FAQs NRI FAQ

Who is a Non Resident India (NRI)?

As per Income Tax Act:

Non Resident Indian is a person who is not a resident of India.

An individual is deemed to be a resident, if

(A) Individual has resided in India in that year for 182 days or more or
(B) Having within the 4 years preceding that year been in India for 365 days or more and is in
India for 60 days or more in that year.

Exceptions to residential status are

 Individual who is a citizen of India and who leaves India in any financial year for the
purpose of employment outside India
 Individual who is a citizen of India or is a person of Indian origin (PIO) and who being
outside India comes on a visit to India in any financial year.

"B" condition stated above shall not be applicable and individual status will be determined only
by "A" condition in both the above cases.

Who is a Person of India Origin (PIO)?

A PIO refers to a citizen of any country (other than Bangladesh, Pakistan, Afghanistan, Bhutan,
China, Nepal and Sri Lanka) if:

A) He/She holds an Indian passport OR

B)He/She or either of his parents or any of his grandparents was a citizen of India OR

C)The person is a spouse of an India citizen or a person referred to in (A) or (B)

Who is an Overseas Citizen of India (OCI)?

An OCI refers to a Person of Indian Origin (PIO) who was a citizen of India on January 26, 1950
or thereafter or was eligible to become a citizen of India on January 26, 1950 if:

 He/she used to be an Indian citizen

 At least one parent, grandparent or great grand parent should have been an Indian
citizen
 Married to an Indian citizen or existing OCI for at least 2 continuous years.

What are the different types of rupee accounts that are permitted and can be maintained by
NRIs?

The 3 types of rupee accounts that can be maintained by NRIs are:

  NRE- Non Resident ( External) Rupee Account
 NRO- Non Resident ( Ordinary) Rupee Account
 FCNR-Foreign Currency Non Resident (Bank) Account

What are NRE, NRO and FCNR accounts?

NRE accounts are opened for NRIs and it is also a rupee denominated account. This account is
fully repatriable i.e. principal and interest amount both can be moved from India to the foreign
country where the NRI is residing. All NRIs can open a NRE account. However, individuals and
entities of Bangladesh and Pakistan require prior approval from the Reserve Bank of India.

NRO accounts are opened for only those individuals who are leaving India to take up an
employment or establishing business outside India and is a rupee denominated account. Local
funds that are not eligible to be remitted abroad must be credited to an
NRO account. This account has restricted repatriablity .Any person resident outside India ( other
than a person resident in Nepal and Bhutan) can open a NRO account. Individuals and entities
of Bangladesh and Pakistan require prior approval from the Reserve Bank of India.

FCNR accounts are opened by NRIs and is denominated in any foreign currency which is freely
convertible. This account is fully repatriable i.e. principal and interest amount both can be
moved from India to the foreign country where the NRI is residing. All NRIs can open a NRE
account. However, individuals and entities of Bangladesh and Pakistan require prior approval
from the Reserve Bank of India.

Does a NRI or PIO require any approval from RBI to invest in mutual fund schemes?

No.

Can a NRI invest in foreign currency?

An NRI cannot make an investment in foreign currency. He needs to give us a rupee cheque
from his NRE or NRO account in India.

What is the mode of payment for Repatriation and Non- Repatriation basis?

Repatriation basis: Payments for the purchase of units may be made by India rupee drafts
purchased abroad or by cheques drawn on the NRE account.

Non-Repatriation basis: Payments for the purchase of units may be made by India rupee drafts
purchased abroad or by cheques drawn on the NRO account.

Will the fund accept a NRI application with overseas bank account details?

No

How will the redemption proceeds be paid?

Redemption proceeds will be paid by a cheque payable to the first holder. The proceeds will be
payable in India rupees. Tax shall be deducted at source.

What is the tax liability on redemptions and dividend income?

Click here for detailed information on taxation.

What is the proof of Tax Deducted at Source (TDS)?

A TDS certificate is issued in the name of the first unit holder mentioning the details of the
transaction and the tax deducted

When will the TDS certificate be issued?

TDS Certificates ( Form 16A) are dispatched to the investors once a quarter.

Can a Power of Attorney (POA) invest on behalf of a NRI investor?

Yes. A POA has the authority to invest on behalf of the NRI investor and sign documents for
initial and additional purchases as well as redemptions. While applying for purchase of units, the
POA holder needs to submit the original POA or a copy duly notarized in original. The POA
documents should contain the signatures of the Sole/First holder and the POA holder. The POA
holder has the right to transact on behalf of the NRI only when the POA is registered

Can a NRI investor register a nominee?

Yes