Sunday 15 January 2012

NRI INVESTMENT OPTIONS


    
        Bank Accounts
        Property
        Company FDs
        Govt. Securities
        Shares
        Repatriable Investments
        Non Repatriable
        Insurance


      Bank Accounts:
        How does an NRI open an account?
        What are the various kinds of NRI accounts which can be opened?
        How is an NRE account different from an NRO?
        What is the minimum balance required to be maintained in the various
        accounts?
        In the NRNR type of scheme is the interest component repatriable?
        Is there a facility of a loan against FCNR deposits, if so what are the
        prevailing rates of Interest?
        How does one qualify for availing portfolio management services for the
        NRIs?
        Is the interest rate SIMPLE or COMPOUNDED?If Compounded then at what
        period?
        Can joint accounts be opened? If so then does the other holder necessary
        has to be an NRI, can he be an Indian resident?
        What about exchange risks?
        It is required to pay tax on the deposit and interest?
        In case of a joint account held along with a resident Indian, what are
        the tax implications, on the interest income, is it for the resident
        Indian or for the NRI to take care of the Tax payments?
        Can any resident Indian be authorised to operate the account?
     
How does an NRI open an account?
      Very simple! Just fill in the "account opening form" and send it to any of
      the branches along with the remittance, which could be by Cheque, Draft,
      or a Telegraphic transfer.
     

What are the various kinds of NRI accounts which can be opened?
      NRI accounts can be broadly classified into FCNR, NRNR, NRE, & NRO
      accounts.
      FCNR accounts are those where the money remitted from abroad is kept in
      foreign currency and the entire exchange risk is borne by the the Bank .
      NRE & NRO accounts are those where the deposit is maintained in Rupee
      currency .
      NRNR deposits are those which are maintained in Indian Rupees on and the
      funds cannot be repatriated. However the interest earned on the NRNR
      deposit is repatriable and can be linked to the NRE account for outward
      remittances.
    
How is an NRE account different from an NRO?
      Funds remitted from abroad or local funds which can otherwise be remitted
      abroad to the account holder, can be credited to NRE accounts. Local funds
      which do not qualify for remittance abroad are required to be credited to
      NRO accounts.
     

What is the minimum balance required to be maintained in the various
      accounts?
      Saving account for NRE & NRO schemes require a minimum balance of Rs 5000/
      and FCNR deposits need to have foreign currency equivalent of USD 10,000 .
    
In the NRNR type of scheme is the interest component repatriable?
      Yes. The interest component is fully repatriable.
     
Is there a facility of a loan against FCNR deposits, if so what are the
      prevailing rates of Interest?
      Yes.Loans can be taken not only against FCNR deposits but also against
      other NRI deposits. The rate of interest on FCNR loans charged to the Bank
      depends upon the rate of interest applicable to FCNR deposit, prevailing
      forward cover costs and Bank's nominal spread.
     
How does one qualify for availing portfolio management services for the
      NRIs?
      Minimum requirements here are that the account should have a minimum
      balance of Rs.100,000/ in the account. The portfolio should have a minimum
      size of Rs. 50 lacs and the transaction amount should be at least 1 lac.
     
Is the interest rate SIMPLE or COMPOUNDED ? If Compounded then at what
      period?
      All Interest rates are compounded quarterly. But for FCNR the interest is
      compounded on 180 days basis.
     
Can joint accounts be opened? If so then does the other holder necessary
      has to be an NRI, can he be an Indian resident?
      Yes, joint accounts can be opened and it is only in case of Non
      repatriable deposits (NRO) (NRNR) that joint accounts can have a close
      relative who is a Indian resident as a joint holder, otherwise for all
      other accounts the joint holders have to be NRIs.
    
What about exchange risks?
      Exposure to exchange rates vary from one account to the other. In case of
      accounts which holds funds in Indian rupees as in NRO, NRE, NRNR the
      exchange risk is borne by the depositor. In case of accounts which holds
      money in foreign currency, the amount is fully insulated against exchange
      risk.
     
It is required to pay tax on the deposit and interest?
      In case of NRO accounts the deposit is subjected to wealth tax for the
      deposit amount and income tax at source for the interest earned. For all
      the other schemes Deposit and Interest earned is exempt from Indian income
      tax.
     
