia

Pl.find the bank that is convenient for you to operate. In general we prefer to not to refer any bank.

I'm a US Citizen of Indian Origin and currently hold an OCI card.

I would like to sell the property I inherited from my Dad and transfer the proceeds to my US bank account.

Is this possible, if so how may I do this? What are the tax implications in India and the US?

You should furnish proof of inheritance to bankers and deposit the sale proceeds into your NRO Account. The bankers will enable you to repatriate the property sale proceeds, net of taxes, from out of NRO Account.

The capital gain will be subject to tax in India and the position on US may be consulted locally. Repatriation is permissible up to 1mn USD

Can i still continue to be the second account holder of the banks over seas?

Yes. You can be the second mentioned holder of investments abroad, earned while you were abroad.

If my son remits money to me for my expenses in India when i have shifted here, will that be subject to tax.

You need to maintain proof (Foreign Inward Remittance Certificate or FIRC) from Bank that money is received from your own son.

As an NRI in USA, I am getting conflicting information from different places. I would like to invest in mutual funds and stocks in India. Is there a bank (Citibank, ICICI etc) that lets me open an NRE account, transfer funds from USA, and then invest in mutual funds through their website? Will I have to work with a separate broker to do the investment or can I do that on my own online through the bank websites (or some other websites)?

In case of NRI and person of Indian origin residing abroad, payment may be made by way of Indian rupee draft payable at Mumbai or by way of cheques drawn on Non-Resident (External)(NRE) accounts payable at par at Mumbai-and purchased out of funds held in NRE/FCNR Accounts.

All cheques/drafts should be made out in favour of the respective schemes/ plan. In case of Indian rupee purchased abroad or from NRE/FCNR account an account debit certificate from the bank issuing the draft conforming the debit shall also be enclosed.

Any further clarification you can visit the respective fund house site and follow the guideline.

I have acquired the status of NRI (USA based) but continue to hold Indian passport. I have no resources abroad and I am wholly supported my children in USA. Both my wife and myself are senior citizens. We both draw pensions in India from our govt departments. I am also a cancer survivor.

Firstly: Can I continue to maintain my accounts with Banks without converting them as NRO accounts?

Secondly: What happens to my PPF and post office saving bank accounts?

If you happen to stay away for more than 182 days you will not have resident status. You have to inform your banker about the change in the status in turn your account will have to change to NRO.

NRI"s are not allowed to invest in small savings. Consult your post office by informing your status

I had gone to US on business visa last year. I have opened a joint bank account with my friend he is US citizen. I have a credit card of that account with me know. Can I withdraw that money in India through that card? Do I have to take a special permission from RBI to use that?

As a resident of India, you cannot open Account with a Bank abroad, unless you comply with RBI Regulations in this regard. It is advisable to close your joint name forthwith and the Credit card for that account. However, from your own banker in India, you are now permitted to obtain International Credit Card, which will serve the same purpose

I am selling a plot of land that was bought in India with money transferred from overseas some 6-7 years ago. Now I am selling the land and want to bring the money back to my country of residence overseas. Can I put the money into my nri/nre account and have it transferred overseas?

I am assuming that the Land purchased by you is not agricultural / plantation / Farm House. If so, if you had purchased land using foreign exchange, you may sell and deposit into NRO Account and repatriate sale precedes net of taxes.

Can NRI trade in Indian Stock market on ONLINE directly or only through authorised dealers.

Yes, NRI can trade in Indian stock market on Online

I am a PIO with an Australian Citizenship. I have been offered a job as a CEO in India. I have a house with mortgage payments due in Australia.

Could I repatriate a monthly amount from my IRS salary to Australia?

YES. You may repatriate out of India, for maintenance of close relatives or bona fide payments abroad, as a person normally residing abroad, but on deputation in India.

Secondly when I go back to Australia after my 3 year contract, are there restrictions on converting to A$ my IRS savings

You are permitted to remit all the assets or investments that you are eligible to make while you were in India.

