Frequently asked questions
Can a Returning Indian hold Overseas Assets?
What shall be the impact on Indian Assets?
Non-Resident Ordinary (NRO) a/c : To be re-designated to Resident a/c
Foreign Currency Non-Resident (FCNR) a/c : Permissible to hold up to maturity and then to be converted into Rupee Account or Resident Foreign Currency (RFC) a/c*
Non-Resident External (NRE) a/c : To be re-designated to Resident a/c or balance can be transferred to RFC a/c*
Shares & Securities: Returning India is required to inform the Depository about change of his/her residential status from non-resident to resident
NRIs are returning to India for good. Is he required to inform anyone on his return to India permanently?
All bankers with whom they hold banking accounts and get it redesignated,
Depository participant with whom they hold DEMAT accounts,
Companies where NRIs are Shareholders / Debenture holders and firms where they are partners.
Whether a Returning Indian is required to inform Government Authorities about his change in residential status and overseas assets that he holds?
What shall be the tax implications on a returning Indian as per the Act?
The tax liability of a person returning to India would depend on the Residential Status of a person as per the Act.
Under the Act, income earned outside India is liable to tax in India only if the person is ROR.
A returning Indian who has been a NR as per the Act for 9 years or more or whose stay in India was less than 729 days in preceding 7 years, then generally for 2 successive years he may be considered as a RNOR.
Interest paid by schedule banks to NRI or to a RNOR on RFC deposits is exempt from tax under the Act. The exemption, in respect of RFC account, continues till such time as the account holder continues to be a RNOR.
Pension from NRI’s former employer after return to India may be liable to tax in India subject to provisions of the Double Taxation Avoidance Agreement between India and the country from which the NRI is receiving such amount (and was resident in).
What is the best time for Returning Indian to move to India for their permanent return?
A Returning Indian should try to come back on or after February 1 (or February 2 in case of a leap year) of a FY in order to ensure NR status in the year of return.
When non-residents return to India for good, are they allowed to keep foreign currency balances held in NRE / FCNR a/cs?
Returning Indians, i.e. those Indians, who were non-residents earlier, and are returning now for permanent stay, are permitted to open, hold and maintain with an Authorized Dealer in India a RFC a/c to keep their foreign currency assets. Assets held outside India at the time of return can be credited to such accounts. The funds in RFC a/c are free from all restrictions regarding utilization of foreign currency balances including any restriction on investment outside India. The facility is also available to residents provided foreign exchange to be credited to such account is received out of certain specified type of funds/accounts.It shall be noted that returning Indians are required to re-designate their NRE / FCNR a/c to Resident / RFC a/c immediately on their return to India.
Can funds in RFC a/cs be remitted abroad?
What is the tax treatment of interest on RFC a/c?
Interest on RFC a/c will be exempt from tax so long as returning Indian’s residential status under the Act is determined as “Non-Resident” or “RNOR”.
Is RBI permission required to be obtained by the NRI for retaining assets abroad after his return to India?
Can the benefit of concessional tax treatment provided under Chapter XIIA comprising section 115C to 115L be continued even after the NRI returns to India?
The benefit of concessional tax treatment under Chapter XIIA may continue even after NRI becomes a resident subject to conditions specified in the Act.