We at Mangal Keshav make sure that you get the best service and offer the most comprehensive tools to make investing in India uncomplicated. UNIQUE FEATURES OF MANGAL KESHAV Mangal Keshav has an experience of around 70 years that enable us to provide excellent service to our Clients Dedicated relationship team Personalized service for NRI clients 24 X 7 web enabled back office Multiple user-friendly trading platforms Instant online technical support for clients Offering a bouquet of financial products

ONLINE TRADING You can transact online through MangalTrader. This facility links Banking, Demat and Trading account, thus providing you a seamless platform to trade efficiently and conveniently. To Make Equity Trading Simple & Easy, Following Services are taken care by Mangal Keshav. BSE, NSE, Trading BackOffice in a single screen. Real-time streaming quotes. Charts with technical tools and indicators. Instant online transfer of funds from multiple banks. DP with both NSDL & CDSL with automated pay-in facility. 24 X 7 web enabled back office. Why MangalTrader? Multiple user-friendly trading platforms. Personalize service. Efficient uptime and greater stability for uninterrupted high speed trading. State of the art technology & infrastructure. Instant online technical support. Most competitive brokerage structure. Integrity, honesty and transparency in all dealings. One stop destination for all investment needs.

DEPOSITORY Mangal Keshav has participation of both the Depositories, National Securities Depository Limited (NSDL) Central Depository Services (India) Limited (CDSL).

DERIVATIVES NRI is permitted to invest in exchange traded derivatives contracts subject to approvals and the limits described by SEBI from time to time.

INSURANCE Insurance is a protection against financial loss arising on the happening of an unexpected event. Insurance companies collect premiums to provide for this protection. Mangal Keshav provides Insurance coverage for both Life and Non-Life to NRIs.

MUTUAL FUND A mutual fund is a pool of money contributed by individuals who have similar financial goals. The money collected is then invested in various securities such as equities, debentures / bonds and / or money market instruments. Mangal Keshav offers options catering to investors with varying risk-return profiles. We also help investors to choose the best mutual fund, based on their investment needs.

IPOs An Initial Public Offering, or IPO, is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO.

VALUE ADDED SERVICES Opens PIS A/c with leading Banks approved by RBI Provide Assistance in PAN card making

Investment Options in India in Brief	RBI Guideline For NRI
Avenues of Investment Instruments Category of Investors Public/Pvt. Limited Cos. Shares/Convertible Debentures/Preference Shares Non-Resident Indians/Non Resident/ FII Public Limited Cos. NCDs NRIs SSI Units Shares Convertible Debentures/Preference Shares Non-residents Public/Pvt. Limited Cos Right Shares Non-residents Under Scheme of Amalgamation/Merger Shares Convertible Debentures/Preference Shares Non-residents Employee Stock Option Shares Convertible Debentures/Preference Shares Non-residents ADR/GDR Receipts Non-residents PIS Shares Convertible Debentures FIIs & NRIs Exchange Traded Derivatives   FIIs (on Repatriation basis) & NRIs (on Non-Repatriation basis) Govt. Securities   FIIs & NRIs
Who can invest Individual Non-Resident of Indian Origin/Nationality. Non-Resident Investors can also authorize Indian Residents or Stock Exchange Brokers as their Agents in India to purchase/sell shares/securities on their behalf under the PIS Scheme, but, all transactions should be routed through the designated Branch of Authorized Dealers. Salient Features PIS is a RBI regulated scheme which permits NRI to invest in the Indian Capital Market on repatriation basis, through recognized Stock Exchanges, SEBI Registered Brokers, and Designated Banker An NRI will have to take delivery and give delivery of shares. They are not permitted to intra-day trading in these securities. An NRI can authorize only one Branch, of only one Bank, in India for Portfolio Investment Scheme (PIS) Procedure Open PIS (NRI/NRO) S.B. A/c Open (NRI/NRO) S.B. A/c Open (NRI/NRO) Demat A/c Documents Required Client Registration Forms and Account Opening Forms for Brokers and designated Bankers respectively* RPI – Application from NRI for permission to purchase shares with repatriation benefits* 4 Passport Size Photographs Attested copy of Passport/Visa/Work Permit Draft Power of Attorney (To be duly Stamped and Notarized)* PIS Tariff Form* Form TS4, Statement of past holdings and NOC from the other Bank for transfers of PIS Portfolio (if applicable)* Operation Bank will receive Purchase Contract from Mangal Keshav within 24 hours. Bank will debit PIS A/c and credit Mangal Keshav A/c. Mangal Keshav delivers shares to the Demat Account maintained with the Bank Bank will receive Sale Contract from Mangal Keshav within 24 hours. On receipt of the cheque from Mangal Keshav, the Bank will compute the Capital Gain, if any, on FIFO basis and will credit PIS A/c. after debiting Capital Gains Tax and Bank Charges/Service Tax. The proceeds at the NRI Investor’s option can be remitted abroad or credited to his NRE/FCNR A/c      *Formats sent by us Various Schemes for NRI Investment in India Foreign Direct investment Purchase/Sale of shares/Debentures of an Indian Co. by a Registered FII under Portfolio Investment Scheme Purchase/Sale of shares/Debentures of an Indian Co. by an NRI on a Stock Exchange in India on repatriation and/or non-repatriation basis under Portfolio Investment Scheme. Purchase/Sale of shares/Convertible Debentures of an Indian Co. by an NRI in India on non-repatriation basis. Purchase/Sale of securities other than shares/Debentures of an Indian Co. by a Person resident outside India.

