Even after returning to
India for permanent settlement, NRIs continue to enjoy many tax
concessions. Although, technically "Residents" but
in most cases being "Not Ordinarily Residents", returnee
NRIs continue to enjoy tax exemptions and tax concessions almost
at par with NRIs. They also enjoy the benefit of Dual Tax Treaty
where applicable.
NRI who return to India for good, should know various aspects of
Foreign Exchange Regulations (FEMA), Indian Taxation and Banking
Regulations in order to rearrange his financial affairs in India
and outside India.
A detailed information covering important
aspects for such arrangement is explained here.
FOREIGN EXCHANE MANAGEMENT ACT (FEMA)
A) OVERSEAS ASSETS
Foreign exchange / Overseas assets acquired,
held or owned by an NRI while he was abroad can be continued
to be so held and owned even after the NRI's return to India
for permanent settlement.
If required, such assets can be repatriated
to India.
B) INDIAN ASSETS
I. BANK ACCOUNTS. (In India)
Returning NRIs, upon his return to India, is required to redesignate
all his banking accounts as Resident Accounts.
Resident Foreign Currency Account (RFC Account)
II. SHARES , SECURITIES ETC (In India).
Returning NRI is required
to inform all the companies, funds etc. as regarding change of
status from Non-resident to Resident.
WEALTH TAX
Assets located outside India of Non-resident(NRI)
/Resident but Not Ordinary Resident(RNOR) are exempt from Wealth
Tax.
If NRI return to India with the intention
of permanently residing in India, the assets brought by him
and within one year after his return, will be exempt. This
exemption is available to NRI for a period of seven years after
his return to India. [sec. 5(1)(v)]
PIO CARDS
The Government has announced
a scheme for issuance of Persons of Indian Origin (PIO) Cards
for Persons of Indian Origin living abroad and having foreign
passports. The PIO cards, which would be extended to Persons
of Indian Origin settled in countries other than Pakistan, Bangladesh,
Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan besides
introducing a visa free regime, also confer some special economic,
educational, financial and cultural benefits to the holders of
these Cards.
The following facilities
shall be extended to the PIO Card holders:-
Visa free entry to India.
For PIO Card holders the requirement for
registration with Foreigners Regional Registration Office has
been done away with for continuous stay not exceeding 180 days.
