NRI Investment in Chennai Real Estate

Non-Resident Ordinary Rupee Account (NRO Account)

1. Type: Current, Savings, Recurring, or Fixed Deposit
2. Currency: Indian Rupees
3. Interest Rates: Determined by banks, not higher than domestic rupee deposits

Permissible Credits

1. Transfers from non-resident bank accounts
2. Remittances from outside India
3. Foreign currency tendered during temporary visits
4. Legitimate dues (rent, dividend, pension, interest)
5. Sale proceeds of assets (immovable property, legacy, inheritance)

Eligible Debits

1. Local payments in rupees
2. Investments (as specified by RBI)
3. Remittance of current income (rent, dividend, pension, interest) outside India
4. Net of applicable taxes

Other Features

1. Joint account holding with residents/non-resident Indians
2. Nomination facility available
3. Foreign nationals of non-Indian origin can open NRO accounts
4. Loans available against fixed deposits

Repatriation

1. Up to USD 1 million per financial year
2. Includes sale proceeds of immovable properties
3. Subject to payment of applicable taxes

Additional Information

1. NRO Savings accounts can be maintained with Post Offices in India
2. Individuals/ entities from Bangladesh and Pakistan require prior RBI approval

* Please note that these are general guidelines and may be subject to change. Consult with a bank or financial expert for personalized advice and the latest information.

Non-Resident External Rupee Account (NRE Account)

1. Account Types : NRE accounts can be opened as savings, current, recurring, or fixed deposit accounts.
2. Eligibility : Only NRIs can open NRE accounts, and they can do so with their resident close relatives on a "former or survivor" basis.
3. Repatriation : Balances held in NRE accounts are freely repatriable, meaning you can transfer funds back to your home country.
4. Tax Benefits : Interest earned on NRE accounts is exempt from income tax and wealth tax in India.
5. Interest Rates : Banks determine interest rates for NRE accounts, but they cannot be higher than those offered on comparable domestic rupee deposits.
6. Permissible Credits : NRE accounts can be credited with inward remittances, transfers from other NRE/FCNR accounts, and interest accrued on funds held in the account.
7. Eligible Debits : You can use your NRE account for local disbursements, transfers to other NRE/FCNR accounts, and investments in Indian shares and securities.
8. Loans : Loans can be taken against the security of funds held in an NRE account.
9. Power of Attorney : Residents can be authorized to operate the account on behalf of the NRI account holder.

Foreign Currency Non-Resident (Bank) Account – FCNR (B) Account

• FCNR (B) accounts are only in the form of term deposits of 1 to 5 years.
• All debits/credits permissible in respect of NRE accounts, including credit of sale proceeds of FDI investments, are permissible in FCNR (B) accounts also.
• The account can be in any freely convertible currency.
• Loans up to Rs.100 lakh can be extended against the security of funds held in FCNR (B) deposit either to the depositors or third parties.
• The interest rates are stipulated by the Department of Banking ASNtions and Development, Reserve Bank of India. In respect of FCNR (B) deposits of all maturities contracted effective from the close of business in India as of November 23, 2011, interest shall be paid within the ceiling rate of LIBOR/SWAP rates plus 125 basis points for the respective currency/corresponding maturities (as against LIBOR/SWAP rates plus 100 basis points effective from close of business on November 15, 2008). On floating rate deposits, interest shall be paid within the ceiling of SWAP rates for the respective currency/maturity plus 125 basis points. For floating rate deposits, the interest reset period shall be six months.
• When an account holder becomes a person resident in India, deposits may be allowed to continue till maturity at the contracted rate of interest, if so desired by him.
• Terms and conditions as applicable to NRE accounts in respect of joint accounts, repatriation of funds, opening account during temporary visit, ASNtion by power of attorney, loans/overdrafts against security of funds held in accounts, shall apply mutatis mutandis to FCNR (B). NRI can open a joint account with a resident close relative (relative as defined in Section 6 of the Companies Act, 1956) on a former or survivor basis. The resident close relative will be eligible to ASN the account as a Power of Attorney holder under extant instructions during the lifetime of the NRI/ PIO account holder.

Can Indians borrow money from relatives abroad?

Yes, Indian residents can borrow up to USD 250,000 (or equivalent) from close relatives living outside India, provided:

1. Loan maturity: 1 year minimum
2. Interest-free loan
3. Funds received via
   • Inward remittance (free foreign exchange)
   • Debit from NRE/FCNR(B) account of the NRI

* Close relatives include parents, siblings, spouse, and children

Can Indians lend money to NRI/PIO relatives?

Yes, Indian residents can lend money to close NRI/PIO relatives within these limits:

1. Maximum: USD 200,000 per financial year
2. Transfer methods: Crossed cheque or electronic transfer
3. Purpose: Personal or business needs in India
4. Conditions
   • Interest-free loan
   • Minimum maturity: 1 year
   • Loan cannot be remitted outside India

Eligible close relatives include

1. Parents
2. Siblings
3. Spouse
4. Children

Can I repay my NRI relative's loan in India?

Yes, you can! If an Indian bank has lent money to your close NRI relative, you (as a resident close relative) can repay the loan on their behalf.Here's how:

1. Ensure the loan was granted by an authorized dealer in India.
2. Repay the loan by transferring funds from your bank account.
3. Credit the amount directly into your NRI relative's loan account.

What are the other facilities available to NRIs/PIOs?

Yes, you can! If an Indian bank has lent money to your close NRI relative, you (as a resident close relative) can repay the loan on their behalf. Here's how:

1. Investment Facilities
   NRIs can invest without limits on a repatriation basis in government securities, domestic mutual funds, public sector bonds, and more, following specific guidelines. They can also invest on a non-repatriation basis in similar assets, including national savings certificates and exchange-traded derivatives. However, investments in small savings or PPF are not allowed.
2. Immovable Property
   NRIs/PIOs can purchase immovable property (excluding agricultural land, farmhouses, or plantations) using repatriable or non-repatriable funds. Properties can be acquired through purchase, gift, or inheritance, and they can transfer these to residents of India or certain eligible individuals outside India. NRIs can repatriate sale proceeds of properties, with restrictions on agricultural land and farmhouses. Repatriation limits apply based on the source of funds used for the original purchase.
3. Returning NRIs/PIOs
   Returning NRIs/PIOs can continue to own and manage foreign assets without repatriation obligations. They can open Resident Foreign Currency (RFC) accounts to hold foreign assets and freely use the funds without restrictions. Additionally, they can maintain foreign currency accounts during stays abroad for studies or exhibitions and repatriate the balances after their return. These facilities provide flexibility for NRIs/PIOs in managing their investments and assets, both in India and abroad.