Mumbai Office :

Cont. Person Jigar Shah Office Address 501, Heritage Plaza, J.P.Road, Opp. Indian Oil Colony, Andheri (w), Mumbai – 53. City  Mumbai Country India Tel. No. 022 – 3068 7944       Email jigarshah@mangalkeshav.com

Muscat Office :

Cont. Person Mr Rajeev Padmanabhan Office Address P.O. Box 134, Ruwi, P.C. 112, Muscat City Muscat Country  Oman Tel. No. 00968-24767153 / 24768888 Email rajeevp@bankmuscat.com

There are many questions, which an NRI has when he wants to invest in India. We have tried to compile a series of questions in to three sections, which we felt are important for any NRI to invest in India they are related to GENERAL FACILITIES, BANKING, TAXATION and INVESTMENTS. If you have any further query feel free to send us the same and we would try our best to reply. Though we try our best to keep our site current, We would like to add a note of caution – that use this only as a guide and before you take any decision, kindly take proper counsel. 1. Who is Non-Resident Indian (NRI)? 2. Who is a person of Indian Origin? 3. What steps an NRI needs to take to start investing in the Indian Stock Market? 4. Who is a PIO? 5. Does an NRI need any RBI permission to open a demat account? 6. Can I appoint a nominee to my account? 7. Can I appoint a minor as a nominee? 8. What is the procedure for transferring the securities in the name of the nominee? 9. What is Portfolio Investment Scheme (PIS)? 10. What is the procedure for making investments under this scheme? 11. What are the transactions covered under PIS? 12. Under PIS, how many types of accounts are normally maintained? 13. Are there any charges for PIS, demat, broking etc.? 14. What is an OCB? 15. Are OCBs required to produce any certificate regarding ownership / beneficial interest in them by NRIs? 16. What is an IPO? 17. Do NRIs need any permission of RBI to subscribe for IPO’s or Private Placements of equity shares / convertible debentures of existing or new companies? 18. Do NRIs need approvals from RBI for selling securities acquired through IPOs / Private Placement? 19. Does an NRI require RBI permission for dematerialization / dematerialization of securities? 20. Can NRIs make Investments in Derivative Instruments? 21. Can Power of Attorney holder manage portfolio on behalf of NRIs? 22. Can NRIs invest in shares, debentures and units of mutual funds in India? 23. Are persons resident in India required to surrender foreign exchange acquired / held by them? 24. Does this rule apply to other assets viz. foreign currency shares / securities or immovable property held abroad? 25. Are Returning Indians permitted to acquire fresh foreign currency assets by remittance from India? 26. Are any concessions available to Returning Indians in respect of assets acquired by them while they were resident outside India? 27. Is such an exemption available to any other categories? 28. Do resident donees or legal heirs require the Reserve Bank permission to receive or hold foreign currency assets by way of gift or inheritance from Returning Indians or from those holding assets since prior to July 8, 1947 with the permission of the Reserve Bank? 29. Can such overseas assets covered by the general permission / exemption be utilised freely? 30. What is the procedure for obtaining such permission? 31. What is the Resident Foreign Currency Account Scheme? 32. What funds can be credited to RFC accounts of Returning Indians? 33. Can funds in RFC accounts be remitted abroad? 34. Can persons who have returned to India after a short assignment of less than one year open RFC accounts? 35. Can Returning Indians continue to maintain their existing NRE / FCNR / NRO accounts in India? 36. Are any tax concessions available to NRIs on balances/deposits held in NRE/FCNR accounts? 37. What are the tax benefits to the NRNR deposit account holders? 38. What about tax benefits on funds held in FCNR accounts? 39. What are the tax obligations applicable to NRIs? 40. What is TDS? 41. How is TDS computed? 42. Can remittances be sent into India otherwise than through the medium of a bank in the country of residence of the remitter? 43. Can NRIs take out of India precious stones or jewellery purchased by them during their visit to India? 44. Can NRIs take out of India household articles purchased out of funds in NRO accounts during their temporary visit to India? 45. Can assets held in India by NRIs prior to their becoming non-resident be repatriated outside India? 46. What are the different types of accounts that a NRI can open in India? 47. What are the other salient features of NRE, FCNR, NRNR, and RFC accounts? 48. Can NRO / NRE accounts be maintained by NRIs jointly with a resident Indian? 49. Can the principal or the interest accrued on NRNR deposits be repatriated outside India at any time? 50. What are the restrictions for NRIs while purchasing shares and Debentures quoted on the Stock Exchanges in India? 51. Can NRIs invest their funds in Government securities or Units of Unit Trust of India (UTI)? 52. Can NRIs make investments in National Savings Certificates issued by Post Offices in India? 53. Can Government securities/units be freely transferred or sold? 54. Are sale/maturity proceeds of Government securities / Units / National Savings Certificates allowed to be repatriated abroad? 55. Is permission of Reserve Bank required for making investments in new issues of Indian companies on non-repatriation basis? 56. Can NRIs make investments in non-convertible debentures of Indian companies? 57. Can NRIs purchase existing shares/debentures of Indian companies by private arrangement? 58. Is income/interest earned on investments/deposits held in India by NRIs on non-repatriation basis allowed to be repatriated? 