Presentation _ NRI_ 08th Dec 2023_ ICAIpdf

ACCOUNTS UNDER FEMA, 1999
The Institute of Chartered Accountants of India
08th Dec 2023 || Faculty: CA. Sudha G. Bhushan
Sudha@taxpertpro.com || 09769033172

(a) Under Foreign Direct Investment policy 2017, NRI is defined as follows:
”‘Non-Resident Indian’(NRI) means an individual resident outside India who is a citizen of India or is an ‘Overseas Citizen
of India’cardholder within the meaning of section 7 (A) of the Citizenship Act, 1955. ‘Persons of Indian Origin’cardholders
registered as such under Notification No. 26011/4/98 F.I. dated 19.8.2002 issued by the Central Government are deemed to
be ‘Overseas Citizen of India’cardholders”
(b) Under Foreign Exchange Management (Deposit) Regulations, 2016, vide Notification No. FEMA 5(R)/2016-RB dated
April 01, 2016
'Non-Resident Indian (NRI)' means a person resident outside India who is a citizen of India.
(c) Under Foreign Exchange Management (Investment in firm or proprietary concern in India) Regulations, 2000
'Non-Resident Indian (NRI)' means a person resident outside India who is a citizen of India or is a person of Indian origin;
(d) Foreign Exchange Management (Remittance of Assets) Regulations, 2016
'Non-Resident Indian’(NRI) shall have the same meaning assigned under the Foreign Exchange Management (Deposit)
Regulations, 2016;
FEM (Deposit) Regulations, 2000 have been repealed and replaced by FEM (Deposit) Regulations, 2016 with effect from
April 1, 2016 (FEMA 5(R)), the term NRI, wherever it appeared, has been replaced by NRI and/or PIO. Prior to this, PIOs
were covered within the definition of NRI.
Definition under FEMA

Index
As per most recent NDI Rules
'Non-Resident Indian (NRI)' means a person resident outside India who is a citizen of India.
(e)Foreign Exchange Management (Borrowing and lending in rupees) Regulations,
2000
"NRI shall have the same meanings as assigned to them respectively in Foreign Exchange
Management (Deposits) Regulations, 2000 made by Reserve Bank under clause (f) of sub-
section (3) of section 6 of the Act";

• The concept of PIO was introduced in 2002
• The concept of OCI was introduced in 2006

Section 7Aof theAmendmentAct
a person shall be eligible to register as an OCI cardholder if any of the following conditions are satisfied:
(i) they are citizens of another country;
• A person of full age and capacity and who is a citizen of another country, but:
• was a citizen of India at the time of or any time after the commencement of the Constitution;
• was eligible to become a citizen of India at the time of commencement of the Constitution;
• belonged to a territory that became part of India after the 15th day of August, 1947.
(ii) Children
• A child or a grand-child or a great grand-child of a citizen of another country, as mentioned in point (i) above or a minor child
of such citizen;
• A minor child whose both parents or one of the parents is a citizen of India.
(iii) Spouses
• Spouse of a citizen of India or an OCC, the spouse being of foreign origin. To be eligible for registration, the marriage should
have been registered and subsisted for a continuous period of not less than 2 (two) years immediately preceding the
presentation of the application. Such spouse shall also be subjected to prior security clearance from a competent authority in
India.
Citizens of Pakistan or Bangladesh (and other countries that may be notified by the Central Government) are not permitted to
register as OCCs and the restrictions applying to those nationals have been extended to cover such person's parents, grandparents
or great grandparents under the Amendment Act.

Citizenship (Amendment)Act, 2015
PIO
OCI
OCI
Cardholder

Investment by Non Resident Indians

Investment
by NRI
Bank Accounts
Foreign Exchange Management (Deposit) Regulations, 2016
Investment in Immovable property
Foreign Exchange Management (Acquisition and Transfer of
Immovable Property India) Regulations, 2015
Amended now
Investment in Share and other
securities
Foreign Exchange Management (Transfer or issue of security by a
person resident outside India) Regulations, 2000
Amended now
Borrowing and lending by NRI
Foreign Exchange Management (Borrowing and lending in rupees)
Regulations, 2000 or Foreign Exchange Management (Borrowing and
lending in Foreign Exchange) Regulations, 2000.
Capital contribution in any proprietary
or partnership concern in India
Foreign Exchange Management (Investment in firm or proprietary
concern in India) Regulations, 2000 vide Notification No. FEMA 24
/2000-RB dated 3rd May 2000
Remittance of Assets
Foreign Exchange Management (Remittance of Assets) Regulations,
2016
Investment by Non Resident Indians and FEMA Regulations

