Nri and pio

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  • Nri and pio

    1. 1. NRI & PIO Shelley E. TRADE MARK DEPARTMENT
    2. 2. INTRODUCTION <ul><li>NRI - A person resident outside India who is a citizen of India. Non-Resident Indian is an Indian citizen who stays outside India for an uncertain duration of stay. </li></ul><ul><li>PIO - A person resident outside India, not considered a citizen of India. A Person of Indian Origin ( PIO ) is usually a person of Indian origin who is not a citizen of India. </li></ul>
    3. 3. NRI & PIO Under INCOME TAX ACT <ul><li>The definition of a NRI is significant from the perspective of FEMA, Investment and Taxation in India. The definition of NRI under the Income Tax Act is different from that under FEMA. </li></ul><ul><li>Under Section 115C (e) of the Income Tax Act , </li></ul><ul><ul><li>NRI is defined as ‘An individual being a citizen of India or a person of India origin (PIO) who is not a resident’. </li></ul></ul><ul><ul><li>A person is deemed to be a PIO if he or either of his parents or any of his grandparents, was born in undivided India. </li></ul></ul>
    4. 4. NRI & PIO FEMA rules and regulations <ul><li>NRI: </li></ul><ul><ul><li>A person resident outside India who is either a citizen of India or is a person of Indian origin (PIO).’ </li></ul></ul><ul><li>A Person of Indian Origin (PIO) is a citizen of any country other than Bangladesh or Pakistan, if </li></ul><ul><ul><li>a) he at any time held an Indian passport or b) he or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 or c) he is spouse of an Indian citizen or a person referred to in ‘a’ or ‘b’. </li></ul></ul>
    5. 5. Non Resident Indian (NRI) <ul><li>A Non Resident Indian (NRI) is an Indian Citizen, who stays outside India for an uncertain duration of stay. </li></ul><ul><li>A person is a Non Resident Indian (NRI) for a given financial year if he / she fulfills any of the following conditions for that financial year: </li></ul><ul><ul><li>He / she is in India in that year for 182 days or more (This irrespective of whether the stay is a continuous period of 182 days, or in multiple parts) </li></ul></ul><ul><ul><li>In the 4 years preceding that year, he / she has been in India for a total of 365 days or more AND has been in India for 60 days or more in that year. (Again, this irrespective of whether the stay is a continuous or in multiple parts) </li></ul></ul><ul><li>Note: A Hindu Undivided Family (HUF) is considered a Non Resident in a year if its management is done from outside India during that year. </li></ul>
    6. 6. Person of Indian Origin (PIO) <ul><li>A person is called a “Person of Indian Origin” (or PIO) if he / she was ever a citizen of India, or if he / she has roots in India. </li></ul><ul><li>A person is called a “Person of Indian Origin” (or PIO) if: </li></ul><ul><li>He / she is a citizen of any country other than Pakistan / Bangladesh. </li></ul><ul><li>He / she held an Indian passport at any time OR - Either of his / her parents or any of his / her grand parents were a citizen of India OR </li></ul><ul><li>He / she is a spouse of an Indian citizen or a spouse of a person whose parents / grand parents were a citizen of India </li></ul>
    7. 7. Acquisition of immovable property in India By NRI and PIO <ul><li>Acquisition of immovable property in India by persons resident outside India (foreign national) is regulated in terms of section 6 (3) (i) of the Foreign Exchange Management Act (FEMA), 1999. </li></ul><ul><li>Agricultural/ plantation land - PIOs & OCIs cannot acquire agricultural land/plantation property/farm house in India by way of purchase </li></ul><ul><li>Residential/ commercial property –No permission required for purchasing residential/ commercial property in India by NRI’s and PIOs. </li></ul><ul><li>There are no restrictions on the number of residential / commercial properties that can be purchased. </li></ul><ul><li>A foreign national of non-Indian origin cannot be a second holder to immovable property purchased by NRI / PIO </li></ul>
    8. 8. Transfer of Property by NRI/PIO Transferring residential/ commercial property NRI PIO By sale Can sell to person resident in India; NRI or PIO Can sell only to a person resident in India By gift Can gift to person resident in India; NRI; or PIO. If property is being gifted to a foreign national of non-Indian origin, prior permission of RBI is required Can gift to person resident in India; NRI; or PIO. If property is being gifted to a foreign national of non-Indian origin, prior permission of RBI is required