59. What is the procedure to be followed for seeking repatriation in such cases? 60. Can NRIs obtain loans abroad against the collateral of shares / debentures of Indian companies? 61. What is the validity period of Reserve Bank approval for the purchase of shares/debentures of Indian companies or units of domestic Mutual Funds? 62. Is there any ceiling on the investment under the Portfolio Investment Scheme? 63. Can NRIs keep deposits with companies in India with repatriation benefits? 64. Do NRIs need permission of Reserve Bank for placing funds in fixed deposits with firms/companies on non-repatriation basis? 65. Are NRIs permitted to invest in Commercial Paper (CP) issued by Indian companies? 66. Is permission of Reserve Bank required for sale/transfer of Government securities/units? 67. Is permission of Reserve Bank required by NRIs for sale/transfer of shares/debentures of Indian companies to other NRIs? 68. Can NRIs transfer / sell their shares / debentures / bonds held on non –repatriation basis to residents freely? 69. What is the procedure for sale/transfer of shares/debentures/bonds held by NRIs with repatriation benefits? 70. What is the procedure to be followed by NRIs for sale/transfer of shares /debentures to residents by private arrangements? 71. Can shares/debentures be given away as gifts to relatives?

1. Who is Non-Resident Indian (NRI)? An Indian Citizen who stays abroad for employment / carrying on business or vocation outside India or stays abroad under circumstances indicating an intention for an uncertain duration of stay abroad is a non-resident. (Persons Posted in U.N. organizations and official deputed abroad by Central / State Governments and Public Sector undertakings on non-temporary assignments are also treated as non-residents). Non-resident foreign citizens of Indian Origin are treated on par with Non – Resident Indian citizen (NRIs). Indians going abroad for study, seminars, lectures, or research are not NRIs. No student can be an NRI until he / she finishes his / her studies and starts working abroad. 2. Who is a person of Indian Origin? For the purposes of Availing of the facilities of opening and maintenance of bank accounts and investments in shares/securities in India: A foreign citizen (other than a citizen of Pakistan or Bangladesh) is deemed to be of Indian origin, if, he/she, at any time, held an Indian passport, or he/she or either of his/her parents or any of his/her grand parents was a citizen of India by virtue of the Constitution of India or citizenship Act, 1955 (57 of 1955). Note: A spouse (non being a citizen of Pakistan or Bangladesh) of an Indian citizen or of a person of Indian origin is also treated as a person of Indian origin for the above purposes provided the bank accounts are opened or investments in shares/securities in India are made by such persons only jointly with their NRI spouses. For investments in immovable properties: A foreign citizen (other than a citizen of Pakistan, Bangladesh, Afghanistan, Bhutan, Sri Lanka or Napal), is deemed to be of Indian origin if he held an Indian passport at any time or he or his father or paternal grand-father was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955). 3. What steps an NRI needs to take to start investing in the Indian Stock Market? An NRI should open a new bank account with designated bank branch, which is approved by RBI (Reserve Bank of India) for this purpose. He should apply for a general approval for investment in Indian Stock Market through his designated bank branch. He should open a Demat Account with a Depository Participant to hold his shares. He needs to register with a broker to execute his buy/sell orders on the stock exchange(s). 4. Who is a PIO? A citizen of a foreign country (other than a citizen of Bangladesh or Pakistan) is a PIO if: He/She at any time held an Indian Passport OR He/She or either of his parents or any of his/her grandparents was a citizen of India OR Spouse (not being a citizen of Bangladesh or Pakistan) of an Indian citizen above. 5. Does an NRI need any RBI permission to open a demat account? No permission is required from RBI to open a demat account. However, credits and debits from demat account may require general or specific permissions as the case may be, from designated authorized dealers. 6. Can I appoint a nominee to my account? You can make a nomination of your account in favour of any person by filing up the nomination details in the account opening form. This is to enable the nominee to receive the securities after the death of all the holder(s) of the demat account. 7. Can I appoint a minor as a nominee? Where a minor is appointed as a nominee, the name and address of the guardian is required to be obtained. 8. What is the procedure for transferring the securities in the name of the nominee? In case of the death of the sole holder or all the joint holders, the nominee must submit a duly filled-in transmission form and give the notarised copy of death certificate and an affidavit in the prescribed format. After verifying these documents, the securities will be transferred to the account of the nominee. 