NRI Corner

An Indian citizen who stays outside India

  • For purposes of carrying out employment or any business or vocation;
  • Under circumstances indicating an intention to stay outside India for an uncertain duration;
  • Any Indian citizen deputed outside India for a temporary period in connection with employment. (Persons posted in U.N. organizations and officials deputed abroad by Central / State Governments and Public Sector undertakings on temporary assignments are also treated as non-residents)
  • Non-resident foreign citizens of Indian Origin are treated on par with non-resident Indian citizens (NRIs) for the purpose of certain facilities.

A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if

  • He / she at any time held an Indian passport; OR
  • He or either of his parents or any of his grandparents was citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 (57 of 1955)

“NRI account” is a popular connotation for Indian accounts opened for NRIs. The types of accounts that an NRI can open in India are NRE (Rupee Repatriable) FCNR (Dollar, Pound, Euro, Yens, Can dollars & Aus Dollars) & NRO (Rupee Non Repatriable). US residents may bear in mind that these accounts are not FDIC Insured, the income may be subject to US Federal Income Tax, and balances in excess of $10,000 may need to be reported annually to the US Treasury Department.

NRE account is a Rupee denominated account which is fully repatriable. Funds into this account will have to be received from outside India. You can open either a SB account (liquid account provided with a check book) or a Fixed deposit. The minimum period for an NRE fixed deposit is 12 months.

FCNR accounts can be opened in five different currencies viz., US dollar, Pound Sterling, Euro, Jap Yen, Canadian Dollar & Australian Dollar. They are in the form of fixed deposits only and the minimum period of deposit is 12 months.

Non-Resident Account (NRO Accounts)
These are Rupee dominated non-repatriable accounts and can be in the form of savings, current, recurring or fixed deposits. These accounts can be opened jointly with residents in India. When an Indian National /PIO resident in India leaves for taking up employment etc. outside the country, other than Nepal or Bhutan, his bank account in India gets designated as NRO account. The deposits can be used to make all legitimate payments in rupees. Interest income from NRO accounts is taxable. Interest income, net of taxes is repatriable. Authorized dealers may allow remittances upto US$ 1 million, per calendar year, out of balances held in NRO account for any bonafide purpose.

The general permission to purchasing the immovable property covers

  • Only purchase of residential and commercial property; and
  • Does not extend to purchase of agricultural land / plantation property / farm house in India.

Proposals for purchase of such property would require specific approval of the RBI considered in consultation with the Government of India.

NO. An NRI / PIO, who has purchased residential and / or commercial property under general permission, is not required to file any documents with the RBI.

There are no restrictions on the number of residential / commercial properties that can be purchased by an NRI / PIO.

Payment can be made by NRI / PIO out of:

  • a) Funds remitted to India through normal banking channels, or
  • b) Funds held in NRE / FCNR (B) / NRO account maintained in India

If the original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account, the refund, together with interest (net of income tax) can be credited to the NRE account.

If the original payment was made by way of inward remittance or by debit to NRE / FCNR (B) account, the refund, together with interest (net of income tax) can be credited to the NRE account.

If the property was acquired out of foreign exchange sources, i.e., remitted through normal

  • 1) The amount to be repatriated should not exceed the amount paid for the property:
    •    a) In foreign exchange received through normal banking channels or
    •    b) By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR account.
  • 2) Repatriation of sale proceeds of residential property purchased by NRI / PIO out of foreign exchange is restricted to not more than two such properties.

From the NRO account, NRI / PIO may repatriate up to USD one million per financial year (April-March), this would also include the sale proceeds of immovable property.

No, there is no time limit for holding the property. Such time limits earlier existing have been removed.

The government of India has granted general permission for an NRI to buy property in India and he has to pay no taxes even while acquiring property in India but however certain taxed have to be paid if he is selling this property. The sale proceeds would be subject to capital gains tax and as of now if he has held the property for less than 3 years then he would be paying roughly about 30% tax and if the property has been held for more than 3 years then it 20% as capital gains tax and that is what he will have to pay.