Ans.: Under the Foreign Exchange Management Act, 1999, Non-resident Indians are:

1. Indian citizens who stay abroad for employment or carrying on business or vocation outside India or for any other purpose in circumstances indicating an uncertain period of stay abroad; OR,
2. Government servants who are posted abroad on duty with the Indian Mission and similar other agencies set up abroad by the Government of India where the officials draw their salaries out of Government resources; OR,
3. Government servants deputed abroad on assignments with foreign government or regional/international agencies like the World Health Organization (WHO), Economic and Social Commission for Asia and the Pacific (ESCAP); OR, 4. Official of the State Government and Public Sector Undertakings deputed abroad on temporary assignments or posted to their branches or offices abroad.

Ans.: Non Resident (Ordinary) Account

Ans.:An existing bank account of an Indian national going abroad and becoming a non-resident Indian is automatically designated as non-resident (ordinary) account (NRO). An NRI can also open such ordinary accounts even by making remittances from abroad or by transfer from an existing non-resident account in India in his own name. Such accounts can be opened by overseas corporate bodies (OCBs). NRO accounts can be opened while an NRI is on a visit to India or simply by making remittances from abroad. NRO account can be in the sole name of an NRI or in joint names of more than one NRI or in joint names with any of the close relatives in India. In other types of joint accounts, prior permission of Reserve Bank of India (RBI) is required.

Ans.:NRO account can be opened in the categories of current, savings, and recurring and term deposit accounts.

Ans.: Ans.: All types of transactions of deposits and withdrawals to and from NRO account are normally permitted. However, the RBI has prescribed certain transactions requires to be reported to RBI in prescribed forms.

Ans.:The funds can be freely withdrawn for the local disbursements without RBI approval. Interest is now repatriable.

Ans.: Interest on NRE account is not exempt from Income tax and balances to the credit of NRE account are not exempt from wealth tax.

Ans.: NRI as well as OCBs are permitted to open NRE accounts. NRE accounts can be opened by depositing foreign currency along with the account opening application form. The account opening form may be signed by NRI abroad and the signature of NRIs may be verified by a bank abroad or by Indian Embassy or by notary public official abroad. NRE account can be opened during the visit to India by tendering foreign currency travellers cheques or foreign currency notes.

Ans.: All types of account that is current, savings, recurring and term deposit can be opened under NRE accounts scheme. NRE accounts can be opened in single or joint name. However, in case or account opened in joint name, all the joint holders should be resident of external group of countries.

Ans.: As per the Liberalized Exchange Rate Management System (LERMS) all the remittances of foreign exchange to NRE accounts are converted into Indian rupee at the market rate of exchange and credits are given in terms of Indian rupees. Similarly, at the time of repatriation, the amount to be repatriated is converted into the designated foreign currency at the prevailing market rate of exchange. NRE Account offers all the facilities of the NRO account plus complete repatriation without informing the reserve bank.

Ans.: Interest on NRE account is exempt from Income tax and balances to the credit of NRE account are exempt from wealth tax.

Ans.: All non resident Indians, resident in external group of countries and OCBs are eligible to open FCNR accounts. FCNR accounts are permitted only in four currencies :

1. Pound Sterling (GBP)
2. US Dollar (USD)
3. Euro
4. Japanese Yen (JPY)

The rate of interest on the above account vary for each type of designated currency.