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REGULATIONS FOR NR

ACCOUNTS

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Non Resident (NR)

The term NR has not been defined in Foreign

exchange regulations and taxation rules invarious countries.

Viz. An NRI is a person resident outside Indiawho is a citizen of India and goes outside

country for definite/indefinite period for

occupation.

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Person of Indian Origin (PIO)A PIO has been broadly defined as a citizen of any

country if:

at anytime he has held an Indian passport; or If he or either of his parents or grand parents

was a citizen of India by virtue of Constitution ofIndia of the Citizenship Act 1955; or

the person is a spouse of an Indian citizen or aperson referred to in sub-clause (a) or (b) above.

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Cont.

Deposits & Investment Opportunities: NRs can opendeposit account , investment & any business in their

home country. Neither is there any specific bar under

Company Law nor are they accorded any preferential

treatment over other foreign and Indian Citizens.

Issues Relating to Borrowing & Lending: The Issuesand Limitations relating to borrowings and Lending has

been regulated by Foreign Exchange Management of

the country.

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Accruing Income Tax Benefits

Income Tax Act in most of the countries exempting the entireincome from specified housing projects from income tax invites FDIand NRIs to rush to India.

It exempts an industrial undertaking's entire income from developingand building approved housing projects in which the housingproject is approved by the local authority; and the project is on a plotof land admeasuring at least one acre.

Further, the conditions relating to the time limit for completion of theproject and minimum size of plot are also waived in respect of thehousing project carried out in accordance with the notified scheme

framed by the Central or State Government for reconstruction orredevelopment of existing buildings in areas declared to be slumareas

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Whats an NRE account?

A Non-Resident External (NRE) account is

a bank account thats opened by

depositing foreign currency at the time of

opening a bank account. This currency

can be tendered in the form of travelers

checks or notes.

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Whats an NRO account?

A Non-Resident Ordinary (NRO) account

is the normal bank account opened by an

Indian going abroad with the intention of

becoming an NRI. An NRI can also open

this account by sending remittances fromhis home country or by transferring funds

from his other NRO account. It offers the

same facilities as an NRE account, exceptthat any repatriation done through this

account should be reported to RBI by

filling up prescribed forms.