In case of a joint account held along with a resident Indian, what are the
      tax implications, on the interest income, is it for the resident Indian or
      for the NRI to take care of the Tax payments?
      Deposits and interest are exposed to income tax only in case of NRO
      accounts, all the other account types are not subject to income tax. And
      also it is only in case of NRNR accounts that that an Indian resident is
      allowed to be a joint A/C holder. So in effect the resident Indian is not
      exposed to any tax obligations.
   


Can any resident Indian be authorised to operate the account ?
      Yes. A resident Indian can be authorised to operate the account but only
      through a power of attorney/letter of authority. Operations are restricted
      for local payments and "permitted transactions" for which general or
      specific permission of Reserve Bank of India is available.
Property
Non-resident Indian citizens do not require permission of Reserve Bank to acquire residential/commercial property in India. Reserve Bank has granted general permission to foreign citizens of Indian origin, whether resident in India or abroad, to purchase immovable property in India for their bona fide residential purpose. They are, therefore, not required to obtain permission of Reserve Bank. Foreign citizens of Indian origin can acquire any immovable property other than agricultural land/farm house/ plantation property in India by purchase, from out offunds received in India by way of inward remittance from any place outside India funds held in any non-resident account maintained in accordance with the provisions of the Act and the regulations made by the Reserve Bank under the Act by way of gift from a person resident in India or from a person resident outside India who is a citizen of India or from a person of Indian origin resident outside India acquire any immovable property in India by way of inheritance from a person resident outside India who had acquired such property in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations (FEMA) or from a person resident in India; They are required to file a declaration in form IPI 7 with the Central Office of Reserve Bank at Mumbai within a period of 90 days from the date of purchase of immovable property or final payment of purchase consideration along with a certified copy of the document evidencing the transaction and bank certificate regarding the consideration paid. Reserve Bank has granted general permission for sale of such property. However, where the property is purchased by another foreign citizen of Indian origin, funds towards the purchase consideration should either be remitted to India or paid out of balances in NRE/FCNR accounts.In the event of sale of immovable property other than agricultural land/farm house /plantation property in India by a person resident outside India who is a citizen of India or a person of Indian origin, the authorised dealer may allow repatriation of the sale proceeds outside India, provided the following conditions are satisfied, namely -the immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or the provisions of these Regulations; the sale takes place after three years from the date of acquisition of such immovable property or from the date of payment of final instalment of consideration for its acquisition, whichever is later; and the amount to be repatriated does not exceed the amount paid for acquisition of the immovable property in foreign exchange received through normal banking channels or out of funds held in Foreign Currency Non-Resident Account or the foreign currency equivalent ,as on the date of payment, of the amount paid where such payment was made from the funds held in Non-Resident External account for acquisition of the property; in the case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties. Applications for repatriation of sale proceeds are considered provided the sale takes place after three years from the date of final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. Applications for necessary permission for remittance of sale proceeds should be made in form IPI 8 to the Central Office of Reserve Bank at Mumbai within 90 days of the sale of the property. Reserve Bank has granted general permission to foreign citizens of Indian origin to acquire or dispose of properties up to two houses by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin whether resident in India or not, subject to compliance with applicable tax laws. General permission has been granted by Reserve Bank to non-resident persons (foreign citizens) of Indian origin to transfer by way of gift immovable property held by them in India to relatives and charitable trusts/organisations subject to the condition that the provisions of any other law, including Foreign Contribution (Regulation) Act, 1976, as applicable, are duly complied with. Under the general permission granted by Reserve Bank properties other than agricultural land/farm house/plantation property can be acquired by foreign citizens of Indian origin provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchasers' NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final instalment of consideration amount, whichever is later. Applications for the purpose are required to be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation. Reserve Bank has granted general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc., and authorised dealers to grant housing loans to non-resident Indian nationals for acquisition of a house/flat for self-occupation subject to certain conditions. The purpose of the loan, margin money and the quantum of loan will be at par with those applicable to housing loans to residents. Repayment of loan should be made within a period not exceeding 15 years out of inward remittances or out of funds held in the investors' NRE/FCNR/NRO accounts. Reserve Bank permits Indian firms/companies to grant housing loans to their employees deputed abroad and holding Indian passports subject to certain conditions. Authorised dealer can grant housing loan to non-residents of Indian nationality where he is a principal borrower with his resident close relative as a co-obligant/guarantor or where the land is owned jointly by such NRI borrower with his resident close relative. However, in such cases the payment of margin money and repayment of the loan instalments should be made by the NRI borrower. Top 
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      Company FDs
                  General permission to Indian companies (including non-banking
                  finance companies registered with Reserve Bank) has been
                  granted to accept deposits from NRIs/PIOs/OCBs with
                  repatriation benefits subject to certain conditions.
                  A company registered under Companies Act, 1956 or a body
                  corporate or created under an act of Parliament or State
                  Legislature (including a non-banking finance company
                  registered with Reserve Bank) may accept deposits from a NRIs,
                  on repatriation basis subject to the following conditions -
                    The deposits are received under a public deposit scheme.

