TaxTMI 
TaxTMI 
Master Circular on Non-Resident Ordinary Rupee (NRO) Account
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....idance. The Authorised Persons and the Authorised Dealer Category - I banks may refer to respective circulars/ notifications for detailed information, if so needed. Yours faithfully (C D Srinivasan) Chief General Manager INDEX 1. Definitions 2. Eligibility 3. Types of Accounts 4. Joint Accounts with Residents / Non- Residents 5. Permissible Credits /Debits 6. Remittance of Assets 7. Foreign nationals of non-Indian origin on a visit to India 8. Grant of loans/overdrafts by the Authorised Bank to account holders and third parties 9. Change of resident status of account holder 10. Treatment of loans /overdrafts in the event of change in the resident status of the borrower 11. Payment of funds to Non-resident / Resident nominee 12. Operation of NRO account by Power of Attorney holder 13. Facilities to a person going abroad for studies 14. International Credit Cards 15. Income-Tax 16. System of quarterly reporting of opening of NRO accounts by Individuals of Bangladesh Annex-1 Statement/returns to be submitted to the Reserve Bank APPENDIX 1. Definitions Non-Resident....
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....rency exceeding USD 5000 or its equivalent in the form of cash should be supported by currency declaration form. Rupee funds should be supported by encashment certificate, if they represent funds brought from outside India. (iii) Transfers from rupee accounts of non-resident banks. (iv) Legitimate dues in India of the account holder. This includes current income like rent, dividend, pension, interest, etc. (v) Sale proceeds of assets including immovable property acquired out of rupee / foreign currency funds or by way of legacy /inheritance. (vi) Resident individual may make a rupee gift to a NRI/PIO who is a close relative of the resident individual [close relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer. The amount shall be credited to the Non-Resident (Ordinary) Rupee Account (NRO) a/c of the NRI / PIO and credit of such gift amount may be treated as an eligible credit to NRO a/c. The gift amount would be within the overall limit prescribed under the Liberalised Remittance Scheme (LRS) for a resident individual. (vii) Resident individual may lend to a Non-resident Indian (NRI)/ Person of Indian Origin (PIO)....
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....red under a deed of settlement made by either of his parents or a close relative (as defined in Section 6 of the Companies Act, 1956) and the settlement taking effect on the death of the settler, on production of the original deed of settlement, subject to payment of taxes as prescribed by CBDT from time to time. 6.3 Assets acquired in India out of Rupee funds NRI/PIO may remit sale proceeds of immovable property purchased by him as a resident or out of Rupee funds as NRI/PIO, without any lock-in-period, subject to the above limit of USD 1 million, per financial year. 6.4 Restrictions (a) The remittance facility in respect of sale proceeds of immovable property is not available to citizens of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan. A person or his successor who has acquired immovable property in accordance with Section 6(5) of FEMA, 1999 cannot repatriate sale proceeds of such property outside India except with prior permission of the Reserve Bank. (b) The facility of remittance of sale proceeds of other financial assets is not available to citizens of Pakistan, Bangladesh, Nepal and Bhutan. 7. Foreign nationals of non-India....
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....EMA, 1999 and are eligible to open/hold a resident savings bank account are permitted to re-designate their resident account maintained in India as NRO account on leaving the country after their employment to enable them to receive their legitimate dues subject to certain conditions. (b) From Non- resident to Resident NRO accounts may be re-designated as resident Rupee accounts on return of the account holder to India for taking up employment, or for carrying on business or vocation or for any other purpose indicating his intention to stay in India for an uncertain period. Where the account holder is only on a temporary visit to India, the account should continue to be treated as non-resident during such visit. 10. Treatment of loans /overdrafts in the event of change in the residential status of the borrower In case of a person who had availed of loan or overdraft facilities while resident in India and who subsequently becomes a person resident outside India, the Authorised Dealer/ bank may at their discretion and commercial judgement allow continuance of the loan/ overdraft facilities. In such cases, payment of interest and repayment of loan may be made by inward remi....
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....arterly reporting of opening of NRO accounts by individual/s of Bangladesh: i. The Authorised bank should put in place a system of quarterly reporting whereby each branch of the Authorised bank shall maintain a record of the bank accounts opened by individual/s of Bangladesh nationality and details of such account shall be forwarded to their Head Office. The Head Office of the bank shall furnish details of such accounts on quarterly basis to the Under Secretary (Foreigners), Ministry of Home Affairs, NDCC-II Building, Jai Singh Road, New Delhi - 110 001 E Mail. ii. The report shall contain details of Name/s of the Individual/s, Date of arrival in India, Passport No. and Place/Country of issue, Residential permit reference and date and place of issue, Name of the FRO/ FRRO concerned and the Complete address and contact number of the branch where the bank account is being maintained. Annex 1 Statement/returns to be submitted to the Reserve Bank Particulars of statement Periodicity Relevant instructions Facilities to NRIs/PIO and Foreign Nationals - Liberalisation - Remittance from NRO account. Monthly A.P (DIR Series) Circular No. 106 dated Februar....