NRIs are granted the following facilities:

(i) Maintenance of bank accounts in India
(ii) Deposits with Indian firms/ companies.
(iii) Investments in shares/securities
(iv) Investments in Indian partnership firm or a proprietary concern.
(v) Investments in immovable property in India.

NRIs are allowed to open the following types of Bank Accounts:

(A) In Rupees	(B) In Foreign Currency
Non-Resident External Account. (NRE A/c)	Foreign Currency Non Resident Account [FCNR (B) A/c]
Non-Resident Ordinary Account (NRO A/c) (Current, Savings and Term Deposits)	(Only Term Deposits)

Yes, but only for the following purposes:

(a) local payments on behalf of the accountholder, or
(b) investments in share/securities of Indian companies on behalf of the accountholder, or
(c) remittance abroad to the accountholder himself.

POA holders cannot make gifts from NRE accounts and transfer funds to the accounts of another NRE accountholder.

Current income such as pension, interest, dividend etc. of the NRI accountholder credited to NRO account can be freely remitted abroad. Further, Authorised dealers/authorised banks are also permitted to allow remittance up to USD 1 million out of balances held in NRO account, per financial year, for any bona fide purpose subject to certain terms and conditions.

NRIs can make investment in shares/convertible debentures of Indian companies under the following schemes:

a. Foreign Direct Investment Scheme
b. Portfolio Investment Scheme
c. Scheme for investment on non-repatriation basis

Under PIS, NRIs are permitted to purchase shares/convertible debentures of Indian companies through recognised stock exchange in India through a branch designated of the Authorised Dealer. Shares/convertible debentures purchased under the Scheme should be sold on stock exchange only.

Conditions for Investments under PIS for NRIs

• The NRI investor has to take delivery of the shares purchased and give delivery of shares sold. Short Selling (speculation) is not permitted.
• Payment for purchase of shares or debentures on repatriation basis has to be made by way of inward remittance of foreign exchange through normal banking channels or out of funds held in NRE/FCNR account maintained in India. If the shares are purchased on non-repatriation basis, the NRI’s can also utilize their funds in NRO account in addition to the above.
• Shares purchased by NRIs on the stock exchange under PIS cannot be transferred by way of sale under private arrangement or by way of gift to a person resident outside India (except NRI) without prior approval of RBI.

No. NRI should make an application to Reserve Bank through the designated branch of Authorized Dealer to obtain prior approval for transfer, by way of sale under private arrangement or gift to a resident, of the shares/convertible debentures purchased under the Scheme.

• Under the Scheme Indian companies may issue shares and convertible debentures on repatriation basis to NRIs up to the sectoral cap/statutory limits specified through Government route or Automatic route.
• Foreign investment in India (FDI) is governed by FDI policy announced by the Government of India and the provisions of Foreign Exchange Management Act, 1999( FEMA).
• Foreign investment is permitted freely in almost all sectors. Under FDI scheme investments can be made by non residents in shares or convertible debentures of Indian companies under two routes viz. automatic route and approval route.
• FDI in any form is prohibited in companies engaged in certain sectors whereas in certain sectors the same is allowed only to the extent of the sector specific upper cap.
• FDI in trading is permitted on a restrictive basis. Retail trading is prohibited and FDI in only single brand retail trading is allowed to the extent of 51% under FIPB approval route.
• Indian company can issue equity shares, fully convertible debentures or fully convertible preference shares subject to the pricing guidelines and valuation norms prescribed under the FEMA regulations.
• Indian company has to comply with reporting compliances right from receipt of the funds as share application money, issue of shares and annual report of the investment received by the company.
• The transfer of shares is also possible under automatic route subject to terms and conditions and adherence to the pricing guidelines.

Yes, only on non-repatriation basis.

NRIs cannot make investment by way of contribution to the capital of a partnership firm or a proprietary concern engaged in any agricultural/plantation activity or print media sector or real estate business, i.e. dealing in land and immovable property with a view to earning profit or earning income there from.

NRI /PIO is permitted to Purchase residential and commercial property without any permission, however this general permission is not available for Purchase of agricultural Land / plantation property / farm house in India.

• NRI / PIO can inherit immovable Property from a person resident in India or a person resident outside India
• NRI/PIO can freely acquire only Commercial or Residential property by way of Gift either from a person resident in India or an NRI or a PIO.
• There are some restrictions on acquisition and transfer of Immovable Property of which the NRI shall have to take care.

Repatriation of Sale Proceeds of a property in India by NRI / PIO

Mode of Acquisition of a Property	Permissible amount of the remittance
If the NRI has acquired a property after becoming a non-resident and out of remittances from abroad or from debit to the NRE/ FCNR deposits held with the bank i.e. by the use of foreign funds.	The amount that can be repatriated cannot exceed the cost incurred to acquire the property. In the case of residential property, the cost of acquisition of not more than 2 houses can be repatriated.
Sales proceeds of the property acquired out of rupee resources when he was a resident or a non-resident.	The total amount of sales proceeds (net of taxes applicable) can be repatriated to the maximum of 1 million USD per financial year.
Sales proceeds of the property acquired out by inheritance/ legacy.	The total amount of sales proceeds (net of taxes applicable) can be repatriated to the extent of 1 million USD per financial year.