                    If the deposit accepting company is a non-banking finance
                    company, it should be registered with the Reserve Bank and
                    should have obtained the required credit rating as
                    stipulated under the guidelines issued by Reserve Bank for
                    such companies.

                    The amount representing the deposit is received by inward
                    remittance from outside India through normal banking
                    channels or by debit to the Non-Resident (External) Account
                    or Foreign Currency (Non-Resident) (Bank) Account maintained
                    with an authorised dealer/authorised bank in India.

                    If the deposit accepting company is a non-banking finance
                    company the rate of interest payable on deposits shall be in
                    conformity with the guidelines/directions issued by Reserve
                    Bank for such companies. In other cases the rate of interest
                    payable on deposits shall not exceed the ceiling rate
                    prescribed from time to time under the Companies (Acceptance
                    of Deposit) Rules, 1975.

                    The maturity period of deposits shall not exceed 3 years.

                    The company accepting the deposits shall comply with the
                    provisions of any other law, rules, regulations, orders
                    issued by the Government of India or any other competent
                    authority, as are applicable to it in regard to acceptance
                    of deposits.

                    The amount of aggregate deposits accepted by the company
                    shall not exceed 35% of its net owned funds.

                    The payment of interest net of taxes may be made by the
                    company to the depositor by remittance through an authorised
                    dealer or by credit to the depositor's
                    NRE/FCNR(B)/NRNR/NRO/NRSR account as desired by him.

                    The amount of deposits so collected shall not be utilised by
                    the company for re-lending (not applicable to a Non-Banking
                    Finance Company) or for undertaking agricultural/plantation
                    activities or real estate business or for investing in any
                    other concern, firm or a company engaged in or proposing to
                    engage in agricultural/plantation activities or real estate
                    business.

                    The repayment of the deposit may be made by the company to
                    the depositor by remittance from India through an authorised
                    dealer or by credit to the depositor's NRE/FCNR(B) account
                    maintained with an authorised dealer in India, provided the
                    depositor continues to be a nonresident at the time of
                    repayment. While applying to the authorised dealer for
                    remittance of maturity proceeds of deposit or credit thereof
                    to NRE/FCNR(B) account , the company should certify that the
                    amount of deposit was received either by inward remittance
                    from outside India through normal banking channels or by
                    debit to the depositor's NRE/FCNR(B) account, as the case
                    may be.

                    The amount representing repayment of deposit may also be
                    credited to the depositor's NRNR/NRO or NRSR account, at the
                    depositor's option.
                  
      Govt. Securities
                  NRIs are freely permitted to invest their funds in Government
                  securities or Units of UTI through authorised dealers. Units
                  can also be purchased directly from UTI.
                  Investments in National Savings Certificates can be made by
                  NRIs subject to the terms and conditions applicable to the
                  sale/issue of such certificates. However, NRIs are not
                  permitted to invest in bearer securities like Indira Vikas
                  Patra/Kisan Vikas Patra.
                  Government securities and units can be freely transferred or
                  sold provided the transfers/sales are arranged through an
                  authorised dealer. Units can, however, be repurchased directly
                  by UTI.
                  If such securities were purchased out of funds remitted from
                  abroad or out of NRE/FCNR accounts, sale/maturity proceeds can
                  be repatriated. Sale/maturity proceeds of securities purchased
                  out of funds in NRO accounts can only be credited to NRO
                  accounts and cannot be remitted abroad. Interest earned during
                  the financial year 1994-95 and onwards can, however, be
                  remitted to the extent permitted by Reserve Bank.
                 

      Shares
      NRIs are permitted to make direct investments in proprietary/partnership
      concerns in India as also in shares/debentures of Indian companies.They
      are also permitted to make portfolio investments i.e. purchase of
      shares/debentures of Indian companies through stock exchange/s in India.
      These facilities are granted both on repatriation and non-repatriation
      basis.
     
