TaxTMI 
TaxTMI 
TaxTMI 
Master Circular on Non-Resident Ordinary Rupee (NRO) Account
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....ks may refer to respective circulars / notifications for detailed information, if so needed. Yours faithfully, (A K Pandey) 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. Facilities to a person going abroad for studies 13. International Credit Cards 14. Income-Tax 15. 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 Indian (NRI) NRI for this purpose is defined in Regulation 2 of Notification No. FEMA 5/2000- RB dated May 3, 2000. In terms of this Notification, an NRI mean....
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....ought 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) close relative [means relative as defined in Section 6 of the Companies Act, 1956] by way of crossed cheque /electronic transfer, subject to conditions within the overall limit prescribed under the Liberalis....
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....by the Authorised Bank to account holders and third parties (a) Loans to non-resident account holders and to third parties may be granted in Rupees by Authorized Dealer / bank against the security of fixed deposits subject to the following terms and conditions: (i) The loans shall be utilised only for meeting borrower's personal requirements and/or business purpose and not for carrying on agricultural/plantation activities or real estate business or for re-lending. (ii) Regulations relating to margin and rate of interest, as stipulated by Reserve Bank, from time to time, shall be complied with. (iii) The usual norms and considerations as applicable in the case of advances to trade/industry shall be applicable for such loans/facilities granted to third parties. (b) Authorised Dealer / bank may permit overdraft in the account of the account holder subject to their commercial judgement and in compliance with the interest rate etc. directives. 9. Change of residential status of account holder (a) From Resident to Non-resident (i) When a person resident in India leaves India for a country (other than Nepal or Bhutan) for taking up employment or for carrying on business or vo....
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....cable taxes. (iii) The resident Power of Attorney holder is not permitted to repatriate outside India funds held in the account other than to the non-resident individual account holder himself nor to make payment by way of gift to a resident on behalf of the non- resident account holder or transfer funds from the account to another NRO account. 13. International Credit Cards Authorised Dealer banks have been permitted to issue International Credit Cards to NRIs/PIO, without prior approval of Reserve Bank. Such transactions may be settled by inward remittance or out of balances held in the cardholder's FCNR (B) / NRE / NRO Accounts. 14. Income-Tax The remittances (net of applicable taxes) will be allowed to be made by the Authorised Dealer banks on production of requisite information in the formats prescribed by the Central Board of Direct Taxes, Ministry of Finance, Government of India from time to time. Reserve Bank of India will not issue any instructions under FEMA, 1999 clarifying tax issues. It shall be mandatory on the part of Authorised Dealers to comply with the requirement of tax laws, as applicable. 15. System of quarterly reporting of opening of NRO accounts by ind....