REGULATIONS FOR NR ACCOUNTS

Non Resident (NR)

The term NR has not been defined in Foreign exchange regulations and taxation rules in various countries. Viz. An NRI is a person resident outside India who is a citizen of India and goes outside country for definite/indefinite period for occupation.

Person of Indian Origin (PIO)

A PIO has been broadly defined as a citizen of any country if: at anytime he has held an Indian passport; or If he or either of his parents or grand parents was a citizen of India by virtue of Constitution of India of the Citizenship Act 1955; or the person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b) above.

Cont.
Deposits & Investment Opportunities: NRs can open deposit account , investment & any business in their home country. Neither is there any specific bar under Company Law nor are they accorded any preferential treatment over other foreign and Indian Citizens. Issues Relating to Borrowing & Lending: The Issues and Limitations relating to borrowings and Lending has been regulated by Foreign Exchange Management of the country.

Accruing Income Tax Benefits

Income Tax Act in most of the countries exempting the entire income from specified housing projects from income tax invites FDI and NRIs to rush to India. It exempts an industrial undertaking's entire income from developing and building approved housing projects in which the housing project is approved by the local authority; and the project is on a plot of land admeasuring at least one acre. Further, the conditions relating to the time limit for completion of the project and minimum size of plot are also waived in respect of the housing project carried out in accordance with the notified scheme framed by the Central or State Government for reconstruction or redevelopment of existing buildings in areas declared to be slum areas

 Whats an NRE account? A Non-Resident External (NRE) account is a bank account thats opened by depositing foreign currency at the time of opening a bank account. This currency can be tendered in the form of travelers checks or notes.

Whats an NRO account? A Non-Resident Ordinary (NRO) account is the normal bank account opened by an Indian going abroad with the intention of becoming an NRI. An NRI can also open this account by sending remittances from his home country or by transferring funds from his other NRO account. It offers the same facilities as an NRE account, except that any repatriation done through this account should be reported to RBI by filling up prescribed forms.