NRI CORNER

A. The definition of 'Person of Indian Origin' is defined under section 2 (b) of Foreign Exchange Management (borrowing and lending in rupees) Regulations, 2000 and under section 2 (xii) of Foreign Exchange Management (Deposit) Regulations, 2000 as given under:-

"Person of Indian Origin' means a citizen of any country other than Bangladesh or Pakistan, if He at any time held an Indian passport; or

He or either of his parents or any of his grandparents was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955); or

The person is a spouse of an Indian citizen or a person referred to in sub-clause (a) or (b)"

Person of Indian Origin (PIO) for the purpose of acquiring immovable property in India as given under:-

"Person of Indian origin' means an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

At any time, held an Indian passport; or

Who or either of whose father or mother or whose grandfather or grandmother was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955)"

A. NRIs/OCB's are granted the following facilities:

Maintenance of bank accounts in India

Investments in securities/shares of, and deposits with, Indian firms/companies

Investments in immovable properties in India

A. Under the general permission available, the following categories can freely purchase immovable property in India:

Non-Resident Indian (NRI) - that is a citizen of India resident outside India

Person of Indian Origin (PIO) - that is an individual (not being a citizen of Pakistan or Bangladesh or Sri Lanka or Afghanistan or China or Iran or Nepal or Bhutan), who

At any time, held Indian passport, or

Who or either of whose father or grandfather was a citizen of India by virtue of the Constitution of India or the Citizenship Act, 1955 (57 of 1955).

The general permission, however, covers only purchase of residential and commercial property.

A. YES

A. Yes, the Reserve Bank has granted general permission to NRIs to acquire or dispose of NRI India Properties by way of gift from or to a relative who may be an Indian citizen or a person of Indian origin (PIO) whether resident in India or not.

A. Yes, under the general permission granted by the Reserve Bank, property other than agricultural land/farm house/plantation property can be acquired by NRIs provided the purchase consideration is met either out of inward remittances in foreign exchange through normal banking channels or out of funds from the purchaser's NRE/FCNR accounts maintained with banks in India and a declaration is submitted to the Central Office of Reserve Bank in form IPI 7 within a period of 90 days from the date of purchase of the property/final payment of purchase consideration.

A. The Reserve Bank has granted some general permission to certain financial institutions providing housing finance e.g. HDFC, LIC Housing Finance Ltd., etc, and authorized dealers to grant housing loans to NRI nationals for acquisition of a NRI house/flat for self-occupation subject to certain conditions. Criteria regarding the purpose of the loan, margin money and the quantum of loan will be at par with those applicable to resident Indians. Repayment of the loan should be made within a period not exceeding 15 years, out of inward remittance through banking channels or out of funds held in the investors' NRE/FCNR/NRO accounts.

A. A Power Of Attorney (POA) or letter of attorney is a written authorization to represent or act on another's behalf in private affairs, business, or some other legal matter, sometimes against the wishes of the other. The person authorizing the other to act is the principal, grantor, or donor (of the power). A Power Of Attorney is not an instrument of transfer in regard to any right, title or interest in an immovable property.

A Power Of Attorney, or letter of attorney, is a document that authorizes another person, known as the agent or attorney-in-fact-usually a legally competent relative or close friend over 18 years old-to handle any combination of financial, legal and health care decisions. A power of attorney is also referred to as a POA. Generally, one chooses a POA as a provision if he or she becomes incapacitated.

Types of Power of Attorney

Power Of Attorney (POA) is an instrument that is used by people to confer authority on somebody else to legally act on their behalf. POA are of two types.

Special Power of Attorney (SPA), while an SPA is used for transfer of a specific right to the person on whom it is conferred.

General Power of Attorney (GPA), the GPA authorizes the holder to do whatever is necessary.

There is no sale clause of immovable property mentioned in POA (notarized)

Registered POA from registration office allows sale clause and POA to any one

Following are the important things to be kept in mind while executing the POA:

Customer Prepares POA as per defined format.