Repatriable Investments
                          NRIs can make investments in new issues of shares/convertible debentures of Indian companies under direct investment schemes such as 24% scheme/51% scheme/100% scheme. They can also invest in the schemes of domestic Mutual Funds floated by public/private sector institutions/companies. Non-resident investors are not required to apply for permission to invest. The company concerned will have to file a declaration in Form ISD together with the required documents to Reserve Bank within 30 days from the date of issue. Under the 24% Scheme, Indian companies engaged or proposing to engage in any activity including finance, hire purchase, leasing, trading or other services, establishment of schools/colleges, etc. (except agricultural/plantation activities) are allowed to issue shares/debentures to NRIs with repatriation benefits to the extent of 24% of the new issue. Under the 51% Scheme, NRIs/OCBs are permitted to subscribe to new issues of equity/preference shares and convertible debentures of any new or existing company on repatriation basis provided The issue of equity/preference shares and convertible debentures to NRIs/OCBs with repatriation benefits does not exceed 51 per cent of the face value of each new issue of the company. The shares of the company are not listed on any stock exchange, and The company is engaged in manufacturing activity not being an activity specified in Annexure III to the Statement of Industrial Policy 19991 of Government of India amended from time to time. Investment under this scheme can be made for setting up new manufacturing projects or for expansion/diversification of their existing manufacturing activities. There is no ceiling or restriction on the amount of remittable dividend under the 24% and 51% schemes. Remittance of interest/dividend to NRI investors will be allowed by authorised dealers under the powers delegated to them. Under 100% Scheme, NRIs are permitted to invest in high priority industries listed in Annexure III to the Statement on Industrial Policy dated 24th July 1991 of the Government of India up to 100% of the new issue. Dividend/interest can be remitted freely except in the case of consumer goods industries where the outflow on account of dividend is required to be balanced by export earnings of the company either in the year of declaration of dividend or in the years prior to the declaration of dividend. This requirement is enforced for a period of seven years from the commencement of commercial production. The NRI investor need not apply to Reserve Bank for investment under the 24%, 51% or 100% schemes. Indian companies have been permitted to issue shares/convertible debentures to NRIs/OCBs. Other than these three schemes, NRIs are permitted to undertake revival of sick industrial units by making bulk investment in them to the extent of 100 per cent either by way of purchase of existing equity shares or in the form of subscription to new equity issues. The capital brought into India for revival of the sick unit can be repatriated. Application for necessary permission to undertake revival of sick industrial units should be made by the Indian company to the Central Office of Reserve Bank in Mumbai in form RSU. Under the existing Industrial Policy, investment by foreign collaborators upto 50%/51%/74% of the equity is allowed by Reserve Bank on repatriation basis in certain high priority industries. NRIs can take up the balance 50%/49%/26% equity in such cases on repatriation basis. Investment upto 100% in the new issue of equity shares/convertible debentures of Indian companies engaged in the following areas is allowed -Development of serviced plots and construction of built up residential premises; Real estate covering construction of residential and commercial premises (including business centres and offices; Development of township; City and region level urban infrastructure facilities including roads and bridges; Manufacture of building material; Financing of housing development. Application for the purpose should be made by the concerned Indian company to the Central Office of Reserve Bank in Mumbai [in Form ISD(R)]. Repatriation of original investment will be permitted after a lock-in period of three years from the date of issue of the equity shares/convertible debentures. In addition, OCBs will be permitted to repatriate net profit (upto 16 per cent) arising from the sale of such investment after the lock-in-period of three years. (This facility is, however, not available to individual NRIs.) Annual dividend/interest on equity shares/debentures can, be freely remitted subject to payment of tax, however rate of dividend on preference share shall not exceed 300 basis points over the Prime Lending Rate of State Bank of India prevailing as on the date of the Board meeting of the company in which issue of such shares is recommended. Investments upto 100% equity participation for carrying on Air Taxi operations are permitted in terms of the guidelines issued by the Director General of Civil Aviation for Air Taxi operations. Reserve Bank has granted general permission to Indian companies engaged in Air-Taxi operations to issue shares subject to certain conditions. The concerned company should file a declaration in form ISD(R) within 30 days from date of issue to Reserve Bank.NRIs can invest in non-convertible debentures on repatriation basis. Application for necessary permission should be made to Reserve Bank (Central Office) by the concerned Indian company in form ISD(R).Reserve Bank has granted general permission to domestic mutual funds to issue units/similar instruments to NRIs/OCBs on both repatriation basis and non-repatriation basis. NRIs will be permitted to invest up to 100% in 100% Export Oriented Units subject to obtaining approval from the Government of India, Ministry of Industries (SIA) for setting up the EOU.Reserve Bank has granted general permission to NRIs to acquire shares of PSEs on their bids being successful provided the holding of a single NRI investor does not exceed one per cent of the paid up capital of the PSE concerned, the purchase consideration/bid money is paid by way of remittance from abroad or by debit to his NRE/FCNR accounts.For issue of rights entitlement to NRIs, the concerned company should approach Reserve Bank for issue of rights entitlement to NRIs in the prescribed form if on repatriation basis. However, rights entitlement on non-repatriation basis would be covered by the general permission.For renunciation of rights entitlement, NRIs can make an application to Reserve Bank by a letter detailing therein the folio number of the shares held and the manner in which the rights are being sold.For issue of bonus shares, the concerned Indian company should approach Reserve Bank for issue of bonus shares to NRIs if the original investment is on repatriation basis. Issue of bonus shares in respect of investment on non-repatriation basis is covered by general permission.Authorised dealer have been permitted to grant loans/overdrafts abroad to NRIs through their overseas branches and correspondents against collateral of the shares/debentures of Indian companies held by them, provided the concerned shares/debentures were acquired on repatriation basis. Proceeds of the shares/debentures can be remitted abroad for liquidation of outstandings against such loans/overdrafts subject to payment of Income tax, Capital Gains tax etc. payable, if any. Top 
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      Non Repatriable