A person resident in India such as an individual, proprietary concern, firm, but excluding a company incorporated in India, may borrow in rupees on non-repatriation basis from a non-resident Indian or a person of Indian origin resident outside India, subject to the following conditions:

• the amount of loan shall be received by way of inward remittance from outside India or out of Non-resident External (NRE)/Non-resident Ordinary (NRO)/Foreign Currency Non-resident (FCNR) account of the lender maintained with an authorised dealer or an authorised bank in India;
• the period of loan shall not exceed 3 years;
• the rate of interest on the loan shall not exceed 2 % points over the Bank rate prevailing on the date of availment of loan;
• the amount borrowed shall not be allowed to be repatriated outside India.

Restrictions on the end use of such borrowed funds

Such borrowed funds can be used only for own business purpose other than in the business of Chitfund or as a Nidhi company or in agricultural or plantation activities or real estate business( barring development of townships, construction of residential / commercial premises, roads or bridges) or trading in TDR.

The funds so borrowed cannot be used
• as capital investment or otherwise in any company or partnership firm or proprietary concern or any entity whether incorporated or not or
• for relending.

Yes, a resident individual can borrow in foreign exchange upto USD 2,50,000 from close relatives subject to following conditions:

• The loan is interest free;
• The minimum maturity period of the loan is one year;
• Mode of receipt of loan should be either by way of inward remittance, or out NRE/FCNR account of non resident lender;

Under the amended rules there is no restriction on the end use of borrowed funds.

No, A Non- resident cannot borrow money without prior approval of RBI, either in foreign currency or in Indian rupees.

Making Gift in Indian Rupees
Gift in Indian Rupees to a Non resident is not allowed. RBI permission is required in such case. Hence permission from RBI would be required.

Making Gift in Foreign Exchange
Gift up to US $ 200000 per annum per remitter/donor is allowed under the liberalized USD scheme and can be made without prior approval of the RBI. Gift exceeding this amount will require prior approval of RBI.

A) RESIDENTS

Sr.No.	Purpose	Permitted Foreign currency
1	Private Travel	$ 10,000 per year.
2	Business Travel	$ 25,000 irrespective of Period of Stay.
3	Study Abroad & Medical Treatment abroad	$ 1,00,000 or upto the estimate from the institution/ hospitals in India abroad, whichever is higher, per academic year.
4	Employment abroad & Emigration	Up to $ 1,00,000 on production of letter of employment or emigration visa respectively
5	Maintenance of relative abroad	Up to $1,00,000 per year

B) NON-RESIDENTS

Sr.No.	Source of remittance	Permitted Remittance
1	Current Income of NRIs/PIOs	Such as dividend, pension, interest etc without any limit provided Indian taxes are paid.
2	Sale proceeds of assets held/ received by NRIs/PIOs out of inheritance/ legacy and remittance out of the balance held in NRO account, per financial year all taken together	$ 10,00,000 per financial year subject to certain conditions.
3	NRIs/PIOs out of sale proceeds of immovable property acquired in foreign exchange.	To the extent of original amount remitted in India while purchasing property subject to certain conditions.
4	Other investments held by NRI/PIO on repatriation basis	Fully repatriable

Yes. A person resident in India may hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India.

This account is a special facility given to Returning Non Resident Indians, who can maintain the flexibility of their foreign sourced funds unaffected even after change of their residential status from Non Resident to Resident in India. The said funds enjoy total flexibility of being remitted outside India for any investment or expenditure without any restrictions.

They may open, hold and maintain with an authorized dealer in India a Foreign Currency Account, to be known as a Resident Foreign Currency (RFC) Account, out of foreign exchange –

• received as pension or any other superannuation or other monetary benefits from his employer outside India; or
• realized any amount on the sale of any foreign security or immovable property held by him when he was a resident outside India or was inherited by him from a person resident outside India.
• received or acquired as gift or inheritance from a person resident outside India.
• received as the proceeds of life insurance policy claims/maturity/ surrender values settled in foreign currency from an insurance company in India permitted to undertake life insurance business by the Insurance Regulatory and Development Authority.

The funds held in RFC A/c opened in compliance with the regulations of the Act shall be free from all restrictions regarding utilization of foreign currency balances including any restriction on investment in any form, by whatever name called, outside India.

This scheme is available only for Resident Individuals in India

• Under this Scheme, Resident individuals in India including minors can remit USD 200,000 per financial year (April-March) for any permitted current or capital account transactions or a combination of both.
• Individuals can also open, maintain and hold foreign currency accounts with a bank outside India for making remittances under the Scheme without prior approval of the Reserve Bank. The foreign currency accounts may be used for putting through all transactions connected with or arising from remittances eligible under this Scheme.
• Resident individuals are free to acquire and hold immovable property or shares (of listed companies or otherwise) or debt instruments or any other asset outside India without prior approval of the Reserve Bank.
• The limit of USD 200,000 under the Scheme also includes remittances towards gift and donation by a resident individual.
• A resident individual can invest in units of Mutual Funds, Venture Funds, unrated debt securities, promissory notes, etc., under this Scheme. Further, the resident can invest in such securities out of the bank account opened abroad under the Scheme
• There are certain restrictions as regards the countries to which the remittances can be made.