Investment by Non Resident Indins and FEMA Regulations
• Opening, holding and maintaining foreign currency accounts by a person resident in India is regulated in terms of
section 9 of the Foreign Exchange Management Act, 1999 (FEMA) read with Foreign Exchange Management (Foreign
Currency Accounts by a person resident in India) Regulations, 2015 issued vide 1Notification No. FEMA 10(R)/2015-
RB dated January 21, 2016.
• Maintenance of deposits/ accounts between a person resident in India and a person resident outside India is regulated in
terms of sub-section (3) of section 6 of the Foreign Exchange Management Act, 1999 (FEMA) read with Foreign
Exchange Management (Deposit) Regulations, 2016 issued vide 2Notification No. FEMA 5(R)/2016-RB dated April 1,
2016.
• These Regulations are amended from time to time to incorporate the changes in the regulatory framework and published
through amendment notifications.

Account
By Person
resident in India
Foreign
Currency
account in India
By Resident
Individuals
By other
Account
maintained
outside India
BY Resident
Individuals
By Others
By Person
resident outside
India
By NRI/PIOs
By others
Accounts underFEMA
Foreign
Exchange
Management
(Foreign
currency
accounts
by
a
person
resident
in
India,2015
Foreign Exchange Management
(Deposit) Regulations, 2016

Foreign
Exchange
Management
(Foreign
currency
accounts
by
a
person
resident
in
India
Account
By person
resident in India
Foreign
Currency
account in India
By Resident
Individuals
By other
Account
maintained
outside India
BY Resident
Individuals
By Others
By Person
resident outside
India
By NRI/PIOs
By others
Account
By Person resident outside India

By Person resident outside India
FCNR(B) account
NRE account
NRO account
Special Non-Resident Rupee
Account (SNRR account)
Escrow Account
Deposits by companies
Other
Unincorporated joint ventures
(UJV)
shipping or airline company
incorporated outside India
For Adjustment in export and
import value
ForeignExchange Management (Deposit)Regulations,2016

• Regulations – FEMA 5/2000-RB on Foreign Exchange Management (Deposit) Regulations, 2000 amended from
time to time.
REGULATORY FRAMEWORK
NRE A/C
SCHEDULE 1
FCNR - B A/c
SCHEDULE 2
NRO A/c
SCHEDULE 3
SNRR A/c
Schedule 4
Escrow A/c

NRIs and PIOs -
eligible to open
Rupee
Denominated
Savings, Current
or fixed deposit
Can be opened by
remittance of
funds in free
foreign exchange.
Principal and
interest both -
Repatriable
Interest lying to
the credit of NRE
accounts - exempt
from tax

Debit
Credits
 local disbursements
 transfer to other NRE / FCNR accounts of person
eligible to open such accounts,
 remittance outside India,
 investments in shares / securities/commercial
paper of an Indian company, etc.
 Inward remittance to India in permitted currency
 proceeds of account payee cheques, demand drafts
/ bankers' cheques, issued against encashment of
foreign currency
 transfers from other NRE / FCNR accounts
 sale proceeds of FDI investments
 interest accruing on the funds held in such
accounts
 interest on Government securities/dividends on
units of mutual funds purchased by debit to the
NRE/FCNR(B) account of the holder, certain types
of refunds, etc.
PERMISSIBLE DEBITS/CREDITS

• One of our NRE account XNXB TRUST 000v000000 is a trust account opened in SB XXX NRE.
• The account is freezed due to RE KYC and customer approached us for activation of the account. The trust is
registered in WEMBELEY LONDON UK and account is opened in our branch. We have contacted NRI CELL and
they advised us that trust account cannot be opened in NRE SCHEME so for further process.