Person to execute has to paste his/her photograph along with signature on each page.

Authenticate/adjudicate the POA from Indian Embassy or local authority.

Send authenticated/adjudicated POA in India.

In India, the POA holder has to paste his/her photograph along with his/her left hand thumb impression and signature.

Then this document will have to be stamped for Rs. 500/- (ESBTR, Franking, Stamp paper) and notarized from a Registered Notary. Please ensure that a stamp of "Before Me" is affixed on the document.

POA holder and executants Photo ID attach before Notary

A. He documentation required to be submitted by the NRIs are different from the Resident Indians as they are required to submit additional documents, like copy of the passport and a copy of the works contract, etc. and of course NRIs have to follow certain eligibility criteria in order to get Home Loans in India.

Another vital document required while processing an NRI home loan is the power of attorney (POA). The POA is important because, since the borrower is not based in India; the Home Finance Company would need a 'representative' 'in lieu of' the NRI to deal with and if needed. Although not obligatory, the POA is usually drawn on the NRI's parents/wife/children/ close relatives or friends.

The documents needed for obtaining NRI home loans are Bank specific. General list of documents are as mentioned below:

Passport and Visa

A copy of the appointment letter and contract from the company employing the applicant.

The labour card/identity card (translated in English and countersigned by the consulate) if the person is employed in the Middle East Salary certificate (in English) specifying name, date of joining, designation and salary details.

Bank Statements for the last six months

List of Classified documents for Salaried and Self Employed NRI Applicants. Banks may have specific requirements apart from the below listed documents under respective headings in the Table

A. Yes. Long-term and short-term capital gains are taxable in the hands of non-residents.

A. Type of asset: Assets like house property, land and building, jewellery, development rights etc. Rate of tax deduction at source (TDS)

Long term - 20.6%

Short term - 30.9%

Exemption available (only for long term capital gains) The long term capital gains arising on sale of a residential house can be invested in buying/ constructing another residential house, within the prescribed time. The exemption is restricted to the amount of capital gains or amount invested in new residential house, whichever is lower. If the amount of capital gains is invested in bonds of National Highways Authority of India

(NHAI) or Rural Electrification Corporation, then the entire capital gains is exempted, else the proportionate gain is exempted. As per the financial budget 2007-08, a cap of Rs. 50 lakhs has been imposed on investment that can be made in capital tax saving bonds

A. In case the non-resident pays any tax on capital gains arising in India, he would normally be able to obtain a tax credit in respect of the taxes paid in India in the home country, because the income in India would also be included in the country of tax residence. The amount of the tax credit as also the basis of computing the tax credit that can be claimed are specified in the respective country's DTAA and is also dependent on the laws of the home country where the tax payer is a tax resident.

A. (a) If the property was acquired out of foreign exchange sources i.e. remitted through normal banking channels/by debit to NRE/FCNR(B) account, the amount to be repatriated should not exceed the amount paid for the property:

1. In foreign exchange received through normal banking channel or

2. By debit to NRE account (foreign currency equivalent, as on the date of payment) or debit to FCNR(B) account.

Repatriation of sale proceeds of residential property purchased by NRI's/PIO's out of foreign exchange is restricted to not more than two such properties. Capital gains, if any, may be credited to the NRO account from where the NRI's/PIO's may repatriate an account up to USD one million, per financial year, as discussed below

(b)If the property was acquired out of Rupee sources, NRI/PIO may remit an amount up to USD one million, per financial year, out of the balances held in the NRO account (inclusive of sale proceeds of assets acquired by way of inheritance or settlement), for all the bonafide purposes to the satisfaction of the Authorized Dealer bank and subject to tax compliance.

The NRI/PIO may use this facility to remit capital gains, where the acquisition of the subject property was made by funds sourced by remittance through normal banking channels/by debit to NRE/FCNR(B) account.