Facilities for Non Resident Indians (NRIs)

Frequently Asked Questions(from RBI site)

Facilities for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs)

(Updated up to September 19, 2014) In terms of the Foreign Exchange Management Act (FEMA), 1999 a person resident outside India means a person who is not resident in India.   What are the different types of accounts which can be maintained by an NRI1/PIO2 in India?   If a person is NRI or PIO, she/ he can, without the permission from the Reserve Bank, open, hold and maintain the different types of accounts given below with an Authorised Dealer in India, i.e. a bank authorised to deal in foreign exchange. NRO Savings accounts can also be maintained with the Post Offices in India.   Types of accounts which can be maintained by an NRI / PIO in India   A. Non-Resident Ordinary Rupee Account (NRO Account) Any person resident outside India may open NRO account with an authorised dealer or an authorised bank for the purpose of putting through bona fide transaction in rupees. Opening of accounts by individual/ entities of Pakistan and entities of Bangladesh require prior approval of Reserve Bank of India.   NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.   ● Savings Account - Normally maintained for crediting legitimate dues /earnings / income such as dividends, interest etc. Banks are free to determine the interest rates. ● Term Deposits - Banks are free to determine the interest rates. Interest rates offered by banks on NRO deposits cannot be higher than those offered by them on comparable domestic rupee deposits. ● Account should be denominated in Indian Rupees. ● Permissible credits to NRO account are transfers from rupee accounts of non-resident banks, remittances received in permitted currency from outside India through normal banking channels, permitted currency tendered by account holder during his temporary visit to India, legitimate dues in India of the account holder like current income like rent, dividend, pension, interest, etc., sale proceeds of assets including immovable property acquired out of rupee/ foreign currency funds or by way of legacy/ inheritance. ● Eligible debits such as all local payments in rupees including payments for investments as specified by the Reserve Bank and remittance outside India of current income like rent, dividend, pension, interest, etc., net of applicable taxes, of the account holder. ● NRI/PIO may remit from the balances held in NRO account an amount not exceeding USD one million per financial year, subject to payment of applicable taxes. ● The limit of USD 1 million per financial year includes sale proceeds of immovable properties held by NRIs/ PIOs. ● Other than current income and the limit of USD 1 Mn per financial year applicable to NRIs/PIOs, balances in NRO accounts cannot be repatriated without the prior approval of RBI. ● The accounts may be held jointly with residents and / or with non-resident Indian. ● The NRO account holder may opt for nomination facility. ● NRO (current/savings) account can also be opened by a foreign national of non-Indian origin visiting India, with funds remitted from outside India through banking channel or by sale of foreign exchange brought by him to India. The details of this facility are given in the FAQs on “Accounts opened by Foreign Nationals and Foreign Tourists” available on the RBI website. ● Loans to non-resident account holders and to third parties may be granted in Rupees by Authorized Dealer / bank against the security of fixed deposits subject to certain terms and conditions.     B. Non-Resident (External) Rupee Account (NRE Account)   ● NRE account may be in the form of savings, current, recurring or fixed deposit accounts (with maturity of minimum one year). Such accounts can be opened only by the NRI (as defined under Regulation 2(vi) of Notification No. FEMA 5/2000-RB dated May 3, 2000) himself and not through the holder of the power of attorney. ● NRIs may be permitted to open NRE account with their resident close relatives (relative as defined in Section 6 of the Companies Act, 1956) on ‘former or survivor ‘basis. The resident close relative shall be eligible to operate the account as a Power of Attorney holder in accordance with the extant instructions during the life time of the NRI/PIO account holder. ● Account will be maintained in Indian Rupees. ● Balances held in the NRE account are freely repatriable. ● Accrued interest income and balances held in NRE accounts are exempt from Income tax and Wealth tax, respectively. ● Authorised dealers/authorised banks may at their discretion/commercial judgement allow for a period of not more than two weeks, overdrawings in NRE savings bank accounts, up to a limit of Rs.50,000 subject to the condition that such overdrawings together with the interest payable thereon are cleared/repaid within a period of two weeks, out of inward remittances through normal banking channels or by transfer of funds from other NRE/FCNR accounts. ● Savings - Banks are free to determine the interest rates. ● Term deposits – Banks are free to determine the interest rates of term deposits of maturity of one year and above. Interest rates offered by banks on NRE deposits cannot be higher than those offered by them on comparable domestic rupee deposits. ● Permissible credits to NRE account are inward remittance to India in permitted currency, proceeds of account payee cheques, demand drafts / bankers' cheques, issued against encashment of foreign currency, where the instruments issued to the NRE account holder are supported by encashment certificate issued by AD Category-I / Category-II, transfers from other NRE / FCNR accounts, sale proceeds of FDI investments, interest accruing on the funds held in such accounts, interest on Government securities/dividends on units of mutual funds purchased by debit to the NRE/FCNR(B) account of the holder, certain types of refunds, etc. ● Eligible debits are local disbursements, transfer to other NRE / FCNR accounts of person eligible to open such accounts, remittance outside India, investments in shares / securities/commercial paper of an Indian company, etc. ● Loans can be extended against security of funds held in NRE Account either to the depositors or third parties without any ceiling subject to usual margin requirements. ● Such accounts can be operated through power of attorney in favour of residents for the limited purpose of withdrawal of local payments or remittances through normal banking channels to the account holder himself.     