• In NRE account the first holder has expired. The nominee is also a NRI, he wants to take the proceeds of the
deceased account and again wants to create a NRE Term deposit in the same branch. As we understand under
RBI/FEMA guidelines the proceeds of the NRE deposit account can be transferred in to the NRO account of
Nominee.
• There after he can transfer the amount as per his choice to anywhere. The nominee has NRE and NRO SB account
the branch.
• Please provide us the FEMA/RBI guidelines that can the nominee transfer the amount directly in his NRE SB
account. With specific rules/directives. If proceeds will be credited in NRO SB account of nominee than transfer to
his NRE SB account, form no. 15 CA /15CB will require.

The NRI deposits are regulated by Foreign Exchange Management (Deposit) Regulations, 2016. Schedule 1
of the said regulation deals with Non-Resident (External) Account Scheme (NRE account).
The Clause 3 of the schedule specifies the permitted credits which are as follows:
“ Permitted Credits:
d) Transfers from other NRE/ FCNR (B) accounts”
Also, Clause 8 of the aforementioned Schedule mentions
“8. Repatriation of funds to non-resident nominee:
Authorised dealers/ authorised banks may allow remittance of funds lying in the NRE account of the deceased
account holder to his non-resident nominee.”

• In the light of regulation mentioned above, it may be inferred that there may be transfer from one NRE account to
other NRE account.
• Also, as specifically mentioned in clause 8 of Schedule 1 to Foreign Exchange Management (Deposit) Regulations,
2016 and as reproduced above - in the case where the nominee is NRI and he holds the NRE account the transfer
may be made in his NRE account.
• Therefore, where the nominee is also a NRI, he can take the proceeds of the deceased account and can create a NRE
Term deposit in the same branch.

NON RESIDENT (ORDINARY) RUPEE ACCOUNT
NRIs and PIOs
Rupee
Denominated
Savings, Current
or Fixed Deposit
Can be opened
jointly with
residents
NON –
Repatriable*
Interest lying to
the credit of NRO
accounts is
taxable
*repatriable subject to conditions

Debit
Credits
 All local payments in rupees including payments for
investments in India subject to compliance with the
relevant regulations made by the Reserve Bank.
 Remittance outside India of current income like rent,
dividend, pension, interest, etc. in India of the
account holder.
 Remittance up to USD one million, per financial year
(April- March), for all bona fide purposes, to the
satisfaction of the Authorised Dealer bank.
 Transfer to NRE account of NRI within the overall
ceiling of USD one million per financial year subject
to payment of tax, as applicable
 Proceeds of remittances from outside India through
normal banking channels received in any permitted
currency.
 Any foreign currency, which is freely convertible,
tendered by the account holder during his temporary
visit to India.
 Transfers from rupee accounts of non-resident banks.
 Legitimate dues in India of the account holder. This
includes current income like rent, dividend, pension,
interest, etc.
 Sale proceeds of assets including immovable property
acquired out of rupee / foreign currency funds or by
way of legacy /inheritance.
 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.

FOREIGN CURRENCY NON RESIDENT (BANKS) ACCOUNT
NRIs and PIOs are
eligible to open
Denominated in
Foreign Currency
Only in the form of
term deposit
Accounts can be
opened by remittance
of funds in free
foreign exchange.
Repatriable
Risk of foreign
exchange fluctuations
borne by Bank

Debit
Credits
 local disbursements
 transfer to other NRE / FCNR accounts of
person eligible to open such accounts,
 remittance outside India,
 investments in shares / securities/commercial
paper of an Indian company, etc.
 Inward remittance to India in permitted
currency
 proceeds of account payee cheques, demand
drafts / bankers' cheques, issued against
encashment of foreign currency
 transfers from other NRE / FCNR accounts
 sale proceeds of FDI investments
 interest accruing on the funds held in such
accounts
 interest on Government securities/dividends on
units of mutual funds purchased by debit to the
NRE/FCNR(B) account of the holder, certain
types of refunds, etc.
PERMISSIBLE DEBITS/CREDITS – FCNR (B) A/C

Any person resident
outside India having
business interest in
India
Non Interest
Bearing
Debits and credits
specific to the
business
NEW Schedule 4 Repatriable
Transactions subject
to Taxes
Special Non-Resident Rupee Account - SNRR account