1.Is it true that NRIs resident in USA cannot invest in Mutual Funds in India? Why don't banks let US NRIs open a demat account?

Answer: In case of NRI and person of Indian origin residing abroad, payment may be made by way of Indian rupee draft payable at Mumbai or by way of cheques drawn on Non-Resident (External)(NRE) accounts payable at par at Mumbai-and purchased out of funds held in NRE/FCNR Accounts.

All cheques/drafts should be made out in favour of the respective schemes/ plan. In case of Indian rupee purchased abroad or from NRE/FCNR account an account debit certificate from the bank issuing the draft conforming the debit shall also be enclosed.

Any further clarification you can visit the respective fund house site and follow the guideline.

2.I have recently got UK citizenship and have also obtained the OCI (Overseas Citizenship of India). As per OCI, one gets all economic rights at par with an NRI. Does that mean I can continue to invest in my existing PPF account?

Answer: NRI's are not allowed to invest in postal small saving schemes. More over talk to your concern post office and inform them the change in status regarding your existing investments. And take their opinion on closing down the account.

3. My relative is starting a new company in the US. I would like to send him money to be used as a bridge loan for the new company. Can I invest in the company directly or do I have to send him a personal loan or gift?

Answer :Investment is possible upto 50000USD without any approval. Please approach your authorized dealer for help.

4.I am Working in an education firm as a manager (new venture). My firm wants to setup few operational offices in Middle East. For that what kind of RBI clearance will be required and from where I can get the exact information about legal aspects and procedure.

Answer: This is overseas Direct Investment (ODI). Notification 19 of FEMA covers ODI in corporate Business of creating abroad Joint Venture or Wholly owned subsidiary only. If you share more details about the nature of services rendered by your educational firm, the business structure we can further elaborate on this.

5.I am from St.Maarten, Netherland Antilles belong to kingdom of Netherlands (In the Caribbean). I had some money on my NRE Savings Accounts on ICICI. I wanted to open a FCNR account OR FD account. They declined to open any new accounts because i am from 'NETHERLANDS'. Is there any regulation on RBI that they cannot open any accounts if you reside in Netherlands? I have opened FCNR/FD accounts before.

Answer: The reply suggests that the Account opening is your country that is the NETHERLANDS. The second sentence also refers to 'your country of residence', whereas your requests seem to be opening some non-resident Account in India. Clarify. Anyway, there is nothing in Foreign Exchange Law prohibiting your requirement. We apprehend that it could be some communication gap or internal rules of the Bank itself. On your further clarification, we can support further.

6.My fiancee has an NRI-NRE account in Australia in Citibank. Can I wire-transfer/Electronic fund transfer an amount of say <20000 USD to her NRE account from US? Apparently, I was being told that no one except my fianc‚e herself can deposit any amount in that account?

Answer: Any bonafide credits are permitted into NRE Account.

7.Could you please let me know upto what amount of gift we can give to our children and the tax we have to pay if we want to remit the amount overseas to our children in U.S.A.?

Answer: There is a limit of 1 lakh US dollars for remittance for maintenance and studies. There are no tax implications.

8. Is it mandatory for a NRI to redesignate Resident savings accounts as NRO accounts after becoming NRI? Are there any penalties for not doing so?

Answer: YES, it is mandatory for a NRI to designate his resident account into NRO account on becoming NRI. If he does not, it is a contravention and penalties cannot be generalized

9.Is it illegal for a NRI to open a Resident account after becoming a NRI by willfully concealing his NRI status from the bank?

YES.

10. Can a NRI maintain & operate both Resident & NRI bank accounts at will or does he have to open & operate only NRI accounts?

Answer: ONLY NRI Accounts. NRI Accounts are no different accounts. They are resident Account designated on the basis of fact that a person had become non-residents.

11. Is it permissible to deposit ones own NRE/NRO cheques into one's own Resident accounts? If an NRI cannot operate Resident accounts at all than isn't such a transaction not permissible as it involves simultaneous operation of NRI & Resident accounts by the same individual?

