Good news for NRIs : The proposal of Government of India to withdraw the exemption of tax on the interest of NRE/FCNR deposits has been stayed till 31st March, 2005.
NRIs can now avail foreign currency loan in India against the securities of funds held in FCNR (B) deposits accounts.
The scheme is operative against certain conditions issued by RBI which are summarized as below:-
The repayment of the loan will be by way of fresh remittances in foreign currency or by way of adjustment of the deposit proceeds
For further detials contact :
ADCB NRI CENTRE
Tel: 22830184 / 22830185 / 22048547
E mail: adcbnri@bom2.vsnl.net.in
adcbbom@bom2.vsnl.net.in
adcbcr@vsnl.net
Reserve Bank of India further liberalizes rules for repatriation
In terms of guidelines received from Reserve Bank of India, in respect of repatriation of balances held in NRO accounts RBI has decided to remove the present dispensation of permitting different amountfor different purposes and also to enhance the overall limi to USD 1 mio.per calendar year. In terms of said guidelines Authorised Dealers (Persons) can allow remittances upto 1 mio.out of balances held in NRO Accounts/Sale proceeds ofassets (immovable / movable ) on production of undertaking and a certificate by a person making a remittance as stipulated in circular no. A. P. (Dir. Series) Circular No. 27 dated September 28, 2002 read with A.P. (Dir Series) Circular No.56 dated November 26, 2002. The details of the guidelines are given below:
Facilities for remittance of assests held in India by Non-residents
(A) Who is eligible ?
The repatriation facility is available to the following category of person:
(i) Foreign national [other than a citizen of Nepal or Bhutan or a person of India orgin (PIO) Who:
(i) has retired from an employment in India or
has inherited the assests from a person who was a resident in india or
(ii)A widow resident outside india and has inherited assests of her deceased husband who was an Indian Citizen, resident in India.
(II) NRI/PIO Who aquired the assests in question, out of rupee resources when he was in india or by way of legacy/inheritance from a person who was a resident in india
(B) Funds/assests eligible for repatriation
(a ) sale proceeds of immovable property,
(b) assets aquired by way of Inheritance/legacy
(c) a deposit with a bank or a firm or a company
(d ) provident fund balance or supererannuation benifits,
(e) amount of claim or maturity proceeds of insurance policy,
( f ) sale proceeds of shares,securities
( g)any other assest held in India in accordance with the provision of the Act
or Rules or Regulation made there under (as denfined at Regulation 2(v)
of Notifiation No.FEMA 13/2000-RB dated May 3, 2000).
(C) Purpose of remittance
The liberalised remittance facility is available for any bonafide purpose.
(D) General condition to be satisfied for repatriation of assests.
(i) Documentary evidence in support of the acquisition of the funds /assets proposed to be remitted.
(ii) undertaking and certification relatin to tax compliance
(E) specific condition relating to repatriation of sale proceeds of immovable property
(i) Repatriation of sale proceeds of immovable property acquired out of Rupee fund is available subject to the condition that the proprety should have been held for a minimum perid of 10 years. If such a property acquired out of Rupee funds 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 in NRO Account (Savings/ Term Deposits) or in any other eligible security, provided such investment is traced to the sale proceeds of the immovable property.
(ii) There is no lock-in-period in respect of immovable property acquired by way of-
(a) Inheritance/legacy.
(b) Foreign currency funds (through inward remittance or by debit to FCNR/NRE accounts
(iii) Remittance of sale proceeds of immovable property acquired by way of inheritance/legacy to a citizen of Pakistan,Bangladesh,Sri Lanka,China,Afghanistan,Iran,Nepal and bhutan will continue to require prior approval of RBI.
(F) Remittance Procedure
(i) In case, the remittance is to be made in more than one instalment,the remittances of all instalments should be remitted through the same authorised dealer.
(ii) It is also clarified that the remittance facility is available even if the NRI/PIO/Foreign National is not maintaining any NRO account. However,The remittance should be routed through banking channel only, subject to tax compliance.
Revised Guidelines in respect of Income Tax clearance
While effecting the remittance in foreign currency on account of NRI / PIOs in terms of Income Tax act, Bank is required to deduct income tax at the rate in force.
In terms of recent guidelines received from RBI, Banks have been permitted to effect remittance without insisting upon no objection certificate from income tax department and on the basis of the submission of an undertaking in duplicate addressed to the Assessing Officer accompanied by a certificate from an Accountant (other than an employee).
This procedure will be applicable to all such remittance being effected under FEMA on behalf of NRIs/PIOs.
Reserve Bank of India has also further clarified that those NRIs/PIOs who have no taxable income in India and those who do not maintain NRO accounts in India need not submit a Chartered Accountant certificate for remitting their current income like Dividend / Pension / etc. In such cases NRIs/PIOs may submit a simple declaration in duplicate that he/she is not a taxpayer in India.
Where the NRIs / PIOs maintain NRE /NRO accounts such current income can be credited to NRO account or NRE account upon submission of such declaration as mentioned in earlier para where the NRIs / PIOs have no taxable income in India.
RBI permit NRIs/PIOs to repatriate funds :
RBI further liberalises Exchange Control Regulations. Banks are now allowed to permit NRIs/PIOs to repatriate funds out of balances held by NRIs/PIOs in their Non Resident Ordinary Rupee (NRO) Accounts, for the following purposes.
