NRI Services
Our teams of professionals in NRI services have experience of more than 20 years in NRI Banking and tax planning. From accounting and filing of NRI income tax returns and NRI portfolio management shall be managed by our core team
Who is an NRI?
Any individual is a Non-Resident of India (NRI) if he leaves India in any financial year for the purpose of employment outside India or any other individual who does not fit into the criteria of a resident Indian.
Individual who is a person of Indian origin (PIO) and who being outside India comes on a visit to India in any financial year is also termed as an NRI
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Or, any Person of Indian Origin is a citizen of any country (other than Bangladesh, Pakistan, Afghanistan, Bhutan, China, Nepal and Sri Lanka) is also an NRI since he not the resident if India.
Any student who travels to foreign country for educational purpose can also be called as a NRI till the time he holds a valid student VISA. (Under the FEMA Act). Even RBI vide its circular declared that for the purpose of FEMA, students studying abroad will be treated as NRI as soon as they go abroad for studies. Though there is a deliberation, whether a student studying abroad can be treated as NRI for income tax purpose, the questions has many versions from experts.
3 types of Banking accounts for NRI’s-
There are 3 types of banking accounts for NRI which are classified below-
- 1) Non- Resident External account (NRE)
- 2) Non- Resident Ordinary account (NRO)
- 3) Foreign Currency National Resident (FCNR)
Though the first 2 types of accounts are savings account meant for different purposes, the FCNR is a fixed deposit which is maintained in foreign currencies. Other than USD and GBP, FCNR is also maintained in all the other major currencies which include, AUD, CAD, etc. The deposit has a fixed percentage of interest income which is tax free and can be repatriated by the NRI and any given point.
NRE savings account is a tax free account which accepts only currencies other than INR. Any currency other than INR can be deposited in the NRE account and the same is not taxable. (Provided taxes are paid in the parent country)
NRO savings account is a taxable Indian savings account which helps the NRI to park his Indian savings or Indian earnings with any standardised bank. If any NRI residing abroad, receives rental income in India or any interest on securities, debentures which is payable in Indian rupees, the same can be parked in the NRO account. The NRO account is taxable under the income tax rules.
Can NRI appoint a Power if Attorney in India?
Yes, an NRI can appoint a POA in India to operate his account and even withdraw cash from the account provided an authorization mandate is submitted to the banker which is duly signed by the NRI.
A POA can also invest on behalf of the NRI investor and sign documents for initial and additional purchases provided the POA holder carries a registered POA. The POA needs to submit the original POA or a copy duly notarized in original. The POA documents should contain the signatures of the Sole/First holder and the POA holder. The POA holder has the right to transact on behalf of the NRI only when the POA is registered.
About Repatriation
Repatriation means any money which can be remitted back to the base country of the NRI. The payments can be purchased abroad which is remitted to the Indian NRE account also can be reversed back or repatriated back to the base country of the NRI.
Non-repatriation is any income or payments received in India by the NRI which gets parked in the NRO account of the NRI.
PAN card and NRI
Any NRI who has an income source in India has to have a Permanent Account Number (PAN) under which the said income is declared for assessment of income tax. An NRI’s income taxes in India will depend upon his residential status for the year as per the income tax rules mentioned above. So, PAN is mandatory for any NRI if he has an Income in India. PAN is not mandatory for opening an NRE or FCNR account in banks.
Key points for NRIs
NRE accounts facilitate inward remittances. Any income which is from foreign soil, when remitted to India shall be remitted to the NRE account to avoid duplicity in taxation.
NRIs can continue to earn income from their assets in India and park the same in their NRO accounts. The taxation of NRO account is different than an resident individual and can be discussed with the PG Financials team.
NRIs can invest in equity’s, mutual funds, debt instruments, etc., through the NRI account. These investments are facilitated through the Portfolio Investment Scheme (PIS), accounts enabled by the Reserve Bank of India, through banks and FIs, to facilitate trading and investments by NRIs in India.
NRIs are also eligible for Home Loans in India but no personal loans or credit cards.
NRI account opening can be facilitate from any base branch of the Bank or FI in India or any branch of the Bank having its regional offices in NRI’s base country.
Interest on NRE accounts are tax free however, the interest on NRO account is taxable under the income tax act and the same is payable by the NRI after filing the income tax return.