9. What is Portfolio Investment Scheme (PIS)? Portfolio Investment Scheme (PIS) is a scheme of the Reserve Bank of India (RBI) defined in Schedule 3 of Foreign Exchange Management Act 2000 under which the Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) can purchase and sell shares / convertible debentures of Indian Companies through an authorized broker on a recognized stock exchange in India, by routing all such purchase / sale transactions through a dedicated account held with a branch of a Designated Bank. 10. What is the procedure for making investments under this scheme? An NRI should open a PIS account with a designated bank branch, which is approved by the Reserve Bank of India, for this purpose. It is also advisable to maintain a NRE / NRO bank account with the same designated branch for administrative convenience. He should apply for RBI approval through his designated bank branch, for investment in Indian Stock Markets, by completing the prescribed forms. Reserve Bank issues general permission for a period of 5 years that can be renewed further. He should open Demat Account/s with a Depository Participant to hold his shares. Separate Demat accounts have to be opened for maintaining repatriable and non-repatriable investments. 11. What are the transactions covered under PIS? For transactions to be covered under PIS, they need to satisfy two conditions: Purchase from Indian Equity Secondary Market Purchase as an NRI Thus, following transactions are allowed under PIS: Fresh purchase from the secondary market as an NRI Sale of shares, which were bought under PIS The following transactions are not allowed or are not covered under PIS: Sale of shares, which were not bought under PIS like: Gifts, subscription to IPOs or shares bought as resident Indian. Fresh subscription for the IPOs as an NRI Investment in Mutual Funds. 12. Under PIS, how many types of accounts are normally maintained? While different banks / depository participants may designate the following accounts by different names, broadly the following are maintained in under PIS: Normal NRE bank account: A NRE bank account is an external saving bank account opened for Non Resident Indians. This is why it is known as Non Resident External account. Since it is an external account, any money lying in NRE account can be taken outside the country or in other words, the money lying in NRE account are fully repatriable. This money can be converted into any foreign currency at the behest of the account holder and can be remitted outside the country. NRE PIS account:This account can be utilized only for making secondary market investments in Indian stock markets on repatriation basis and for depositing the sale proceeds of shares purchased from this account. No other expenses can be paid from this account. All investments made in this account are subject to investment limits as specified by RBI. Normal NRO Account: A NRO bank account is an ordinary saving bank account opened for Non Resident Indians. This is why it is known as Non Resident Ordinary account. Since it is an ordinary account i.e. as good as a normal saving bank account, money lying in NRO account cannot be taken outside the country or in other words, the money lying in NRO account are not repatriable. NRO PIS account: This account can be utilized only for making secondary market investments on non-repatriation basis and for depositing the sale proceeds of shares acquired from this account. No other receipts / expenses can be credited / paid to / from this account. All investments made in this account are subject to investment limits as specified by RBI. NRE Demat account: Securities bought out of funds remitted from abroad (NRE PIS) will be credited to this account. When securities bought out of NRE PIS are sold, the shares are debited to this demat account. NRO Demat account: Securities bought out of funds originating in India and will be credited to this account. When shares bought out of NRO PIS are sold, the shares under this demat account will be debited. Thus under the PIS, outflow of funds from the PIS account for all investments will eventually be reflected as credit of shares / debentures in Demat account. In order to demarcate investments (in terms of repatriable or non - repatriable in nature), a linkage is normally maintained by designated bank (between the outflow and inflow of funds). 13. Are there any charges for PIS, demat, broking etc.? Yes, there are charges associated with the PIS account like Annual Maintenance Charge, Transaction Charge etc. Similarly the depository participant and authorized broker will also charge for the trades as per their fees schedule. Please contact a designated bank, DP and the broker for the Schedule of charges. The charges vary from bank to bank, DP to DP and broker to broker. 14. What is an OCB? Overseas Corporate Bodies (OCBs) are bodies predominantly owned by individuals of Indian nationality or origin resident outside India and include-overseas companies, partnership firms, societies and other corporate bodies which are owned, directly or indirectly, to the extent of atleast 60% by individuals of Indian nationality or origin resident outside India as also overseas trusts in which atleast 60% of the beneficial interest is irrevocable held by such persons. Such ownership interest should be actually held by them and not in the capacity as nominees. The various facilities granted to NRIs are also available with certain exceptions to OCBs so long as the ownership/beneficial interest held in them by NRIs continues to be atleast 60%. 15. Are OCBs required to produce any certificate regarding ownership / beneficial interest in them by NRIs? Yes, In order to establish that the ownership / beneficial interest in any OCB held by NRIs is not less than 60%, the concerned body / trust is required to furnish a certificate from an overseas auditor / chartered accountant / certified public accountant in form OAC where the ownership / beneficial interest is directly held by NRIs and in form OAC 1 where it is held indirectly by NRIs and further that such ownership interest is actually held by them and not in the capacity as nominees. 