            NRI or a Person of Indian Origin resident outside India may invest
            by way of contribution to the capital of a firm or a proprietary
            concern in India, provided that -
              the amount invested is received either by inward remittance
              through normal banking channels or out of an account maintained
              with an authorised dealer/authorised bank by the non-resident
              Indian or the person of Indian origin in accordance with the
              relevant Regulations;

              the firm or the proprietary concern is not engaged in any
              agricultural/plantation activity or real estate business, i.e.
              dealing in land and immovable property with a view to earning
              profit or earning income therefrom;

              the amount invested shall not be eligible for repatriation outside
              India;

              where investment is made out of NRSR account of the non-resident
              investor, the income earned on investment or proceeds of
              investment shall be credited only to the NRSR account of the
              investor.
            NOTE: A firm or a proprietary concern in India may make payment to
            such person by way of profit on such investment.
            Indian companies have been granted general permission to accept
            investments on non-repatriation basis from NRIs, in
            shares/convertible debentures by way of new/rights issue provided
            the investee company is not engaged in agricultural/plantation
            activity or real estate business (excluding real estate development
            i.e. development of property and construction of house) or chit fund
            or is not a Nidhi company.
            There are no formalities required to be completed by NRIs for
            getting the benefit of investment in new issues of Indian companies
            on non-repatriation basis. However, the firms/companies concerned
            are required to file declarations with Reserve Bank in form DIN
            giving particulars of the investments made, within ninety days from
            the date of the investment.
            NRI/OCBs can make investments in domestic public/private sector
            Mutual Funds or Money Market Mutual Funds floated by commercial
            banks and public/private sector financial institutions on
            non-repatriation basis.
            NRIs can make investments in non-convertible debentures of Indian
            companies.
            Purchase and sale of shares/convertible debentures by a Non-resident
            Indian (NRI) or an Overseas Corporate Body (OCB), on
            non-repatriation basis under following conditions -
              Prohibition on purchase of shares/convertible debentures of
              certain companies:
              No purchase of shares or convertible debentures of an Indian
              company shall be made under this Scheme if the company concerned
              is a Chit Fund or a Nidhi company or is engaged in
              agricultural/plantation activities or real estate business or
              construction of farm houses or dealing in Transfer of Development
              Rights.
              Explanation: For the purpose of this paragraph, real estate
              business shall not include development of township, construction
              of residential/ commercial premises, roads, bridges, etc.

              Permission to purchase and/or sell shares/convertible debentures
              of an Indian company:
              Non-resident Indian or an Overseas Corporate Body may, without any
              limit, purchase on non-repatriation basis, shares or convertible
              debentures of an Indian company issued whether by public issue or
              private placement or right issue (Subject to provisions as per 1
              above).

