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FAQ on NRIs

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  (i)FAQs FOR NRIs ON DEPOSITORY ACCOUNTQ.1Who is a Non-Resident Indian NRI! Ans.Non- Resident Indian [NRI] means a ‘person resident outside India’ who is acitizen of India or is a ‘person of Indian srcin’. Q.#Who is a $%e&son &esident o'tside India Ans. Under the Foreign !change anagement Act# $%%% [F A]# a person who is N&' a ‘person resident in India’# as defined under (ection ) *+, of the Act isconsidered as a ‘person resident outside India’. 'he most important change indefinition [since FRA $%] is that the citizenship of a person no /onger has a 0earing in determination of residentia/ status. Q.Who is a $%e&son o* Indian o&i+in Ans.‘1erson of Indian &rigin’ *1I&, means a citizen of an2 countr2 other than3ang/adesh or 1a4istan# if a.he at an2 time he/d Indian passport5 or  0.he or either of his parents or an2 of his grandparents was a citizen of India 02+irtue of the 6onstitution of India or the 6itizenship Act# $%775 or c.the person is a spouse of an Indian citizen or a person referred to in su0-c/ause[a] or [0].In+estment 02 1I& in Indian (ecurities is treated the same as the in+estment 02non-resident Indians and re8uires same appro+a/s and en9o2s the samee!emptions. Q.,What is an $Oe&seas Co&%o&ate od/ OC! Ans.‘&+erseas 6orporate 3od2’ means a compan2# partnership firm# societ2 and other corporate 0od2 owned direct/2 or indirect/2 to the e!tent of at /east si!t2 percent 02 Non-Resident Indians and inc/udes o+erseas trust in which not /ess than si!t2 percent 0eneficia/ interest is he/d 02 Non-Resident Indians direct/2 or indirect/2 0ut irre+oca0/2.&63s were de0arred from 1ortfo/io In+estment (cheme w.e.f No+em0er )%#)::$. &63s ha+e 0een 0anned as a c/ass of in+estor w.e.f (eptem0er $;# )::.<owe+er# the2 ha+e 0een permitted to continue to ho/d the securities ac8uired 02them prior to these dates. According/2 &63s ma2 open a demat account# howe+er it can 0e on/2 for the purpose of demateria/izing the e!isting ho/dings. Q.0Whe&e an an NRI2PIO o%en a de3at ao'nt Ans.NRI=1I& can open a demat account with an2 >epositor2 1articipant [>1] of  N(>?. 'he NRI=1I& needs to mention the t2pe [‘NRI’ as compared to ‘Resident’]and the su0-t2pe [‘Repatria0/e’ or ‘Non-Repatria0/e’] in the account opening formco//ected from the >1. $  Q.4Does an NRI need an/ RI %e&3ission to o%en a de3at ao'nt Ans.No permission is re8uired from R3I to open a demat account. <owe+er# creditsand de0its from demat account ma2 re8uire genera/ or specific permissions as thecase ma2 0e# from designated authorised dea/ers. Q.5I* NRI2PIO desi&es to 3a6e inest3ents 'nde& di**e&ent she3es7 an he ho8da88 s'h se'&ities in a sin+8e de3at ao'nt Ans.No. (ecurities recei+ed against in+estments under ‘Foreign >irect In+estmentscheme *F>I,’# ‘1ortfo/io In+estment scheme *1I(,’ and ‘(cheme for In+estment’on non @ repatriation 0asis ha+e to 0e credited into separate demat accounts.In+estment under 1I( cou/d 0e on repatriation or non @ repatriation 0asis.In+estment under F>I scheme is on repatriation 0asis. Q.9Does an NRI &e:'i&e RI %e&3ission *o& de3ate&ia8iation2&e3ate&ia8isationo* se'&ities Ans .  No specia/ permission is re8uired. <o/ding securities in demat on/2 constituteschange in form and does not need an2 specia/ permission. <owe+er# on/2 those ph2sica/ securities which a/read2 ha+e the status as NR @ Repatria0/e = NR- Non-Repatria0/e can 0e demateria/ised in the corresponding >epositor2 Accounts. Q.;Can se'&ities %'&hased 'nde& &e%at&ia<8e and non-&e%at&ia<8e ate+o&/ <ehe8d in a sin+8e de3at ao'nt Ans.No. An NRI must open separate demat accounts for ho/ding ‘repatria0/e’ and non-repatria0/e’ securities. Q.1=In ase a %e&son >ho is &esident in India <eo3es a non-&esident7 >i88 he2she<e &e:'i&ed to han+e the stat's o* his2he& ho8din+ *&o3 Resident to Non-Resident Ans.As per section ;*7, of F A# NRI can continue to ho/d the securities whichhe=she had purchased as a resident Indian# e+en after he=she has 0ecome a nonresident Indian# on a non-repatria0/e 0asis. Q.11In ase a non-&esident Indian <eo3es a &esident in India7 >i88 he2she <e&e:'i&ed to han+e the stat's o* his2he& ho8din+ *&o3 Non-Resident toResident Ans.Bes. It is the responsi0i/it2 of the NRI to inform the change of status to thedesignated authorised dea/er 0ranch# through which the in+estor had made thein+estments in 1ortfo/io In+estment (cheme and the >1 with whom he=she hasopened the demat account. (u0se8uent/2# a new demat account in the residentstatus wi// ha+e to 0e opened# securities shou/d 0e transferred from the NRI demataccount to resident account and then c/ose the NRI demat account. )  Q.1#Can NRIs inest in sha&es7 de<ent'&es and 'nits o* 3't'a8 *'nds in India Ans.NRIs are permitted to ma4e direct in+estments in shares= de0entures of Indiancompanies= units of mutua/ fund. 