16. What is an IPO? An Initial Public Offering, or IPO, is the first sale of stock by a company to the public. A company can raise money by issuing either debt or equity. If the company has never issued equity to the public, it's known as an IPO. 17. Do NRIs need any permission of RBI to subscribe for IPO’s or Private Placements of equity shares / convertible debentures of existing or new companies? No, NRIs do not require any permission to invest though Initial Public Offerings (IPO’s) or Private Placements. In such cases, the Issuing Company should comply with all necessary regulations for issuing securities to a person resident outside India. 18. Do NRIs need approvals from RBI for selling securities acquired through IPOs / Private Placement? No, NRIs can sell such shares / debentures on the Exchange without any approval. However, while seeking the credit of sale proceeds to NRE / NRO account, the bank should be provided with the details regarding date of allotment and cost of acquisition to calculate the taxes, if any. 19. Does an NRI require RBI permission for dematerialization / dematerialization of securities? No special permission is required. Holding securities in demat only constitutes change in form and does not need any special permission. However, only those physical securities which already have the status as NR - Repatriable / NR - Non-Repatriable can be dematerialised in the corresponding Depository Accounts. 20. Can NRIs make Investments in Derivative Instruments? NRI is permitted to invest in exchange traded derivatives contracts approved by SEBI from time to time out of his Rupee funds held in India on Non -Repatriable basis subject to the limits described by SEBI. 21. Can Power of Attorney holder manage portfolio on behalf of NRIs? Yes, A Power of Attorney holder can manage portfolio on behalf of NRIs. However, he cannot affect remittance outside India. 22. Can NRIs invest in shares, debentures and units of mutual funds in India? NRIs are permitted to make direct investments in shares / debentures of Indian companies / units of mutual fund. They are also permitted to make portfolio investments i.e. purchase of share / debentures of Indian Companies through stock exchange. These facilities are granted both on repatriation and non - repatriation basis. 23. Are persons resident in India required to surrender foreign exchange acquired / held by them? Yes, Residents receiving foreign exchange from abroad by way of gift, inheritance, remuneration for services rendered, etc. are required to bring it to India within three months acquiring the foreign exchange and surrender it to an authorized dealer within seven days from its receipt in India. This rule also applies to non-residents who return to India for a purpose other than temporary visits. 24. Does this rule apply to other assets viz. foreign currency shares / securities or immovable property held abroad? Residents are required to declare such assets to the Reserve Bank within three months from acquiring them and obtain permission of the Reserve Bank for holding them. 25. Are Returning Indians permitted to acquire fresh foreign currency assets by remittance from India? Yes, provided the funds for the purpose are drawn out of their Resident Foreign Currency Accounts. 26. Are any concessions available to Returning Indians in respect of assets acquired by them while they were resident outside India? Yes, Persons who have returned to India on or after April 18, 1992 and have stayed abroad for a continuous period of not less than one year have been granted general permission/exemption from the requirement of surrendering / declaring their foreign currency assets abroad. As a result they can continue to maintain their foreign currency accounts and other assets, viz., foreign currency shares/securities or immovable properties abroad. Under the general permission/exemption, Returning Indians can retain their foreign currency accounts with banks abroad and hold, transfer or dispose of their foreign currency assets. This can be done provided these funds/assets were lawfully acquired by them out of foreign exchange earned through employment, business or vocation outside India taken up or commenced while they were resident outside India and not in contravention of the provisions of the Foreign Exchange Regulation Act (FERA), 1973. 27. Is such an exemption available to any other categories? Yes, Residents who had acquired foreign currency assets abroad before July 8, 1947 can continue to hold them abroad, provided they were held outside India with the general or special permission of the Reserve Bank as on 6th July 1994. This general permission/exemption has also been granted by the Government of India vide their Notification dated July 6, 1994. 28. Do resident donees or legal heirs require the Reserve Bank permission to receive or hold foreign currency assets by way of gift or inheritance from Returning Indians or from those holding assets since prior to July 8, 1947 with the permission of the Reserve Bank? No, Resident donees or legal heirs of the persons covered under the general permission/exemption granted by the Government of India can continue to maintain their foreign currency assets provided in the case of gift the resident donee is a relative, i.e., husband, wife, brother, sister or any lineal ascendant or descendant of the donor and the tax, if any, has been paid in India. Resident donees not eligible for the exemption should surrender the foreign exchange to an authorized dealer against payment in rupees. 29. Can such overseas assets covered by the general permission / exemption be utilised freely? Yes, The resident donees or legal heirs can freely utilise overseas assets covered by the general permission/exemption assets as well as income earned thereon or sale proceeds received subsequently, for bonafide payments in foreign currency. 