NRO Account
SNRR Account
Feature
Any person resident outside India for putting through bonafide
transactions in rupees.
Individuals/ entities of Pakistan nationality/ origin and entities of
Bangladesh origin require the prior approval of the Reserve Bank of
India.
However, a citizen of Bangladesh/Pakistan belonging to minority
communities in those countries i.e. Hindus, Sikhs, Buddhists, Jains,
Parsis and Christians residing in India and who has been granted LTV or
whose application for LTV is under consideration, can open one NRO
account with an AD bank subject to the conditions mentioned
in Notification No. FEMA 5(R)/2016-RB dated April 01, 2016, as
updated from time to time.
Any person resident outside India, having a business
interest in India for putting through bona fide transactions in
rupees.
Opening of SNRR accounts by Pakistan and Bangladesh
nationals and entities incorporated in Pakistan and
Bangladesh requires prior approval of Reserve Bank.
Who can open
Current, Savings, Recurring or Fixed Deposit;
Rate of interest – as per guidelines issued by Department of Regulation.
Non-interest bearing
Type of Account
Credits:
Inward remittances, legitimate dues in India, transfers from other NRO
accounts and any amount received in accordance with the
Rules/Regulations/Directions under FEMA, 1999.
Debits:
Local payments, transfer to other NRO accounts, remittance of current
income, settlement of charges on International Credit Cards.
Debits and credits specific/ incidental to the business
proposed to be done by the account holder
Permissible Transactions

No such restrictions on tenure.
Concurrent to the tenure of the contract /
period of operation / the business of the
account holder and in no case should exceed
seven years, other than with approval of the
Reserve Bank.
Restriction of seven years is not applicable
to SNRR accounts opened for the purposes
stated at sub. paragraphs i to v of paragraph
1 of Schedule 4 of FEMA 5(R).
Tenure
Not repatriable except for current income;
and remittances by NRIs/ PIOs up to USD 1
million per financial year in accordance with
the provisions of FEMA 13(R).
Repatriable
Repatriability

Non resident or
Resident together
with non resident
Foreign Inward
remittance through
Normal Banking
channel
Operational for 6
months
NEW Schedule 5 Non interest bearing
Repatriable
(exchange risk to be
born by Non
resident)
ESCROW ACCOUNT

LOAN AGAINST DEPOSIT IN NRE A/C
loan
In India
In INR
To the account
Holder
permitted
To third party Permitted
In Foreign
Currency
To the account
holder
Permitted
Outside India
To the account
holder
Permitted

LOAN AGAINST DEPOSIT IN FCNR(B)
loan
In India
In INR
To the account
Holder permitted
In Foreign
Currency
To the account
holder Permitted
Outside India
To the account
holder Permitted

LOAN AGAINST DEPOSIT IN NRO A/C
loan
In India
In INR
To the account
Holder
Permitted
subject to
extant
Rules
To third party
Permitted
subject to
conditions
In Foreign
Currency
To the account
holder
Not
Permitted
To third party
Not
Permitted
Outside India
To the account
holder
Not
permitted
To third party
Not
Permitted
•Personal requirement
and / or business
purpose.*
To the
accoun
t
holder
•Personal requirement
and / or business
purpose*
To
third
party
Resident individual to 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.
The loan amount should be credited to the NRO a/c of the
NRI /PIO. Credit of such loan amount may be treated as an
eligible credit to NRO a/c;
* The loans
cannot be
utilised for the
purpose of on-
lending or for
carrying on
agriculture or
plantation
activities or for
investment in
real estate
business.
CA. Sudha G. Bhushan || Sudha@taxpertpro.com

•i) Personal purposes or for carrying on business activities*
•ii) Direct investment in India on non-repatriation basis by way of contribution to the capital
of Indian firms / companies
•iii) Acquisition of flat / house in India for his own residential use.
To the
Account
holder
•Fund based and / or non-fund based facilities for personal purposes or for carrying on
business activities *.
To
Third
Party
•Fund based and / or non-fund based facilities for bonafide purposes.
Abroad
*The loans cannot be utilised for the purpose of on-lending or for carrying on agriculture or plantation
activities or for investment in real estate business.
PURPOSE OF LOAN –IN CASE OF NRE A/C AND FCNR (B) A/C

•Personal requirement and / or business
purpose.*
To the
account
holder
•Personal requirement and / or business
purpose*
To third
party
Resident individual to 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.
The loan amount should be credited to the NRO a/c of the NRI /PIO. Credit of such loan
amount may be treated as an eligible credit to NRO a/c;
PURPOSE OF LOAN – NRO ACCOUNT
* The loans cannot be
utilised for the purpose of
on-lending or for carrying
on agriculture or plantation
activities or for investment
in real estate business.