C. Foreign Currency Non Resident (Bank) Account – FCNR (B) Account   ● NRIs are eligible to open and maintain these accounts. ● FCNR (B) accounts are only in the form of term deposits of 1 to 5 years ● All debits / credits permissible in respect of NRE accounts, including credit of sale proceeds of FDI investments, are permissible in FCNR (B) accounts also. ● Account can be held in any freely convertible currency. ● Loans can be extended against security of funds held in FCNR (B) deposit either to the depositors or third parties without any ceiling subject to usual margin requirements. ● The interest rates are stipulated by the Department of Banking Operations and Development, Reserve Bank of India. With effect from March 1, 2014, in respect of FCNR (B) deposits of maturities, 1 year to less than 3 years, interest shall be paid within the ceiling rate of LIBOR/ SWAP rates plus 200 basis points for the respective currency/ corresponding maturity. For FCNR(B) deposits with maturity of 3-5 years interest shall be paid within the ceiling rate of LIBOR/ SWAP rates plus 300 basis points. On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency/ maturity plus 200 bps/ 300 bps, as the case may be. For floating rate deposits, the interest reset period shall be six months. ● When an account holder becomes a person resident in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by him. ● Terms and conditions as applicable to NRE accounts in respect of joint accounts, repatriation of funds, opening account during temporary visit, operation by power of attorney, loans/overdrafts against security of funds held in accounts, shall apply mutatis mutandis to FCNR (B). NRI can open joint account with a resident close relative (relative as defined in Section 6 of the Companies Act, 1956) on former or survivor basis. The resident close relative will be eligible to operate the account as a Power of Attorney holder in accordance with extant instructions during the life time of the NRI/ PIO account holder.   Is the permission of the Reserve Bank required for opening the various accounts, mentioned above, by Bangladesh / Pakistan individuals/entities?   Opening of accounts by individuals/entities of Pakistan and entities of Bangladesh nationality requires prior approval of the Reserve Bank.. All such requests may be referred to the General Manager, Foreign Exchange Department, Central Office Cell, Reserve Bank of India, 6 Sansad Marg, New Delhi - 110 001. However, individuals of Bangladesh nationality are permitted to open NRO accounts without the prior approval of Reserve Bank of India, subject to conditions.   Can an individual resident Indian borrow money from his close relatives outside India?   Yes, an individual resident Indian can borrow a sum not exceeding USD 250,000 or its equivalent from his close relatives3 staying outside India, subject to the conditions that: the minimum maturity period of the loan is one year; the loan is free of interest; and the amount of loan is received by inward remittance in free foreign exchange through normal banking channels or by debit to the NRE/FCNR(B) account of the NRI. Can an individual resident lend money to his close relative NRI / PIO?   Yes, an individual resident can lend money by way of crossed cheque /electronic transfer within the overall limit prescribed under the Liberalised Remittance Scheme, to meet the borrower’s personal or business requirements in India, subject to conditions. The loan should be interest free and have a maturity of minimum one year and cannot be remitted outside India. Can an individual resident repay loans of close relative NRIs to banks in India?   Yes, where an authorised dealer in India has granted loan to a non-resident Indian such loans may also be repaid by resident close relative (relative as defined in Section 6 of the Companies Act, 1956), of the Non-Resident Indian by crediting the borrower's loan account through the bank account of such relative. What are the other facilities available to NRIs/PIO?   A. Investment facilities for NRIs NRI may, without limit, purchase on repatriation basis: ● Government dated securities / Treasury bills ● Units of domestic mutual funds; ● Bonds issued by a public sector undertaking (PSU) in India. ● Non-convertible debentures of a company incorporated in India. ● Perpetual debt instruments and debt capital instruments issued by banks in India. ● Shares in Public Sector Enterprises being dis-invested by the Government of India, provided the purchase is in accordance with the terms and conditions stipulated in the notice inviting bids. ● Shares and convertible debentures of Indian companies under the FDI scheme (including automatic route & FIPB), subject to the terms and conditions specified in Schedule 1 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time to time. ● Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedule 3 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time to time. NRI may, without limit, purchase on non-repatriation basis :   ● Government dated securities / Treasury bills ● Units of domestic mutual funds ● Units of Money Market Mutual Funds ● National Plan/Savings Certificates ● Non-convertible debentures of a company incorporated in India ● Shares and convertible debentures of Indian companies through stock exchange under Portfolio Investment Scheme, subject to the terms and conditions specified in Schedules 3 and 4 to the FEMA Notification No. 20/2000- RB dated May 3, 2000, as amended from time to time. ● Exchange traded derivative contracts approved by the SEBI, from time to time, out of INR funds held in India on non-­repatriable basis, subject to the limits prescribed by the SEBI. Note : NRIs are not permitted to invest in small savings or Public Provident Fund (PPF). B. Investment in Immovable Property ● NRI5 / PIO4 may acquire/transfer immovable property in India other than agricultural land/ plantation property or a farm house out of repatriable and / or non-repatriable funds. ● Foreign national of non Indian origin resident outside India shall not acquire/transfer any immovable property in India other than on lease not exceeding five years, without prior approval of Reserve Bank of India. ● The payment of purchase price, if any, should be made out of (i) funds received in India through normal banking channels by way of inward remittance from any place outside India or (ii) funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank. Note : No payment of purchase price for acquisition of immovable property shall be made either by traveller’s cheque or by foreign currency notes or by other mode other than those specifically permitted as above. ● NRI may acquire any immovable property in India other than agricultural land / farm house plantation property, by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India ● NRI may acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations or from a person resident in India ● An NRI may transfer any immovable property