30. What is the procedure for obtaining such permission? Applications for the purpose should be made in form FAD 1 to the Reserve Bank of India. The forms are available with the Exchange Control Department (Foreign Accounts Section), Amar Building, Bombay - 400 001. Returning Indians are also offered the facility of keeping their foreign currency funds with a bank in India. This facility is known as the Resident Foreign Currency (RFC) Account Scheme. 31. What is the Resident Foreign Currency Account Scheme? This is a Scheme drawn up by the Reserve Bank permitting Returning Indians to open foreign currency accounts with banks in India for holding funds brought by them to India. This facility replaces the earlier (RIFEE) facility. 32. What funds can be credited to RFC accounts of Returning Indians? The Returning Indians can credit to RFC accounts, the entire amount of foreign exchange brought to India at the time of their return to India for permanent settlement as well as the balances standing to the credit of their Not Resident (External) (NRE) and Foreign Currency Non-Resident (FCNR) accounts. 33. Can funds in RFC accounts be remitted abroad? Yes, Funds in RFC accounts can be remitted abroad for any bona-fide purpose of the account holder or his dependents as well as withdrawn freely for local payments in rupees. 34. Can persons who have returned to India after a short assignment of less than one year open RFC accounts? Their applications for opening RFC accounts would be considered by the Reserve Bank. Persons who have gone abroad for studies, training, etc., are, however, not eligible for this facility. 35. Can Returning Indians continue to maintain their existing NRE / FCNR / NRO accounts in India? No, Returning Indians are required to redesignate immediately on their return to India their NRE/FCNR accounts as resident rupee accounts or transfer the balances held in their NRE/FCNR accounts to Resident Foreign Currency (RFC) Accounts (if eligible). The Non Resident (Ordinary) (NRO) accounts also have to be redesignated as resident rupee accounts. The funds held in NRO accounts cannot be credited to RFC accounts. 36. Are any tax concessions available to NRIs on balances/deposits held in NRE/FCNR accounts? Yes, Income from interest on moneys standing to the credit of NRE/FCNR accounts is exempt from income tax. Gifts from such accounts are also free of Gift-tax. 37. What are the tax benefits to the NRNR deposit account holders? They enjoy the following tax benefits: Income from the deposits will be free from Indian Income Tax. The deposit will also be exempt from Gift Tax for one-time gifting (in the case of NRIs only). Exemption from Income Tax will not be available to resident donee and those residents, who being joint holders, become owners of the deposit as survivor of the non-resident depositor. 38. What about tax benefits on funds held in FCNR accounts? Tax Exemption on interest earned on deposit held in foreign currency is available to non-residents and persons who are not ordinarily resident in India as defined under Income Tax Act, 1961. 39. What are the tax obligations applicable to NRIs? Income on investments (capital gains) forming part of sales proceeds is subject to Capital Gains tax. Long -Term capital gain (arising out of sale of shares / debentures held for more than 12 months from the date of its acquisition) is not applicable to tax. Short-Term capital gain (arising out of sale of shares / debentures held for a period of less than 12 months from the date of its acquisition) will be levied tax at the rate of 10%. 40. What is TDS? As per regulatory guidelines, Tax (if applicable) has to be deducted at source for all the profits done in the equity market transactions. Before crediting sales proceeds it is the responsibility of the broker and the PIS cell to determine the appropriate Tax and deduct it at source. 41. How is TDS computed? TDS is computed on the profit amount or the gain as per the applicable rate i.e. short term or long term on a First – In – First – Out (FIFO) basis. 42. Can remittances be sent into India otherwise than through the medium of a bank in the country of residence of the remitter? Yes, Exchange Houses in the Gulf countries have been permitted to send remittances into India by means of DDs, MTs and TTs drawn on banks in India. 43. Can NRIs take out of India precious stones or jewellery purchased by them during their visit to India?Yes, NRIs can take out of India precious stones and jewellery (both gold and non-gold) purchased by them in India, without any limit, provided the purchase is made against payment in any convertible foreign currency. Yes, NRIs can take out of India precious stones and jewellery (both gold and non-gold) purchased by them in India, without any limit, provided the purchase is made against payment in any convertible foreign currency. 44. Can NRIs take out of India household articles purchased out of funds in NRO accounts during their temporary visit to India? Yes. RBI permits on application such requests received from NRIs upto the value of Rs.20,000 for articles other than those made of gold or silver or those banned for exports. 