              Method of payment for purchase of shares/convertible debentures:
              The amount of consideration for purchase of shares or convertible
              debentures of an Indian company on non-repatriation basis, shall
              be paid by way of inward remittance through normal banking
              channels from abroad or out of funds held in NRE/FCNR
              /NRO/NRSR/NRNR account maintained with an authorised dealer or as
              the case may be with an authorised bank in India. Provided that in
              the case of an NRI/OCB resident in Nepal and Bhutan, the amount of
              consideration for purchase of shares or convertible debentures of
              an Indian company on non-repatriation basis, shall be paid only by
              way of inward remittance in foreign exchange through normal
              banking channels.

              Sale/Maturity proceeds of shares or convertible debentures:
                The sale/maturity proceeds (net of applicable taxes) of shares
                or convertible debentures purchased under this Scheme shall be
                credited only to NRSR account where the purchase consideration
                was paid out of funds held in NRSR account and to NRO or NRSR
                account at the option of the seller where the purchase
                consideration was paid out of inward remittance or funds held in
                NRE/FCNR/NRO/NRNR account.
                The amount invested in shares or convertible debentures under
                this Scheme and the capital appreciation thereon shall not be
                allowed to be repatriated abroad.
            Reserve Bank has granted general permission to companies in India to
            enter the overseas addresses of the shareholders in their books in
            such cases provided the companies obtain undertakings from the
            holders that they will not seek repatriation of any sale proceeds of
            the security. So if you are a resident, and intend to become a
            non-resident, you needn't worry about the securities you currently
            hold.
            Income/interest accruing during the financial year 1994-95 and
            onwards on bank deposits and investments held by NRIs with
            non-repatriation benefits will be eligible for repatriation as below
            -
              Up to U.S. $ 1,000 or its equivalent in full and one-third of the
              balance income earned during the financial year 1994-95;

              Up to U.S. $ 1,000 or its equivalent in full and two-third of the
              balance income earned during the financial year 1995-96;

              The entire income earned during the financial year 1996-97 and
              onwards.
            The investment/principal amount of deposits made/held on
            non-repatriation basis (will, however, not be allowed to be
            repatriated abroad. Further funds held in NRSR accounts and/or
            interest/income accrued on funds held in these accounts will not be
            be allowed to be repatriated abroad.
            In order to repatriate such income, NRIs should designate a branch
            of an authorised dealer through whom the remittance of income is to
            be made and make an application in form RCI to the designated branch
            giving details of incomes earned during the previous financial year
            along with a Chartered Accountant's Certificate. The designated
            branch will allow the remittance of net amount (i.e. after payment
            of tax) or credit it to NRE/FCNR account of the applicant.

      Insurance
      Who is a non-resident Indian?
      Who are the foreign nationals not permanently resident in India?
      Is insurance allowed on the lives of persons working in foreign airlines?
      What is foreign currency?
      What are the currencies in which policies can be issued?
      Can NRIs take rupee-currency policy of LIC ?
      Can NRIs take foreign-currency policy of LIC ?
      Can a person residing in India hold a foreign currency policy?
      What are the types of schemes offered by LIC to NRIs ?
      What is the maximum insurance cover allowed to NRIs?
      Does LIC offer Overseas Medical Insurance for people visiting abroad ?
      How can an NRI pay the premium under the policy ?
      Is loan permitted to the NRIs on policies held by them?
      What are the modalities for NRIs to take a housing loan from LIC?
      What are the rules governing settlement of claim?
      How can the NRIs receive the claim amount?
      Can the records of a rupee policy be transferred out of India?
      How can a policy-holder get his policy records transferred to India?
      Can a policy-holder take the policy document out of the country?
      Can a policy-holder assign his policy ?
      What is Mail Order Business?
      What are the addresses of foreign offices of LIC ?
      Q.Who is a non-resident Indian?
      A non-resident is a person other than a 'person resident in India.' For
      the purpose of transactions in Indian rupees, Indians, Nepalese and
      Bhutanese are treated as persons resident in India.
      Q. Who are the foreign nationals not permanently resident in India?
      The foreign nationals who are resident in India purely on account of their
      employment, profession or business with a valid employment/ business visa,
      are treated as persons not permanently resident in India. Persons of
      Indian origin holding foreign passports and resident in India, are not
      treated as permanently resident in India unless they have been resident in
      India for employment of a specified duration (irrespective of the length
      of service) or for a specific job or assignment, the duration of which
      does not exceed 3 years. 
      Q.Is insurance allowed on the lives of persons working in foreign
      airlines?
      There is no restriction on that.
      TOP
      Q.What is foreign currency?
      It means any currency other than the currencies of India, Nepal and
      Bhutan.
      Q.What are the currencies in which policies can be issued?
      Policies can be issued to:
      (i) Residents in rupees
      (ii) Non-residents in rupee or foreign currency
      (iii) Returning Indians in foreign currency
      TOP
      Q.Can NRIs take the rupee-currency policy of LIC ?
      Yes.
      Q.Can NRIs take the foreign-currency policy of LIC ?
      In India, LIC markets only the rupee-currency policy. However, clients
      residing in UK, Fiji and Mauritius can take pound sterling-, Fiji dollar-
      and Mauritian rupee-denominated policies, respectively, from LIC's branch
      offices in those countries. Similarly, LIC (International) E.C., Bahrain -
      a subsidiary of LIC - operates among NRIs in Bahrain, Saudi Arabia and
      Kuwait. Clients can take US dollar-, Bahrain dinar- and Saudi
      riyadh-currency policies from them.
     