in India to a person resident in India. ● NRI may transfer any immovable property other than agricultural or plantation property or farm house to a person resident outside India who is a citizen of India or to a person of Indian origin resident outside India. In respect of such investments, NRIs are eligible to repatriate: ● The sale proceeds of immovable property in India if the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels / by debit to NRE / FCNR (B) account. ● The amount to be repatriated should not exceed the amount paid for the property in foreign exchange received through normal banking channel or by debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR (B) account. ● 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 / PIO, the repatriation of sale proceeds is restricted to not more than two residential properties subject to certain conditions. ● If the property was acquired out of Rupee sources, NRI or PIO may remit an amount up to USD one million per financial year out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance. ● Refund of (a) application / earnest money / purchase consideration made by house-building agencies/seller on account of non-allotment of flats / plots and (b) cancellation of booking/deals for purchase of residential/commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR (B) account/inward remittances. Repayment of Housing Loan of NRI / PIOs by close relatives of the borrower in India Housing Loan in rupees availed of by NRIs/ PIOs from ADs / Housing Financial Institutions in India can be repaid by the close relatives in India of the borrower. C. Facilities to returning NRIs/PIOs ● Returning NRIs/PIOs may continue to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India, if such currency, security or property was acquired, held or owned when resident outside India ● The income and sale proceeds of assets held abroad need not be repatriated. Foreign Currency Account   ● A person resident in India who has gone abroad for studies or who is on a visit to a foreign country may open, hold and maintain a Foreign Currency Account with a bank outside India during his stay outside India, provided that on his return to India, the balance in the account is repatriated to India. However, short visits to India by the student who has gone abroad for studies, before completion of his studies, shall not be treated as his return to India. ● A person resident in India who has gone out of India to participate in an exhibition/trade fair outside India may open, hold and maintain a Foreign Currency Account with a bank outside India for crediting the sale proceeds of goods on display in the exhibition/trade fair. However, the balance in the account should be repatriated to India through normal banking channels within a period of one month from the date of closure of the exhibition/trade fair. Resident Foreign Currency Account ● A person resident in India may open, hold and maintain with an authorised dealer in India a Resident Foreign Currency (RFC) Account. ● Proceeds of assets held outside India at the time of return can be credited to RFC account. ● The funds in RFC accounts are free from all restrictions regarding utilisation of foreign currency balances including any restriction on investment in any form outside India. ● RFC accounts can be maintained in the form of current or savings or term deposit accounts, where the account holder is an individual and in the form of current or term deposits in all other cases.RFC accounts are permitted to be held jointly with a resident close relative(s) as defined in the Companies Act, 1956 as joint holder (s) in their RFC bank account on ‘former or survivor basis’. However, such resident Indian close relative, now being made eligible to become joint account holder shall not be eligible to operate the account during the life time of the resident account holder. General facilities Can Exchange Earners Foreign Currency (EEFC) accounts be held jointly with a -resident Indian? Yes, EEFC account of a resident individual can be held jointly with a resident close relative on a ‘former or survivor’ basis. However, such resident Indian close relative will not be eligible to operate the account during the life time of the resident account holder. Can a resident individual holding a savings bank account include non-resident close relative as a joint account holder? Yes, individuals resident in India are permitted to include non-resident close relative(s) as a joint holder(s) in their resident bank accounts on ‘either or survivor’ basis subject to conditions. Can a resident individual gift shares/securities/convertible debentures etc to NRI close relative? Yes, a resident individual is permitted to gift shares/securities/convertible debentures etc to NRI close relative up to USD 50,000 per financial year subject to certain conditions. Can a resident individual give rupee gifts to his visiting NRI/PIO close relatives? Yes, a resident individual can give rupee gifts to his visiting NRI/PIO close relatives by way of crossed cheque/electronic transfer within the overall limit prescribed under Liberalised Remittance Scheme for the resident individual and the gifted amount should be credited to the beneficiary’s NRO account. What types of services can be provided by a resident individual to his / her non-resident close relatives? A resident may make payment in rupees towards meeting expenses on account of boarding, lodging and services related thereto or travel to and from and within India of a person resident outside India who is on a visit to India. Further, where the medical expenses in respect of NRI close relative are paid by a resident individual, such a payment being in the nature of a resident to resident transaction may also be covered under the term “services”. 1 A Non Resident Indian (NRI) is a person resident outside India, who is a citizen of India or is a person of Indian origin. 2 A Person of Indian Origin (PIO) for this purpose is defined in Regulation 2 of FEMA Notification ibid as a citizen of any country other than Bangladesh or Pakistan, if (a) he at any time held Indian passport; or (b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or (c) the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b). 3 'Close relative' means relative as defined in Section 6 of the Companies Act, 1956. 4 'A Person of Indian Origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan) who (i) at any time, held an Indian Passport or (ii) who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). 5 For the purpose of acquisition and transfer of immovable property in India an NRI refers to an Indian Citizen resident outside India (Notification No. FEMA 21/2000_RB dated May 3, 2000, as amended from time to time)

