In the course of the years there are a number of Indians who have settled overseas. They have either established their own businesses or built a successful career for them there and are sending money to their near and dear one in India.
With more and more transfer of money from abroad to India and vice versa, the NRI banking rules and regulations have evolved continuously. Today, there are a number of banks as well as non-financial institutions that have been authorized by the Reserve Bank of India (RBI) to deal in NRI banking. This means the maintenance of NRI bank accounts, aiding in money transfer, insurance as well as loans.
When it comes to NRI banking, Indian living abroad can opt to open the following type of accounts-
• Foreign Currency Non-Resident Account (FCNR) - Such accounts are meant for term deposits, with a time duration that can either be up to one year or even 3 years.
• Non-Resident External Account (NRE) - This account holds Indian rupees. Thus foreign money that is transferred to the account is converted to Indian money before it is deposited.
• Non-Resident Ordinary Account (NRO) – It is a normal savings bank account that is held by an NRI in the country.
Here are some facts that one should know about NRI banking in India-
1. An NRI bank account and all activity that is related to it can be handled by an individual who is living in the country, on the behalf of the account holder. The account holder only has to give this trusted person the power of attorney. But, the person who holds the power of attorney does have certain limitations. He cannot make gifts of the money that is there in the bank account and is also not allows to transfer money outside the country.
2. Another important fact that an NRI should know is that he can invest in shares as well as securities of companies and organizations that are Indian. In fact, an NRI can also invest in government securities. One can make such investments through their NRO/NRE account.
3. NRI’s should be aware that any interest that they earn on deposits made in their FCNR bank account is exempted from tax deduction under the Indian NRI banking tax law. Thus, they can make effective use of their FCNR bank account to build-up some savings.
4. NRI’s should be aware that any interest that they earn on deposits made in their NRO bank account is not exempted from tax deduction under the Indian NRI banking tax law.
NRI banking in India has a number of features that one should be aware of in order to take full advantage.
With more and more transfer of money from abroad to India and vice versa, the NRI banking rules and regulations have evolved continuously. Today, there are a number of banks as well as non-financial institutions that have been authorized by the Reserve Bank of India (RBI) to deal in NRI banking. This means the maintenance of NRI bank accounts, aiding in money transfer, insurance as well as loans.
When it comes to NRI banking, Indian living abroad can opt to open the following type of accounts-
• Foreign Currency Non-Resident Account (FCNR) - Such accounts are meant for term deposits, with a time duration that can either be up to one year or even 3 years.
• Non-Resident External Account (NRE) - This account holds Indian rupees. Thus foreign money that is transferred to the account is converted to Indian money before it is deposited.
• Non-Resident Ordinary Account (NRO) – It is a normal savings bank account that is held by an NRI in the country.
Here are some facts that one should know about NRI banking in India-
1. An NRI bank account and all activity that is related to it can be handled by an individual who is living in the country, on the behalf of the account holder. The account holder only has to give this trusted person the power of attorney. But, the person who holds the power of attorney does have certain limitations. He cannot make gifts of the money that is there in the bank account and is also not allows to transfer money outside the country.
2. Another important fact that an NRI should know is that he can invest in shares as well as securities of companies and organizations that are Indian. In fact, an NRI can also invest in government securities. One can make such investments through their NRO/NRE account.
3. NRI’s should be aware that any interest that they earn on deposits made in their FCNR bank account is exempted from tax deduction under the Indian NRI banking tax law. Thus, they can make effective use of their FCNR bank account to build-up some savings.
4. NRI’s should be aware that any interest that they earn on deposits made in their NRO bank account is not exempted from tax deduction under the Indian NRI banking tax law.
NRI banking in India has a number of features that one should be aware of in order to take full advantage.
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