TIPS FOR NON-RESIDENT INDIANS (PART 4 OF 5)

F. PLEASE REMEMBER
1. Both resident and non-resident Indians can become joint account holders of NRO Account.
2. Only NRIs can become joint account holders of an NRE account.
3. You can transfer funds from an NRE account to an NRO account or repatriate it to another country.
4. You cannot transfer funds from an NRO account to an NRE account.
5. A resident Indian can also operate the NRE account, apart from the account holder(s), for making local payments and handling existing investments, as long as he has the Power of Attorney, but not for opening new investments.
6. As an NRI, you will not be eligible to invest in PPF and small savings.
7. For mutual funds investments, a new KYC (know your customer) form will have to be filled up again, mentioning the change in your residency status as NRI, and also your NRO account number, so that SIP debits can take place smoothly.

8. Maintain your life insurance, mediclaim insurance and home insurance in India, as they are all valid for NRIs. However, claims are not met for hospitalization abroad, so an addition mediclaim insurance can be taken in the foreign country for local use.

G. INCOME REPATRIATION RULES FOR NRIs

·         The source of funds used by a NRI should be identified at the time of investing in order to decide if the money can be taken outside the country on sale or redemption.
·         If the source of funds is foreign currency, it can be sent without any restriction.
·         If, however, it is Indian rupees, it cannot be remitted.
·         These two sources cannot be clubbed together.
·         The bank account through which the investment is routed is used to determine the source of funds.
·         The funds that are remitted from abroad into the NRE or FCNR accounts and invested can be freely sent back.
·         The income earned in India on investments is repatriable, irrespective of the source of funds.
·         This includes interest from bonds and bank accounts, rental income, dividends from shares and mutual funds.
·         The income earned on an investment is freely repatriable once the taxes have been paid according to the Indian laws.
·         The income in the form of sale proceeds from capital assets, such as property, land, shares, bonds, and mutual funds held in India, are repatriable to the extent of funds remitted from abroad for buying these capital assets.