New NRI or Recently Migrated NRI – Indian Laws

For their good, many Indian citizens leave the country and go abroad. These person find an employment abroad. A prevailing term for them is Non-Resident Indians (NRIs). And once the get a citizenship of the other country they called as Overseas Citizens of India (OCIs) or Person of Indian Origin Residing Abroad (PIOs).

While leaving India and/or during living abroad, there are various procedures and compliances, which these NRIs need to take care.

Hereunder are some relevant points, which can be considered by recently migrated NRIs, OCIs:

Holding of Indian Assets – NRI

Migrating Indians can hold their Indian assets ie Bank Accounts, Deposit Accounts, Shares, Mutual Funds, Immovable Properties etc. RBI Regulations allow NRIs to hold these investments subject to certain conditions or processes eg intimation to concerned institution etc.

Intimation To Bank – NRI

As per RBI Regulations (under FEMA), migrating Indians need to intimate bank of their status about leaving the country for employment outside India. Accordingly, the bank will redesignatetheir bank account into NRO category.

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Intimation to Depository Participant (DP), Mutual Fund Broker etc – NRI

Indian citizen migrating abroad need to intimate its banker, broker or portfolio manager about his migration to other country. DP/Broker shall note this fact into the portfolio system and categorised his account as NRI category.

Opening New NRO, NRE, FCNR Bank Accounts – NRI

A recently migrated NRI or abroad living NRI or OCI can open a new account with Indian Banks in India. These accounts can be NRO, NRE or FCNR Deposit account. NRO and NRE are Rupee account and FCNR is foreign currency account for deposit purposes. These bank accounts have their own advantages and can be opened by the NRIs as per their need. Generally, NRO and NRE accounts are opened by many NRIs and are very useful for doing financial transactions in India. Interest income from NRE account is exempt from tax in India.

Remittance of Indian Assets/Funds Abroad – NRI

On migrating abroad, NRIs are allowed to remit/repatriate their funds/bank balance abroad. Under the RBI Regulations, each NRI (including minor) is allowed to remit one million USD in a year from Indian bank account to their foreign bank account without any prior approval of RBI.

Authorisation To Indian Relative or Advisor – NRI

Migrating Indian may give an authorisation (via Power of Attorney etc) to someone in India (either his relative or their family professional) for his various financial/legal/other matters in India.

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Investment In Indian Companies – NRI

NRIs are allowed to invest in Indian Companies. However, these investments are subject matter of Foreign Direct Investment Policy of Govt of India (governed through RBI Regulations). The investment can be on Repatriation basis as well Non-Repatriation basis.

Investment In India Proprietorship Firm or Partnership Firm – NRI

Migrating Indian NRIs, are allowed to do investment in Indian Proprietorship Firms and Partnership Firms. This investment is subject matter of RBI Regulations. NRIs are not allowed to invest in these firms for directly or indirectly acquiring/doing agriculture activity or plantation activity.

Purchase of Property in India – NRI

NRIs are allowed to acquire an immovable property in India. However, the acquisition of immovable property shall be subject matter of RBI regulations. Further, NRIs are not allowed to acquire any agriculture property or plantation property.

Double Tax Avoidance Agreement (DTAA) – NRI

There may be circumstances, when NRI income is being subject matter of taxation in two countries i.e India as well the country where NRI has moved. In those situations, NRI can seek benefit of DTAA. Under DTAA either the NRI will have to pay taxes in one country or if taxes are paid in one country he can avail credit of that tax in his home tax country.

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Indian Transaction Wrt Tax Withholding – NRI

NRI need to intimate his NRI status to the person with whom he is doing any transaction in India. Eg if NRI receives any rental income form a property in India then he need to mention his status to his tenant. Under the provisions of section 195 of the Income Tax Act, NRI TDS shall be at the maximum rates as per this section. Similarly, if NRI is entering into selling of any property in India then also he need to intimate his status to the buyer as NRI and again TDS shall be as per the provisions of section 195.

Usefulness of Above Information

Above information can be helpful to NRIs, Migrating Indians and Other Non-Residents in relation to their various doubts about Indian laws wrt migrating Indians NRIs such as:

  • I am an Indian citizen. I am planning to move abroad. What are the provisions I need to know about Indian Laws?
  • I am a recently migrated NRI. What are the provisions of Indian Laws wrt migrating NRIs?
  • As I am moving out of India for employment abroad, what are the authorities where I need to intimate about my intention to move abroad?
  • I am an Indian citizen. I am migrating abroad. What do I need to do in relation to my bank account and other investments in India?
  • I am recently moved NRI. How much money can I remit from my Indian bank account to abroad? What kind of investments as an NRI I can make in India?
  • I am a new NRI. I recently migrated abroad. I need Chartered Accountant (CA) Services for NRI Tax ITR, NRI Capital Gains Tax, NRI 15CA 15CB Services?
  • I am planning to migrate abroad. I need a CA in Delhi/Mumbai for understanding various provisions of India Laws including NRI Tax Matters, NRI Reporting Under Various Laws, NRI ITR, NRI TDS Exemption Certificate, NRI 15CA 15CB Services, NRI Tax, NRI Fema etc?