Indian Consulate On-Line

Investment & Other Facilities for Non-Resident Indians

Miscellaneous

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Question-132: Are any tax concessions available to NRIs on balances/deposits held in NRE/FCNR accounts ?

Answer:
Yes. Income from interest on moneys standing to the credit of NRE/FCNR accounts is exempt from Income-tax. Gifts from such accounts are also free of Gift-tax.

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Question-133: Are similar concessions available in respect of balances held in NRO accounts ?

Answer:
No.

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Question-134: What are the tax benefits to the NRNR deposit account holders ?

Answer:
They enjoy the following tax benefits:
  1. Income from the deposits will be free from Indian Income-tax.
  2. The deposit will also be exempt from Gift Tax for onetime gifting (in the case of NRIs only).
  3. Exemption from Income-tax will not be available to resident donee and those residents, who being joint holders,become owners of the deposit as survivor of the non-resident depositor.

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Question-135: What about tax benefits on funds held in FCNR accounts ?

Answer:
Tax exemption on interest earned on deposit held in foreign currency is available to non-residents and persons who are not ordinarily resident in India as defined under Income-tax Act, 1961.

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Question-136: What is the approved method of sending remittances into India ?

Answer:
The approved method of sending remittances into India is through normal banking channels.

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Question-137: At what rates are remittances in foreign currencies made by NRIs converted by banks into rupees ?

Answer:
Such remittances will be converted by banks at the market rate of exchange.

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Question-138: Can remittances be sent into India otherwise than through the medium of a bank in the country of residence of the remitter ?

Answer:
Yes. Exchange Houses in the Gulf countries have been permitted to send remittances into India by means of DDs, MTs and TTs drawn on banks in India.

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Question-139: Can Exchange Houses draw drafts in foreign currencies ?

Answer:
Yes. Exchange Houses can draw drafts in U.S. dollar or Pound Sterling on a limited number of branches of the drawee bank in India, if they have entered into such an arrangement with the drawee bank.

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Question-140: Can NRIs remit funds through Exchange Houses for investment in Government securities, National Savings Certificates and Units of Unit Trust of India ?

Answer:
Yes.

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Question-141: Can NRIs remit funds through Exchange Houses for investment in shares/ debentures of Indian companies ?

Answer:
Yes, subject to general/specific permission of Reserve Bank for such investment.

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Question-142: Can NRIs send drafts issued by Exchange Houses for acquisition of residential flats in India ?

Answer:
Yes. NRIs can send drafts issued by Exchange Houses in favour of Co-operative Housing Societies/estate developers for acquisition of residential flats in India in individual names.

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Question-143: Can NRIs remit premia on policies issued by the Life Insurance Corporation of India by means of drafts issued by Exchange Houses in favour of the Corporation ?

Answer:
Yes.

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Question-144: Can NRIs remit tution/boarding/examination fees of their children studying in India by means of drafts issued by Exchange Houses in favour of schools, colleges, universities,technical and educational institutions in India ?

Answer:
Yes.

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Question-145: Is there any other approved method through which NRIs can send remittances to India ?

Answer:
Yes. Personal remittances for private purposes can be sent through certain agencies approved by Reserve Bank.

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Question-146: Can such remittances be allowed to be credited to bank accounts of NRIs or utilised for making investment in India ?

Answer:
No.

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Question-147: Can NRIs take out of India precious stones or jewellery purchased by them during their visit to India ?

Answer:
Yes. NRIs can take out of India precious stones and jewellery (both gold and non-gold) purchased by them in India, without any limit, provided the purchase is made against payment in any convertible foreign currency.

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Question-148: Can NRIs take out of India household articles purchased out of funds in NRO accounts during their temporary visit to India ?

Answer:
Yes. RBI permits on application such requests received from NRIs upto the value of Rs. 20,000 for articles other than those made of gold or silver or those banned for exports.

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Question-149: Can NRIs settle their hotel bills in India in Indian rupees ?

Answer:
Yes.

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Question-150: Can assets held in India by NRIs prior to their becoming non-resident be repatriated outside India ?

Answer:
No.

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