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''Return 2 India'' is much cherished dream but the fears re: ''can or cannot continue'' or say ''to or not to disclose overseas assets'' are most dreaded ones. Fortunately NRIs returning home  for settlement can happily  "keep the cake and eat it too". Returning NRIs can freely continue to hold overseas movable as also immovable assets; maintain foreign currency accounts in India and also earn tax free income in India & abroad.

NRIs returning home come back with lot of hopes, anxieties, uncertainties - quite often not sure about their settlement plans-mis-information re. rules & regulations, all add to complete a perfect picture of confusion, despair & doubts. Fortunately Foreign Exchange Laws, Tax Laws & Banking Regulations for Returning NRIs, viewed from a correct perspective, are absolutely simple and liberal. The same are discussed hereunder : 

Movable Assets Abroad

Immovable Assets Abroad

Bank Accounts Abroad

Bank Accounts in India

Shares and Securities in India

Other Assets in India

All the above topics are explained in simple language together with:


Copy of relevant Section / Regulation of the Act.


Copy of relevant Notification, Circular or Press Release.


An example in case of intricate provisions.

"RETURNING NRI's CORNER" is created recognizing these confusions and doubts - an attempt to give a correct perspective of ;

[ I ]  Foreign Exchange Regulations as regards :


bank accounts in India i.e. NRE, FCNR(B), RFC & NRO A/c. etc. 



continuation of State Bank of India's Resurgent India Bonds (RIBs) and India Millennium Deposits (IMDs),



Overseas bank accounts, movable assets & immovable assets abroad. 



other assets in India, 


and also 

[ II ] Tax Provisions pertaining to Returning NRIs as regards :


bank accounts in India,i.e. NRE, FCNR(B), RFC & NRO A/c. etc. 


interest income of State Bank of India's RIBs and IMDs.



Overseas income. 


Wealth Tax as regards :

  01 Indian assets, 
  02 exemptions under Wealth Tax.

femaonline.com  - is one of its only kind of website displaying most updated Foreign Exchange Management Regulations - updated almost everyday. The website also has special corners for Non Resident Indians (NRIs), Returning NRIs and Bankers.

Although, the content of the website can be viewed by registered users only, we welcome you to a preview of detailed contents of " Returning NRI's Bank Accounts in India - [FCNR(B)] " 


Returning NRI's Foreign Currency Non Resident (B) - [FCNR-(B)]

1. An NRI upon his return to India for settlement, i.e. taking up employment, carrying on business or profession or any purpose indicating intention to stay in India for uncertain period holding an FCNR(B) account


can continue such deposit uptill maturity;
  . at contracted rate of interest & other terms if he so decides. 
  .02 Upon maturity,  returning NRI is required to :


convert the FCNR(B) deposit to Resident Foreign Currency Account (RFC), or  
    ii) convert the FCNR(B) deposit as Resident account.  

[Paragraph 10 of Sch.2 of F.E.M. (Deposit) Regulations, 2000]1


Definitions :


"FCNR(B) Account" means a Foreign Currency Non-resident (Bank) account referred to in clause (ii) of sub-regulation (1) of Regulation 5
[Para 2(v) of F.E.M. (Deposit) Regulations, 2000 ]2


" Non Resident Indian ?  for the said chapter means a person of Indian origin being an Indian citizen or a foreign citizen who is residing outside India.
[Para 2(vi) of F.E.M. (Deposit) Regulations, 2000 ]3

Recently RBI has clarified that students studying abroad also be treated as NRIs under FEMA and accordingly be eligible for foreign investments and NRE/FCNR a/cs


"Overseas Corporate Body " means a Company, Partnership Firm, Society etc. wherein 60 % or more ownership lies with NRIs or a Trust wherein 60 % or more financial interest is irrevocably held by NRIs.
[Para 2(xi) of F.E.M. (Deposit) Regulations, 2000 ]4


"Person of Indian Origin" means an Indian citizen or a foreign citizen who;

    i) at any time held an Indian Passport, or
    ii) himself or his parents or grand parents were citizens of India, or
    iii) is a spouse of an Indian citizen, or
    iv) is a spouse of person referred to in (i) or (ii) above.