Answer: Once it is a non-resident Account -- NRO or NRE -- then both debits and / or credits are regulated by directions from RBI to bankers. There is no interpretation possible on this and bankers will execute and implement RBI directions. You may be guided by RBI procedures or directions here, as much of this deals with banking transactions of non-residents.

12.I am an Indian born Canadian citizen living in the USA. I have an OCI and have an Indian address. What options do I have for the following:
Opening bank accounts
Opening Fixed Deposit Accounts
Opening Demat Accounts for trading Mutual Funds/Stocks.

Answer: Opening bank accounts - You are permitted to open NRO or NRE Account. Contact bankers.
Opening Fixed Deposit Accounts -You are permitted to have FDs. Contact bankers.
Opening Demat Accounts for trading Mutual Funds/Stocks - You should contact registered Stock broker who will guide you on procedures. The foreign exchange law permites investment in stocks.

13.My brother recently went to Dubai. Now he wants to send money to me in India. How can this be done?

Answer : He may open an NRE or NRO account with any bank in India for transferring moneys. He may contact his bankers who will assist him on that.

14. Does RBI permit NRIs to buy life insurance from Indian Insurance companies by paying premium out of NRO account?

Answer: NRIs are permitted to buy life insurance and the premium for the same can be paid from NRO account.

15.What is the procedure and limits for purchasing property and shares outside India by a resident Indian?

Answer: As per the latest notification its upto $ 1,00,000 by resident Indian.

I am a state government employee paying the income tax. I came to France on a fellowship for two months. If I transfer money through State Bank of India in Paris to my account in India will the money taxable. If not what is the limit. Please send me reply.

The remittance is not taxable. However, the money earned in France is taxable in India, unless the same was in the nature of a scholarship given to you.

I am NRI (US Citizen). Can I invest in mutual funds in India? If the answer is yes, can you help me with complete details, how to invest, what forms to fill out (a step by step process listed out would be greatly appreciated).

NRIs are allowed to invest in MF. Application can be downloaded from the respective Mutual Fund web site and take a DD payable at Mumbai and along with your PAN Card copy send it to respective fund house. For more details visit the site.

As a NRI, how do I invest in Kisan Vikas Patra or other high-interest investments?

NRIs are not allowed to invest in small saving schemes of Post Office.

Person holding NRI status got his US citizenship. What will be the impact on his NRO a/cs and FCNRs that he is holding?

NRI by virtue of becoming US citizen attains the legal status of Person of Indian Origin (PIO). Legally both have the same treatment so far as accounts such as NRO or FCNR are concerned. It is advisable to inform bankers about the developments.

Last year for few months work I came to USA. I end up staying here for more than 1 year 10 months. I did not change my Indian bank account to NRE account. Does this create issue? Also as I don't have any Indian income for whole last year, I did not file Indian tax. If I want to correct this now, is it possible. What kind of complications this may result.

It is always advisable to inform bank about change in residential status. Now inform your banker and convert your SB account into NRO account.

Hi, I am currently based overseas and have an NRI status. I have foreign currency accounts. If I return to India for good and cease to be an NRI, can I still continue to hold funds in foreign currency accounts (either in a foreign bank, or Resident Foreign Currency a/c), or at some point in future I will need to convert to Indian rupees.

You may hold foreign currencies that you had earned while abroad as a non-resident. It is advisable to inform your bankers of the details.

We are old parents and our children are in US and Canada respectively. My son wants us to come over to Canada. What I want to know is if we get PR for Canada is it possible for us to encash all our properties in India and take to Canada for our future living there in Canada. Is there any RBI about the limits. As we want to live separately we need funds. So is it possible to encash the entire property into Canadian dollar and take to Canada. Pls write.

You may approach the bankers to remittance of your assets held in India under the "Remittance of Assets" scheme. They will guide for procedural compliance in this regard. If there is any difficulty after discussing with your bankers, please do not hesitate to write to us for specific support.