https://rbi.org.in/Scripts/FAQView.aspx?Id=52

Know the difference between NRE and NRO account-Moneycontrol-20 May 2013

Many NRIs are often faced with the situation of maintaining a Rupee account in India. There are two options available with NRI interested in opening bank account in India - NRE or NRO account. Read this space to know the difference between these two accounts and know when to choose what account.

 

Non-Resident Indian is often faced with the situation of maintaining a Rupee account in India. Primarily there are two reasons for opening such account: NRI wants to repatriate overseas earned money back to India and/or NRI wants to keep India based earnings in India.  NRI has the option of opening a Non Resident Rupee (NRE) account and/or a Non Resident Ordinary Rupee (NRO) account. An NRO account can also be opened by a Person of Indian Origin (PIO) and an Overseas citizen of India (OCI).

Similarities between NRE and NRO accounts:
Both accounts can be opened as Savings as well as current accounts and are Indian Rupee accounts. One needs to maintain an average monthly balance of Rs 75000 in both NRE and NRO accounts.
The Differences between NRE and NRO accounts:
1. Repatriation: NRE account is freely repatriable (Principal and interest earned) while the NRO account has restricted repatriability i.e permitted remittance allowed from NRO is up to USD 1 million net of applicable taxes in a financial year after giving undertaking along with a certificate from a chartered accountant.
2. Tax Treatment: NRE account is Tax free (no Income tax, wealth tax and gift tax) in India. On the other hand the interest earned in NRO account and credit balances are subject to respective income tax bracket and are also subject to applicable wealth and gift tax.
3. Deposit of Rupee funds generated in India: If an NRI/PIO/OCI  is earning income originating in India (such as salary, rent, dividends etc.) he/she is only allowed to deposit it in NRO account. Deposit of such earnings is not permitted in NRE account.
4. Joint Holding: NRE account can be iointly held with another NRI but not with resident Indian. On the other hand NRO account can be held with NRI as well as resident Indian (close relative) as defined under Section 6 of the Companies Act 1956.
Choose NRE accounts if you:

• (Primary reason) want to park your overseas earnings remitted to India converted to Indian Rupees;
• want to maintain savings in Rupee but keep them liquid;
• want to make a joint account with another NRI;
• want Rupee savings to be freely repatriable

Choose NRO account if you:

• (Primary reason) want to park India based earnings in Rupees in India;
• want account to deposit income earned  in India such as rent, dividends etc;
• want to open account with resident Indian (close relative)

http://www.moneycontrol.com/news/fixed-income-bank-deposits/knowdifference-between-nrenro-account-_875207.html

HSBC Bank site says

http://www.hsbc.co.in/1/2/personal/nri-services/compare-nr-accounts

RETURNING INDIANS

 

A returning NRI should know and understand various aspects of Foreign Exchange Regulations (FEMA), Indian Taxation and Banking Regulations in order to rearrange his financial affairs in India and outside India.

Detailed information covering important aspects for such arrangement is explained here

 

FOREIGN EXCHANE MANAGEMENT ACT (FEMA)

A) OVERSEAS ASSETS

All kind of Foreign exchange / Overseas assets such as properties, bank deposits, stocks and securities, life insurance policies, loans, company deposits, debentures, bonds etc. acquired, held or owned by an NRI while he was abroad can be continued to be so held and deal in any manner even after the NRI’s return to India for permanent settlement.