      Q.Can a person residing in India hold a foreign-currency policy?
      A permanent resident of India cannot hold a foreign currency policy.
      However, a person resident in India but not permanently resident may
      continue to hold any insurance policy issued to him by an insurer outside
      India, if the premium on such policy is paid out of foreign currency
      resources outside India.
     
      Q.What are the different types of schemes offered by LIC to NRIs?
      All individual schemes marketed by LIC in India are available to temporary
      NRIs holding Indian Passports. However, in case of foreign nationals of
      Indian origin, joint-life policies, plans having term insurance element,
      such as Bima Kiran and Bima Sandesh, and health insurance plans such as
      Asha Deep and Jeevan Asha are not allowed.

      Q. What is the maximum insurance cover allowed to NRIs?
      There is no limit. In case of foreign nationals of Indian origin, the
      cover is restricted to Rs 20 lakh for all policies taken together.
     
      Q. Does LIC offer overseas medical insurance for people visiting abroad ?
      No, LIC does not have any scheme of medical insurance for people traveling
      abroad.
      Q. How can an NRI pay the premium under a policy ?
      The manner of payment of premia under a policy are as follows:
      a) For rupee policies on NRIs
      i.By direct remittance from abroad through banking channels in approved
      manner (preferably by Indian rupee drafts drawn in favour of LIC of India)
      or by remittances through postal channels like foreign money order.
      ii. By payment out of funds held in non-resident (external) account or
      foreign currency (non- resident) account with a bank in India.
      iii. By rupees derived by policy-holder by sale of foreign exchange such
      as foreign currency travellers cheques, demand drafts etc, provided
      encashment certificate issued by an authorised dealer in foreign exchange
      is provided.
      iv. By cheques drawn by non-resident policy-holder on bank accounts held
      in India in his own name (either solely or jointly with another member of
      the family) whether or not the account has been designated as
      non-resident.
      v. By cheque drawn on account maintained by resident parent or spouse of
      policy-holder in their own name or joint names with other close relatives.
      vi. By the absolute assignee in India wherever such policies have been
      absolutely assigned to a resident in India.
      vii. By the employers in respect of policies issued to their employees who
      have been deputed abroad by them.
      viii. premia can be paid in cash by a resident parent or spouse of the
      non-resident policy-holder subject to his / her submitting a letter
      stating the relationship with the policy-holder.
      ix. premia due on policies issued to Indian students who have gone abroad
      for higher studies may be collected in rupees out of the resident bank
      account in India or any of their representatives in India by cash or
      cheques.
      Note:
      In respect of premia collected in cash from sources mentioned in iii) to
      ix), it should be noted that the policy moneys cannot be paid abroad in
      foreign exchange but has to be paid in India only.
      b) For policies held on foreign register of LIC
      Premia on foreign-currency / rupee policies issued by overseas branches of
      LIC and held on their foreign register should be collected only in foreign
      currency.
     
      Q. Are loans permitted to NRIs on policies held by them?
      Yes, loans are permitted. The rules governing settlement of claims apply
      on payment of loan as well.
     