45. Can assets held in India by NRIs prior to their becoming non-resident be repatriated outside India? No 46. What are the different types of accounts that a NRI can open in India? NRIs / OCBs are permitted to maintain accounts with authorized banks in India, wherein they can remit the funds from abroad. The following types of accounts can be opened by NRIs: NRE (Non Resident External) - this account can be in the form of current / savings / fixed deposits and can be opened only by remittance from abroad or deposit of foreign currency, or by transfer of funds from existing NRE/FCNR accounts. The account is maintained in Indian Rupees. Funds standing in this account are FULLY REPATRIABLE. FCNR (Foreign Currency deposit account - Not in Rupees) - This account is in the form of fixed deposit and is designated in specified currencies, which is pound sterling, US dollar, DM, and Japanese yen thereby insulating the deposits from depreciation in the value of Indian Rupee. The interest rates on these deposits are normally substantially lower than the Rupee accounts. Funds standing in this account are FULLY REPATRIABLE. NRNR (Non Resident Rupee Deposits) - This account is in the form of Indian Rupee fixed deposit. Funds for the purpose of deposit can be remitted from abroad / transferred from existing NRE / FCNR accounts. Premature withdrawal from NRE / FCNR freely allowed for investment in NRNR deposit. Period of deposits from six months to three years. Interest earned is repatriable, but the principal is NON-REPATRIABLE. RFC (Resident Foreign Currency deposit account) - This account can be opened by NRI who has returned to India after his foreign stay of minimum one year and subsequently ceases to be NRI. Deposits in this account are made by foreign remittances as well as transfer from NRE / FCNR account. This account is maintained in any convertible currency and funds are FULLY REPATRIABLE. 47. What are the other salient features of NRE, FCNR, NRNR, and RFC accounts? Interest on all above deposits is exempt from Indian income tax. The total balance i.e. principal plus interest is exempt from wealth tax. Gifts made out of the accounts to close relatives of the account holder in India are exempt from gift tax. Loans and advances can be granted against the security of term deposits, subject to certain conditions. Investments can be made by non-residents in permissible securities / shares / debentures etc. subject to certain conditions. NRO - This account can be in the form of current / savings / fixed deposits. An existing account of an individual is converted into a NRO account on his/her attaining NRI status. Deposits in this account can be made by way of remittance from abroad or local deposits. Account is maintained in Indian Rupees. Funds standing in this account are NON– REPATRIABLE. 48. Can NRO / NRE accounts be maintained by NRIs jointly with a resident Indian? NRO account can be held jointly with resident Indians. NRE account cannot be held jointly with resident Indian, however a power of attorney to operate the account can be given by NRI in favor of a resident Indian. 49. Can the principal or the interest accrued on NRNR deposits be repatriated outside India at any time? The principal amount of the deposit is not eligible for repatriation. Interest earned upto 30th September 1994 is also not eligible for repatriation. Interest earned for the period beginning 1st October 1994 is, however, eligible for repatriation. 50. What are the restrictions for NRIs while purchasing shares and Debentures quoted on the Stock Exchanges in India? NRIs can make portfolio investments in shares and Debentures quoted on the Stock Exchanges in India with full benefits of repatriation of capital and income thereon subject to the following conditions. Portfolio investments in shares / debentures by NRIs / OCBs are permitted only through designated branches of authorised dealers preferably located at centers having stock exchanges. Authorised dealers should inform the names of such branches to Central Office of Reserve Bank and obtain approval. The Code number allotted by Reserve Bank should be quoted in all correspondence undertaken with Reserve Bank in this regard. Non-resident investors can also authorise Indian residents or stock exchange brokers as their agents in India to purchase/sell shares on their behalf under the schemes but all transactions should be routed through the designated branch of authorised dealer. The payment is received through an inward remittance in foreign exchange or by debit to the investor's NRE/FCNR account. Investment made by any single NRI/OCB investor in equity/preference shares and convertible debentures of any listed Indian company does not exceed 5% of its total paid-up equity or preference capital or 5% of the total paid-up value of each series of convertible debentures issued by it. NRIs/OCBs take delivery of the shares/convertible debentures purchased and give delivery of the shares/convertible debentures sold under the Scheme. 51. Can NRIs invest their funds in Government securities or Units of Unit Trust of India (UTI)? Yes, 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. 52. Can NRIs make investments in National Savings Certificates issued by Post Offices in India? Yes, 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. 53. Can Government securities/units be freely transferred or sold? Yes, provided the transfers/sales are arranged through an authorised dealer. Units can, however, be repurchased directly by UTI. 54. Are sale/maturity proceeds of Government securities / Units / National Savings Certificates allowed to be repatriated abroad? 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. 55. Is permission of Reserve Bank required for making investments in new issues of Indian companies on non-repatriation basis? No, Indian companies have been granted general permission to accept investments on non-repatriation basis, in shares/convertible debentures by way of new/rights/bonus issue provided the investee company does not carry on agricultural/plantation activity and/or real estate business (excluding real estate development i.e. development of property and construction of houses). 