A Comparison
NRE Account is meant for foreign
exchange earned outside India and
transferred to India
NRO Account are meant to keep the
money earned in India before or after
becoming an NRI

• Save as otherwise provided in the Act or rules or regulations made thereunder, no person resident in India shall
open or hold or maintain a Foreign Currency Account:
• Provided that a Foreign Currency Account held or maintained before the commencement of these Regulations by a
person resident in India with special or general permission of the Reserve Bank, shall be deemed to be held or
maintained under these Regulations
• Provided further that the Reserve Bank, may on an application made to it, permit a person resident in India to open
or hold or maintain a Foreign Currency Account, subject to such terms and conditions as may be considered
necessary. [RBI Notification No.FEMA 10 /2000-RB dated 3rd May 2000]
REGULATION

Account
By person
resident in India
Foreign
Currency
account in India
By Resident
Individuals
By other
Account
maintained
outside India
BY Resident
Individuals
By Others
By Person
resident outside
India
By NRI/PIOs
By others
Accounts - By Resident in India
Foreign
Exchange
Management
(Foreign
currency
accounts
by
a
person
resident
in
India

ForeignExchangeManagement(ForeigncurrencyaccountsbyapersonresidentinIndia2016
Foreign Currency account in
India
By Resident Individuals
Exchange Earners’ Foreign
Currency (EEFC) Account
Resident Foreign Currency
Account
(Domestic) Account
By other
A Unit in a Special Economic
Zone (SEZ)
Diamond Dollar Accounts (DDAs)
Exporters
Other cases
Indian agent of a shipping or an
airline company incorporated
outside India
ship-manning/ crew managing
agencies
Project Offices
Indian company receiving foreign
investment
organisers of international
seminars etc

Foreign Currency Account outside India
Others
office/ branch/ representative outside
India
Exporters
External Commercial Borrowings
(ECB)
For making Overseas Direct Investment
shipping or airline company
incorporated in India
Life Insurance Corporation of India or
General Insurance Corporation of India
Exhibition/ Trade fair
Resident
Individual
On a visit to a foreign country
Abroad for studies
LRS
Salary
ForeignExchangeManagement(ForeigncurrencyaccountsbyapersonresidentinIndia2016

RESIDENT FOREIGN
CURRENCY
(DOMESTIC)
ACCOUNT
RFRESIDENT
FOREIGN
CURRENCY
ACCOUNT
EXCHANGE
EARNERS
FOREIGN
CURRENCY
ACCOUNTS
Type ofAccounts

All categories of resident
foreign exchange earners
can credit up to 100 per cent of
their foreign exchange earnings
to their EEFC Account with an
Authorised Dealer in India.
Funds held in EEFC account
can be utilised for all
permissible current account
transactions and also for
approved capital account
transactions
The account is maintained in the
form of a non-interest bearing
current account
EXCHANGE EARNERS FOREIGNCURRENCY
ACCOUNTS

 Inward remittance through normal banking channels, other than remittances received on account of foreign currency loan or
investment received from abroad or received for meeting specific obligations by the account holder;
 Payments received in foreign exchange by a 100 per cent Export Oriented Unit or a unit in
(a) Export Processing Zone or
(b) Software Technology Park or
(c) Electronic Hardware Technology Park for supply of goods to similar such units or to a unit in Domestic Tariff Area;
 Payments received in foreign exchange by a unit in the Domestic Tariff Area for supply of goods to a unit in the Special
Economic Zone (SEZ);
 Payment received by an exporter from an account maintained with an authorised dealer for the purpose of counter trade.
 Advance remittance received by an exporter towards export of goods or services;
 Professional earnings including directors fees, consultancy fees, lecture fees, honorarium and similar other earnings received by a
professional by rendering services in his individual capacity;
 Re-credit of unutilised foreign currency earlier withdrawn from the account;
 Amount representing repayment by the account holder's importer customer, of loan/advances granted, to the exporter holding
such account etc.
PERMISSIBLE CREDITS