B) INDIAN ASSETS I. BANK ACCOUNTS. (In India) Returning NRIs, upon his return to India has to deal with his various accounts in India in the following manner:   Account Description Treatment to be given NRO A/c Re-designate to Resident A/c. FCNR A/c Hold upto maturity. Upon maturity should be converted into Rupee Account or RFC A/c. NRE A/c Re-designate to Resident A/c or Transfer Balance to RFC A/c. II. RESIDENT FOREIGN CURRENCY ACCOUNT (RFC Account) A Returning NRIs, on becoming residents are free to open and maintain such accounts with authorised dealers. The funds held in RFC are fully repatriable and also denominated in Forex. Funds in RFC accounts can be remitted abroad for any bona fide purpose of the account holder or his dependants. II. SHARES SECURITIES ETC Returning NRI is required to inform all the companies, funds etc. as to change of residential status from NRI to Resident. INCOME TAX ACT The tax liability of a person returning India would depend on the Residential Status of a person as per the Income-tax Act, 1961. Under the Indian Tax Laws overseas income is liable to Tax in India only if the assessee is an ordinarily resident. A returning Indian who has been a Non Resident for 9 years or more, then for 2 successive years he shall be a resident but not ordinarily resident (RNOR). Interest on Non Resident External Account (NRE) and Foreign Currency Non-Resident Account (FCNR) [Section 10(4)(ii)] is Exempt in the hands of a person who is a Person Resident outside India as per section 2(w) of FEMA, 1999 and definition of 'Non-Resident' under Income Tax is not relevant for this sub section. Income in respect of Interest, premium on redemption, other payment on notified securities, bonds, certificates and deposits. [Section 10(15)(i)]. Interest on India millennium Deposits (IMDs)/Resurgent India Bonds (RIBs) issued by State Bank Of India (The exemption from tax continues even if the NRI becomes a resident and is also available to the nominee or the survivor of the NRI or to a donee to whom the bonds have been gifted by the NRI.) Interest paid by schedule banks to Non Resident or to a person who is not ordinarily resident on RBI approved foreign currency deposits (i.e. RFC deposits) is exempt (s. 10 (15) (iv) (fa)). The exemption, in respect of RFC account, continues till such time as the account holder continues to be “Resident but Not Ordinarily Resident”. NRIs have been offered a separate concessional tax regime in respect of certain types of income under Chapter XIIA comprising section 115C to 115I. As per section 115E, concessional tax of 20 percent is available in respect of investment income and 10% in respect of long-term capital gains from the specified assets, which are acquired out of convertible foreign exchange. The benefit of concessional tax treatment under chapter XIIA continues even after NRI becomes a resident. Pension: If you are likely to receive pension from your former employer after you return to India, it may be liable to tax in India subject to provisions of Double Taxation Avoidance Agreement between India and the country from which you are receiving it. WEALTH TAX Assets located outside India of Non-resident (NR) / Resident but Not Ordinary Resident (RNOR) are exempt from Wealth Tax. If NRI return to India with the intention of permanently residing in India, the assets brought by him will be exempt. Also, the money and the assets acquired from the money, brought by NRI within one year after his return, will be exempt. This exemption is available to NRI for a period of seven years after his return to India. [Sec. 5(1)(v)] PIO CARDS The Government has announced a scheme for issuance of Persons having foreign of Indian Origin (PIO) Cards for Persons of Indian Origin living abroad and passports. The PIO cards, which would be extended to Persons of Indian Origin settled in countries other than Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan besides introducing a visa free regime, also confer some special economic, educational, financial and cultural benefits to the holders of these Cards. The following facilities shall be extended to the PIO Card holders: - Visa free entry to India. For PIO Card holders the requirement for registration with Foreigners Regional Registration Office has been done away with for continuous stay not exceeding 180 days. All future benefits that would extended to NRIs would also be available to the PIO Card holders. ASPECTS TO BE KEPT IN MIND BY RETURNING INDIAN A Returning Indian needs to plan his return to India. For the purpose, he needs advice / information on various aspects of Tax Laws / FEMA, 1999. What is your residential status under: Foreign Exchange Management Act, 1999 The Income Tax Act, 1961 Planning the date and month of return to India so as ensure minimum tax liability in the year of return (i.e. April to March)? Holding and operating of non-resident Banking accounts on your return to India and Taxability thereof. Taxability of Income earned in and outside India In the year of return to India. In the subsequent period. Application of Double Taxation Avoidance Treaty, if any applicable Advice / information on various aspects of Tax Laws / FEMA, 1999 in respect of holding of assets in and outside India / earning income in and outside India and its taxability? Assistance in Filing Return of Income. Reorganize your asset portfolio in India/outside India with professional assistance to ensure minimum tax. Thus we also advise on setting up Business/Investment Outside India. http://www.nritaxservices.com/ret_indn.htm FAQ From HDFC Site In what currency can my NRE Fixed Deposit be maintained? Your NRE Fixed Deposit Account is maintained in Indian Rupees. What is the minimum amount with which I can open an NRE Fixed Deposit? The minimum amount with which you can open an NRE Fixed Deposit Account is INR 25,000/- and the amount required for Add-on Fixed Deposits is INR 10,000/-. What is the frequency of interest payment on my NRE Fixed Deposit Account? Interest is credited in your NRE Savings Account every quarter of the year. Will I get a cheque book and an ATM / Debit Card when I open an NRE Fixed Deposit? No. You will not get a cheque book or an ATM / Debit Card with your NRE Fixed Deposit Account Can I avail of a loan against my NRE Deposits? Yes. You can avail of a loan against your NRE Deposits. The loan/overdraft can be used for personal purposes or for carrying on business activities other than - Relending Agricultural/plantation activities Real estate business Can I break my Deposit before the maturity period? Yes. You can break your Deposit before the maturity period. NRE Deposits booked on or after 1st May 2003 will qualify for interest only if they have run for a minimum period of 12 months. Can my NRE Deposits with the Bank be automatically renewed on maturity? If you provide specific auto renewal instructions, the deposit will be renewed on maturity in accordance with the instructions. In the absence of any instructions, deposit will be renewed for the same period at the rates prevailing on the date of maturity. What taxes am I liable to pay if I have an NRE Fixed Deposit? As per current guidelines, funds in NRE Fixed Deposit Account are exempted from income tax in India. What is the tenure and interest rate for which I can open a NRE Fixed Deposit? Please click here to know more on tenure and interest rate. Can I have a nominee for my NRE Fixed Deposit? Yes. You can have a nominee for the NRE Fixed Deposit Account. Can I have a joint applicant for the NRE Fixed Deposit? Yes. You can hold the NRE Fixed Deposit Account jointly with other Non-Resident Indian(s). Can I transfer funds from my existing NRO Accounts to open NRE / FCNR Deposit? No. NRO funds cannot be used to create NRE/FCNR deposit. http://www.hdfcbank.com/nri_banking/accounts/fixed_deposits/nre_fixed_deposits/nre_fixed_deposits.htm