56. Can NRIs make investments in non-convertible debentures of Indian companies? Yes 57. Can NRIs purchase existing shares/debentures of Indian companies by private arrangement? Yes. Reserve Bank permits NRIs, on application in form FNC 7, to purchase shares/debentures of existing Indian companies on non-repatriation basis. An undertaking about non-repatriation is to be given in form NRU. 58. Is income/interest earned on investments/deposits held in India by NRIs on non-repatriation basis allowed to be repatriated? Yes, 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 under: 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. Note:The investment/principal amount of deposits made/held on non-repatriation basis will, however, not allowed to be repatriated abroad. 59. What is the procedure to be followed for seeking repatriation in such cases? NRIs should designate a branch of an authorised dealer through whom the remittance of income/interest is to be made and make an application in form RCI to Reserve Bank through the designated branch on consolidated basis giving details of income earned during the previous financial year along with a Chartered Accountant's Certificate. Permission for remittance of net amount (i.e. after payment of tax) or credit it to NRE/FCNR account of the applicant will be granted to the designated branch. 60. Can NRIs obtain loans abroad against the collateral of shares / debentures of Indian companies? Yes. 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. 61. What is the validity period of Reserve Bank approval for the purchase of shares/debentures of Indian companies or units of domestic Mutual Funds? Reserve Bank approval is valid for a period of five years from the date of issue. This can be renewed further by making a request by means of a simple letter. 62. Is there any ceiling on the investment under the Portfolio Investment Scheme? There is an overall ceiling of 5% of paid-up share capital of the company/paid-up value of each series of convertible debentures for purchase by NRIs/OCBs (including shares/debentures acquired by FIIs). The overall ceiling can be raised to 24% if the company concerned passes a resolution to that effect in its general body meeting. Individually, NRIs/OCBs can make investment upto 1% of the paid-up share capital/each series of convertible debentures. However, there is no ceiling on investment in domestic Mutual Funds. 63. Can NRIs keep deposits with companies in India with repatriation benefits? Yes, NRIs are permitted to keep deposits with public limited companies in India for a minimum period of three years subject to certain ceilings / conditions. Application for the purpose is required to be made by the company receiving the deposits through an authorised dealer. 64. Do NRIs need permission of Reserve Bank for placing funds in fixed deposits with firms/companies on non-repatriation basis? Yes, Permission for placement of funds in fixed deposits with firms/companies in India is granted by Reserve Bank on application by the depositor or the deposit accepting firm/company, on non-repatriation basis, subject to certain ceilings/conditions. 65. Are NRIs permitted to invest in Commercial Paper (CP) issued by Indian companies? Yes, General permission has been granted by Reserve Bank to Indian companies to issue CP to NRI individuals subject to the conditions that the amount invested will not be repatriated outside India and the CP will not be transferable. 66. Is permission of Reserve Bank required for sale/transfer of Government securities/units? No, Authorised dealers have been permitted to undertake sale of Government securities/units on behalf of NRIs without prior approval of Reserve Bank. Sale/maturity proceeds can be remitted abroad if the original investment was made out of funds remitted from abroad or funds in NRE/FCNR accounts. Otherwise, they will have to be credited to NRO account of the holder. 67. Is permission of Reserve Bank required by NRIs for sale/transfer of shares/debentures of Indian companies to other NRIs? No, Transfer of shares/debentures of Indian companies by NRIs to other non-residents does not require permission of Reserve Bank. However, the transferee NRI would need permission for purchase of such shares for which an application is required to be made to Reserve Bank in form FNC 7. 68. Can NRIs transfer / sell their shares / debentures / bonds held on non –repatriation basis to residents freely? General exemption has been granted by Reserve Bank for transfer/sale of shares/debentures/bonds by NRIs/OCBs through stock exchanges if such transfers are made in favour of an Indian citizen or a person of Indian origin or a company incorporated in India and sale proceeds thereof are credited to NRO account. 69. What is the procedure for sale/transfer of shares/debentures/bonds held by NRIs with repatriation benefits? In the case of shares/debentures/bonds acquired by NRIs through stock exchanges under the Portfolio Investment Scheme, general exemption has been granted for transfer through stock exchanges provided the sale is arranged through the same designated branch through whom they were purchased. In other cases, applications for necessary permission are required to be made to Reserve Bank in form TS 4. 70. What is the procedure to be followed by NRIs for sale/transfer of shares /debentures to residents by private arrangements? NRIs are required to submit application in form TS 1 to Reserve Bank for sale of shares/debentures by private arrangements. 71. Can shares/debentures be given away as gifts to relatives? Yes, Reserve Bank has granted general permission to NRIs to transfer, by way of gift, shares, bonds and debentures of Indian companies held by them with Reserve Bank's permission to their resident close relative/s.