 Payment outside India towards a permissible current account transaction [in accordance to the provisions of the Foreign
Exchange Management (Current Account Transactions) Rules, 2000]
 Permissible capital account transaction [in accordance to the Foreign Exchange Management (Permissible Capital Account
Transactions) Regulations, 2000].
 Payment in foreign exchange towards cost of goods purchased from a 100 percent Export Oriented Unit or a Unit in
(a) Export Processing Zone or
(b) Software Technology Park or
(c) Electronic Hardware Technology Park
 Payment of customs duty in accordance with the provisions of the Foreign Trade Policy of the Central Government for the time
being in force.
 Trade related loans/advances, extended by an exporter holding such account to his importer customer outside India, subject to
compliance with the Foreign Exchange Management (Borrowing and Lending in Foreign Exchange) Regulations, 2000.
PermissibleDebits

Current or Savings or
Term deposit accounts
A person resident in
India
Free from all
restrictions regarding
utilisation of foreign
currency
opened to keep
foreign currency
assets which were
held outside India at
the time of return
RFCAccount

Permissible credits :
The foreign exchange received as:
 pension of any other superannuation or other monetary benefits from the employer outside India;
 realised on conversion of the assets acquired, held or owned by such person when he was resident
in India or inherited from a person who was resident in India
 received or acquired as gift or inheritance from a person who was resident outside India
RFCACCOUNT

Permissible debits to the RFC account
 The funds in RFC account are free from all restrictions regarding utilization of foreign currency balances
including any restriction on investment outside India.
 Foreign securities can also be acquired from RFC account.
 The restriction of taking prior approval of government or prior approval of RBI is not applicable to
transactions undertaken out of RFC account *
*However, the prohibited transactions as specified in Rule 3 of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 cannot be undertaken at all.

Regulations 5A of Foreign
Exchange Management
(Foreign Currency
Accounts by a Person
Resident in India)
Regulations, 2000
Resident Individual may
open, hold and maintain
Current account
Does not bear any interest
No ceiling on the balances
in the account
RESIDENTFOREIGN CURRENCY(DOMESTIC)ACCOUNT

Permissible Credits
The account can be opened out of foreign exchange acquired in the form of currency notes, Bank notes and travellers cheques, from any of the sources like:
 payment for services rendered abroad;
 as honorarium, gift, services rendered;
 in settlement of any lawful obligation from any person not resident in India;
 proceeds of export of goods and/or services, royalty, honorarium, etc.;
 gifts received from close relatives (as defined in the Companies Act);
 disinvestment proceeds received by resident on conversion of shares to ADRs/GDRs
 proceeds of life insurance policy claims/maturity/ surrender values settled in foreign currency from an insurance company in India permitted to
undertake life insurance business by the Insurance Regulatory and Development Authority; may also be credited to this account.
Permissible Debits
• The account may be debited for payments made towards permissible current and capital account transactions. At the request of account holder, on change
of his status of resident to non resident the balance in his account can be credited to NRE/FCNR (B) account.
RESIDENTFOREIGN CURRENCY(DOMESTIC)ACCOUNT

Remittance
For Capital Account Transactions
Schedule I
Person resident In India
Schedule II
Person resident outside India
For Current Account Transactions
Schedule I
Prohibited
Schedule II
approval from the
GOI
Schedule III
Approval
from RBI
Liberalised Remittance Scheme
USD 250,000
per F.Y
Subsumes limits
under CAT
Permissible capital
Account transactions
Permissible
current a/c
transactions

REMITTANCES
Non Resident Indian
From the funds in NRE
account
Freely repatriable on
request
Transfer from NRO account
or Current Income subject
to applicable Taxes
From the funds in NRO
account
Under Certificate from CA
Form 15CA/15CB
Remittance limited to USD
1 million per financial year
RESIDENT
In General
As per FEM (Current
Account Transactions)
Rules,2000
Schedule III of CA Rules
specifies the limits of
remittance
Under Liberalised
remittance scheme
USD 2,50,000* per financial
Year (April – March)
LRS facility subsumes
limits specified in Sche III
of CA Rules
Foreign National
From the funds in NRO
account
Retiring from
employment/inheritance
Remittance limited to USD
1 million per financial year