Just from academic point of view, what are the aspects that RBI looks into while granting approval for pledge of shares of an Indian company by non-resident shareholder to an Indian entity, where the pledge of shares is given in consideration for loan to the Indian company?

It will vary from bank to bank. Normally more liquid stocks are allowed to pledge. Most of the banks have a list. The pledge is allowed only for the set of stocks.

I am a Person of Indian Origin and registered as an OCI. I am now an Australian citizen and live in Sydney.
Could you please advise me if I am allowed to invest in Mutual Funds in India out of my NRE account?

NRIs are allowed to invest in Mutual Fund from NRE account.

Schedule 3 of the Foreign Exchange Management (Current Account Transactions) Rules 2000 Item 7, which relates to maintenance of close relatives abroad mentions that we will need RBI approval only if the amount remitted exceeds USD 100,000 per year per recipient.
Therefore if I have 6 close relatives (as defined under Section 6 of Companies Act) living abroad can I (being a Resident Indian) send USD 600,000 (USD 100,000 each) from my account per year without RBI approval? Will this be over & above the USD 100000 allowed under the Liberalised Remittance Scheme? What will the documents that an AD would request for before making the remittance?

(1) The ceiling limit is US$ 100,000 for all close relatives per recipient. No RBI approval is needed, as this is general permission to be done with bankers themselves. Bankers will ask for standard declaration, Form A2 etc. You may contact bankers for procedures.

(2) Liberalised Remittance Scheme has a separate and independent ceiling limit of US$ 100,000 per Financial Year. You may do so, after complying with simple and standard procedures with bankers.

I am NRI. If I am opening NRE account in a bank, do I have to convert my saving account in India into NRO account?

Once your resident status changes to NRI it's advisable to inform your banker and convert your SB account into NRO. This account can be utilised to deposit any income derived in rupee term.

I and my wife have an H1-B visa each and plan to go to the USA. How much money in US dollars can we take to the US for our expenses? That is how much of INR can be converted into USD and be taken with us?

The purpose of travel is important. If it is for business purposes, under BTQ (Business Travel Quota) you may take up to US$ 25,000/-. If it is for employment purposes, then after employment there in US, you can remit through your NRO Account opened here for specific purposes, within the Regulation. You may contact your banker or money-changer for more purposes, ceiling limits and simple procedures.

Can a foreigner buy property (flat, plot etc) in India? He is not an Indian origin.

Only with approval of RBI.

I am a New Zealand citizen holding Indian PIO card. I would like to open NRO account and like to clarify few details.
1. I would like to invest in Indian stock and mutual funds using this account. Please advice weather this is the right account type to make payment and deposits from stocks.
2. Income and profit I receive from this trading can be deposited in this account and are they tax liable?
3. In future I would like to buy a property in India and rental income I receive from that can be deposited in this account and please explain my tax liabilities in this case.
Much appreciate your quick reply in advance.

The investments by a NRI in India need to happen only thro identified authorised dealers. Please contact any of the leading commercial banks for all guidance on this. Profits/gains are taxable depending upon whether it is a capital gain or business profits subject to benefits under relevant double taxation treaties.
Rental income from property can be deposited in NRO account only with some limitations on repatriation.

I am an Indian citizen living in the UK since 2002 having been deputed from my organisation in India. I have property in India as well as my PF. We are now migrating to Australia directly from the UK. Is it possible to later take our money from sales of the property net of capital gains tax as well as my PF? What are the RBI guidelines on this? What if I sell my second property much later - can I take this money net of Capital gains tax to Australia?

You may sell your property and also repatriate your proceeds lying in PF account under "Remittances of Assets" scheme, up to $ one million from NRO Account. You may contact your bankers for procedures.

I have an RCA (NRO) account that I created with Citibank before moving from US. Can I open RFC account now and transfer whatever funds are lying in my CITIBANK to HSBC RFC?

You can open RFC account and transfer the funds.

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