[Para 2(xii) of F.E.M. (Deposit) Regulations, 2000 ]5





An NRI individual only can be a returnee NRI, and as such can continue such account uptil maturity.

2. CURRENCY    US Dollars, Pound Sterling, Japanese Yen ,Euro and Deutsche Mark..
3. PERIOD                  12 Months to 36 Months.
4. REPATRIABILITY         Principal and Interest ,upon maturity  may be transferred to Resident Foreign Currency a/c. or to a resident a/c.
5. INTEREST  Compounded  Half yearly or on an annual basis as desired by the depositor


Can be continued as Fixed Deposits uptil maturity for the tenure, but cannot be renewed as such.


Available to account holder as well as third party resident in India.    
LOANS IN INDIA-to ACCOUNT HOLDER : For business investment in shares & securities, purchase of house property for own residential purpose and any other personal purpose. 
LOANS IN INDIA-to 3RD PARTY : For personal or business purpose.


Maintained as   FCNR(B) [ until maturity]  and thereafter transferable to :
- Residential Foreign Currency ( RFC)  Account or
- to be designated as  Resident  Rupee  Account. 

9. ATTORNEY An Attorney may operate the account, but can not open RFC / Resident  account .
10. NOMINATION   Permissible.

Permissible: - However for 
period of  less than 12 Months   -   No  Interest payable,
above 12 Months   -   Subject to Penalty - As per Bank Rules.




Interest exempt from Income Tax, uptil maturity.


Balance not subject to Wealth Tax.


No Gift Tax provisions in India.. However w.e.f from  1-9-2004 it is taxable in hands of recipient under I.T Act.



Not Applicable , as maintaining the Deposit only till maturity is permissible.




Local disbursements .



Maintained as   FCNR(B) [ until maturity]  and thereafter transferable to :
- Residential Foreign Currency ( RFC)  Account or
- to be designated as  Resident  Rupee  Account. 




[Para 10 of Sch.2 of F.E.M. (Deposit) Regulations, 2000]


Change of resident status of the account holder.


When an account holder becomes a person resident in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by him. However, except the provisions relating to rate of interest and reserve requirements as applicable to FCNR(B) deposits, for all other purposes such deposits shall be treated as resident deposits from the date of return of the account holder to India. Authorised dealers should convert the FCNR(B) deposits on maturity into resident rupee deposit accounts or RFC account (if the depositor is eligible to open RFC account), at the option of the account holder and interest on the new deposit (rupee account or RFC account) shall be payable at the relevant rates applicable for such deposits.



[Para 2(v) of F.E.M. (Deposit) Regulations, 2000 ]

Para 2(v) 'FCNR(B) account' means a Foreign Currency Non-Resident (Bank) account referred to in clause (ii) of sub-regulation (1) of Regulation 5;



[Para 2(vi) of F.E.M. (Deposit) Regulations, 2000 ]

Para 2(vi) 'Non-Resident Indian (NRI)' means a person resident outside India who is a citizen of India or is a person of Indian origin; 



[Para 2(xi) of F.E.M. (Deposit) Regulations, 2000 ]

Para 2(xi) 'Overseas Corporate Body (OCB)' means a company, partnership firm, society and other corporate body owned directly or indirectly to the extent of at least sixty per cent by Non-Resident Indians and includes overseas trust in which not less than sixty per cent beneficial interest is held by Nonresident Indians directly or indirectly but irrevocably;



[Para 2(xii) of F.E.M. (Deposit) Regulations, 2000 ]

Para 2(xii) 'Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan, if


he at any time held Indian passport; or



he or either of his parents or any of his grand- parents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955);or



the person is a spouse of an Indian citizen or a person referred to in sub-clause ( a ) or (b);

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