61
Case Study 1- Change in Residential Status
• Mr. XG is an Indian Resident.
• In April 2019 he takes up employment in USA
• As on date, he maintains the following Bank Accounts / Deposits in Bank of Baroda
• The account is held jointly with his close relatives:
• Kindly advise Mr. Patel about action required by him upon change in his residential status
Amount
Type of Holding
Nature of Deposit
Rs. 20,00,000
First Name
Fixed Deposit
Rs. 50,00,000
First Name
Current Account
US $ 150,000
First Name
Account – RFC(D)
Rs. 45,00,000
Second Name
Savings Account
CA. Sudha G. Bhushan || Sudha@taxpertpro.com || 9769033172

62
Remarks
Action
Type of Holding
Nature of Deposit
Joint name with relative resident
on ‘former or survivor basis
permissible’
Designate as NRO
First Name
Fixed Deposit
Joint name with relative resident
permissible’
Designate as NRO
First Name
Current Account
Joint name with resident relative
permissible’
Can be credited to
NRE/FCNR(B)
First Name
Resident Foreign
Currency Account –
RFC(D)
As second holder, Joint names on
‘either or survivor basis
permissible’ - Notification No.
FEMA 5(R)/2016-RB dated April
01, 2016,
Second Name
Savings Account

63
• Mr. XG served in USA for 10 years
• Now he wants to return to India permanently.
• He currently operates following Bank Accounts / Deposits jointly with close relatives:
• Kindly advise Mr. XG about the actions required by him upon change in his residential status
Amount
Nature of Deposit
US $. 30,00,000
FCNR (B)
Rs. 280,00,000
NRE Fixed Deposit
Rs. 35,00,000
NRO Savings Account

64
• Mr. XG can take following actions
Action
Amount
Nature of Deposit
Can continue the deposit up to
maturity.
US $. 30,00,000
FCNR (B)
Convert into Ordinary Account/
RFC Account immediately
Rs. 280,00,000
NRE Fixed Deposit
Close immediately/Convert in to
Resident Account
Rs. 35,00,000
NRO Savings Account

65
Deposits from NRI / PIO
Deposit from NRI/PIO on repatriation basis:
An Indian company including NBFC registered with the Reserve Bank cannot accept fresh deposits on repatriation basis.
It can, however, renew the deposits it had accepted in accordance with the terms and conditions mentioned in Schedule 6
of the Foreign Exchange Management (Deposit) Regulations), 2016.
Deposit from NR towards Directorship:
Keeping deposits with an Indian company by persons resident outside India, in accordance with section 160 of the
Companies Act, 2013, is a current account (payment) transaction and, as such, does not require any approval from the
Reserve Bank. All refunds of such deposits, arising in the event of selection of the person as director or getting more than
twenty five percent votes, shall be treated similarly.

66
Deposits from NRI/PIOs on Non-repatriation basis
Deposit from NRI/PIO on non-repatriation basis:
Indian companies can also accept deposits from NRIs or PIOs by issue of a commercial paper subject to conditions.
Deposit from NRI/PIO on non-repatriation basis:
Indian companies can also accept deposits from NRIs or PIOs by issue of a commercial paper subject to conditions.
Deposit on non-repatriation basis
Particulars
Proprietorship concern, firm, Indian company (including NBFC)
Who can accept the deposit
Private arrangement or public deposit scheme
Mode
If NBFC, then credit rating is required
Credit rating
< 3 years
Maturity
As prescribed under Companies (Acceptance of Deposits) Rules, 2014 
12.5 %
Interest
Debit to NRO a/c only. Inward remittance and transfer from NRE/FCNR(B)
a/c prohibited.
Investment
Amount cannot be used for relending, carrying on agricultural/ plantation
activities or investment in real estate or investment in any other entity
engaged in above
End use restriction
Not allowed
Repatriability

ThankYou
Sudha Bhushan
+91 9769033172
sudha@taxpertpro.com
www.taxpertglobalsolutions.co.in

Presentation _ NRI_ 08th Dec 2023_ ICAIpdf

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