    9. 9. Transfer of Property by NRI/PIO Transferring agricultural/plantation/ farm house property NRI PIO By sale Can sell only to person resident in India Can sell only to a person resident in India who is a citizen of India By gift Can gift only to person resident in India Can gift only to a person resident in India who is a citizen of India
    10. 10. Mortgage <ul><li>NRI / PIO can mortgage to: </li></ul><ul><ul><li>An authorized dealer / housing finance institution in India – without the approval of Reserve Bank. </li></ul></ul><ul><ul><li>A party abroad - with prior approval of Reserve Bank. </li></ul></ul><ul><li>A foreign national of non-Indian origin can mortgage only with prior approval of Reserve Bank </li></ul><ul><li>A foreign company which has established a Branch Office or other place of business in accordance with FERA/FEMA regulations has general permission to mortgage the property with an authorized dealer in India </li></ul>
    11. 11. Sale / Purchase by Foreign Embassies/ Diplomats/Consulate <ul><li>May purchase/sell Immovable Property in India other than agricultural/plantation/ farm house property </li></ul><ul><li>They should obtain clearance from Ministry of External Affairs through inward remittance of Foreign Exchange. </li></ul><ul><li>The consideration for acquisition of immovable property in India is paid out of funds remitted from abroad through the normal banking channels </li></ul>
    12. 12. PAYMENT MODE <ul><li>Payment can be made by NRI / PIO out of </li></ul><ul><ul><li>Funds remitted to India through normal banking channel or </li></ul></ul><ul><ul><li>Funds held in NRE / FCNR / NRO account maintained in India </li></ul></ul><ul><li>No payment can be made either by traveler's cheque or by foreign currency notes and also no payment can be made outside India. </li></ul>
    13. 13. Repatriation of Sale Proceeds by NRI/PIO <ul><li>Property acquired as per rules prevalent </li></ul><ul><li>In case the payment is made for acquisition out of foreign exchange sources through normal Banking Channels/NRE/FCNR the amount repatriated should not exceed the foreign currency equivalent paid. </li></ul><ul><li>Capital Gains may be credited to NRO Account from which NRI/PIO may repatriate the sale proceeds abroad up to US$ 1 million per financial year subject to tax compliance </li></ul><ul><li>In case the payment is made for acquisition out of balances held in NRO Account out of rupee sources NRI/PIO may repatriate the sale proceeds abroad up to US$ 1 million per financial year subject to tax compliance </li></ul>
    14. 14. Repatriation of Sale Proceeds by NRI/PIO <ul><li>The sale proceeds of immovable property acquired by way of gift should be credited to NRO account only. From the balance in the NRO account, NRI/PIO may remit up to USD one million, per financial year, subject to the satisfaction of Authorised Dealer and payment of applicable taxes </li></ul><ul><li>Remittance will be permitted on submission of certificate of CA in form prescribed by CBDT </li></ul><ul><li>Repatriation in the above cases are also restricted to not more than two such residential properties. </li></ul>
    15. 15. OTHER ASPECTS <ul><li>NRI/PIO can rent out the property without the approval of the Reserve Bank. The rent received can be credited to NRO / NRE account or remitted abroad. </li></ul><ul><li>Powers have been delegated to the Authorised Dealers to allow repatriation of current income like rent, dividend, pension, interest, etc. of NRIs/PIO who do not maintain an NRO account in India based on an appropriate certification by a Chartered Accountant, certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid/provided for. </li></ul>
    16. 16. MARRIAGE & DIVORCE <ul><li>Personal Laws apply to Marriage </li></ul><ul><li>The law under which the marriage is solemnized, whether customary or statutory law, then the same law shall be applicable. </li></ul><ul><li>Divorce </li></ul><ul><li>In case of matrimonial disputes, the law under which the marriage was solemnized, shall be applicable. </li></ul><ul><li>Custody of Children </li></ul><ul><li>No straitjacket formula available under Indian Law. </li></ul><ul><li>B est interest of the child is the penultimate deciding criterion </li></ul>
    17. 17. <ul><li>THANK YOU </li></ul>

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