      Q.What are the modalities for NRIs to take a housing loan from LIC?
      LIC has a special scheme, Griha Shobha, for housing loan for the NRIs. Its
      details are:
      Loans available for :
      1.Construction of new house/flat
      2.Purchase of an already built (even old)house/flat
      3.Extension to a house/flat Amount of Loan Rs. 25,000 to RS.50,00,000 not
      exceeding 75% of total value of the property
      Maximum term of the loan is 7 to 10 years, which differs on case-to-case
      basis.
      Mode of Repayment:
      Equated Monthly Instalments (EMI) Security
      1.Equitable Mortgage of House/Flat
      2.One Guarantor
      Life Insurance Cover:
      Any existing or new policy issued under any acceptable plan of insurance
      having insurance cover to the extent of loan amount
      RBI Regulations:
      The scheme is applicable to NRIs holding an Indian passport. Remittance of
      premium, repayment of loan, applicant's share of cost, etc., to be paid
      out of NRE/FCNR/NRO account held by the applicant or by direct remittances
      from abroad.
      LIC Housing Finance Ltd., a subsidiary of LIC, looks after this portfolio.
      Interested clients may access their website "http//www.lichfl.com". All
      the requisite information regarding housing loans to NRIs is available
      there.
      Q.What are the rules governing settlement of claims?
      The basic rule is that the payment of claims or surrender value in foreign
      currency will be permitted when
      (i) the claimant is permanently resident outside India and
      (ii) all the premia under the policy have been paid in foreign currency or
      by remittances from abroad through approved channels.
      Where the premia have been paid partly in Indian rupees and partly in
      foreign currency, the payment in foreign currency is in proportion to the
      amount of premia paid by remittance from abroad to the total premia paid.
      Q.How can the NRIs receive the claim amount?
      Payment claim amount can be made freely in India (a) to the policy-holders
      themselves during their temporary visit to India (b) to the
      policy-holders' close relatives in India (c) by crediting the amount to
      policy-holder's resident or non-resident account with an authorised dealer
      in India.
      Q.Can the records of a rupee policy be transferred out of India?
      Records of a rupee life insurance policy cannot be transferred from an
      office in India to an office outside India without prior approval of the
      Reserve Bank. Such transfers are authorised only if transfer of actuarial
      reserves is not involved or the policy-holder is eligible for a capital
      transfer from India.
      Q.How can a policy-holder get his policy records transferred to India?
      LIC can freely transfer policy records of life insurance policies issued
      by their offices abroad in the following cases:
      (a) Transfer from a foreign register of records relating to foreign
      currency as well as rupee policies issued by LIC's overseas offices to
      non-resident Indian nationals and persons of Indian origin on the
      policy-holders returning to India for permanent residence.
      (b) Transfer from a foreign register to Indian register, of records
      relating to foreign currency as well as rupee policies where
        all the premia have been paid in foreign currency abroad and
        actuarial reserves, held abroad, have been repatriated to India.
        Cases not covered by the above two provisions require the permission
        from Reserve Bank before their transfer to India. 
      Q.Can a policy-holder take the policy document out of the country?
      A policy document can not be exported out of the country without the
      permisssion of Reserve Bank of India, as a life insurance policy is
      regarded as security in terms of foreign exchange regulations.
      Q.Can a policy-holder assign his policy ?
      Assignment is permitted if it is without any monetary consideration in
      favour of the policy-holder's non-resident wife or other dependent
      relatives. In other cases, permission from Reserve Bank is necessary.

      What is Mail Order Business?
      A non-resident Indian residing in a foreign country can submit his
      proposal for insurance to any Branch Office in India through mail. Such a
      proposal is called Mail Order Business.
     
      Q. What are LIC's foreign office addresses?
      The addresses of LIC's foreign offices are as stated below.
            U.K. Branch :
            LIC of India York House, 6th floor,
            Empire Way, Wembley,
            Middlesex - HA9OPX.
            U.K.
            Telephone : (0044) 0181 902 5294/5
            Fax : (0044) 0181 902 5281
            E-Mail : liciuk@dircon.co.uk Mauritius Branch :
            LIC of India
            LIC Centre
            President John Kennedy Street
            Port Louis
            Mauritius
            Telephone : 208 1485/211 0572/211 0465
            Fax : (0230) 208 6392
            E-Mail : licmm@bow.intnet.mu
            Fiji Branch :
            LIC of India
            LIC House
            Butt Street
            G.P.O. Box 266
            Suva
            Fiji Island
            Telephone : (0679) 304 148
            Fax : (0679) 312 499
            E-Mail : lici@is.com.fj Bahrain Office :
            LIC (International) E.C. :
            1st floor, Ali Al - Wazzan Bldg.
            Al - Khalifa Avenue
            P.O.Box 584
            Manama,
            Bahrain
            Telephone : (0973) 210 610
            Fax : (0973) 211 577
            E-mail : intcolic@batelco.com.bh

     

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