'he2 are a/so permitted to ma4e portfo/ioin+estments i.e. purchase of share = de0entures of Indian 6ompanies through stoc4 e!change. 'hese faci/ities are granted 0oth on repatriation and non-repatriation 0asis. Q 1 Can an NRI %'&hase se'&ities </ s'<s&i<in+ to %'<8i iss'e What a&e the%e&3issions2a%%&oa8s &e:'i&ed Ans. Bes. 'he issuing compan2 is re8uired to issue shares to NRI on the 0asis of specific or genera/ permission from CoI=R3I. 'herefore# indi+idua/ NRI need noto0tain an2 permission. Q.1,Does an NRI &e:'i&e an/ %e&3ission to &eeie <on's2&i+hts sha&es Ans.No. Q.10What is Po&t*o8io Inest3ent She3e Ans.Under this scheme# NRIs are permitted to ac8uire shares=de0entures of Indiancompanies or units of domestic utua/ Funds through the stoc4 e!change*s, inIndia.In+estment can 0e made 0oth on repatriation or non-repatriation 0asis. For ma4ingin+estment on repatriation 0asis# it wi// 0e necessar2 to ma4e pa2ments 02 wa2 of inward remittance or 02 de0it to the NR = F6NR account of the NRI = 1I&.In+estment on non-repatriation 0asis can a/so 0e made 02 wa2 of inwardremittance or 02 de0it to the NR = F6NR = NR& accounts.'he sa/e proceeds of the repatria0/e in+estments can 0e credited to the NR = NR& accounts of the NRI = 1I& at the option of the in+estor# whereas the sa/e proceeds of non-repatria0/e in+estment can 0e credited on/2 to NR& accounts.'he sa/e of shares wi// 0e su09ect to pa2ment of app/ica0/e ta!es. Q.14What is the %&oed'&e *o& 3a6in+ a%%8iations *o& Po&t*o8io Inest3entShe3e  Ans. 'he app/ication is to 0e su0mitted to a designated 0ranch of an authorised dea/er in India in the prescri0ed form. No permission is re8uired from R3I. Q.15What is a desi+nated <&anh Ans.Reser+e 3an4 has authorised a few 0ranches of each authorised dea/er to conductthe 0usiness under 1ortfo/io In+estment (cheme on 0eha/f of NRIs. 'hese 0ranches are the main 0ranches of ma9or commercia/ 0an4s. NRIs wi// ha+e toroute their app/ications through an2 of the designated authorised dea/er 0rancheswho ha+e authorisation from Reser+e 3an4.  Q.19Whethe& NRI an a%%8/ th&o'+h 3o&e than one a'tho&ised dea8e&  Ans.  No. NRI can se/ect on/2 one authorised dea/er for the purpose of in+estment under 1ortfo/io In+estment (cheme and route the transactions through the 0ranchdesignated 02 the authorised dea/er. Q.1;Can an NRI %'&hase o& se88 sha&es o& one&ti<8e de<ent'&es on a sto6 e?han+e in India on &e%at&iation o& non-&e%at&iation <asis 'nde& %o&t*o8ioinest3ent she3e DAns.NRIs = 1I&s can purchase = se// shares = con+erti0/e de0entures of Indiancompanies on (toc4 !changes under the 1ortfo/io In+estment (cheme. 'he ru/esre/ating to this scheme are as gi+en 0e/owE*ii,(hares purchased under 1I( on (toc4 !change sha// 0e so/d on stoc4 e!changes on/2. 1rior appro+a/ of R3I is re8uired if such shares are proposed to 0e transferred either 02 wa2 of gift or under pri+atearrangement to a non-resident= resident. *iii,'hese trades can 0e done on/2 through a registered 0ro4er on a recognisedstoc4 e!change *i+,NRI sha// designate a 0ranch of an authorised dea/er and route a// his=her transactions through this 0ranch of the authorised dea/er.*+,NRI ta4es de/i+er2 of the shares purchased and gi+es de/i+er2 of sharesso/d.*+i,NRI sha// a0ide 02 the directions gi+en 02 R3I=(3I or such authorit2 if the transaction resu/ts in the 0reach of cei/ings stipu/ated for NRI ho/dingin the compan2=scheme.'he sa/e of shares wi// 0e su09ect to pa2ment of app/ica0/e ta!es.An NRI or a 1I& can purchase shares up to 7 of the paid up capita/ of an Indiancompan2. A// NRIs = 1I&s *a/so the &63s who had purchased shares under theear/ier scheme, ta4en together cannot purchase more than $: of the paid up+a/ue of the compan2. *'his /imit can 0e increased 02 an Indian compan2 to )G 02 passing a Cenera/ 3od2 reso/ution,. Q #= What a&e the %e&3issions &e:'i&ed *o& the t&ans*e& o* se'&ities </ NRI2 PIO th&o'+h o**-3a&6et t&ade (t&ans*e&s o'tside the %'&ie> o* Po&t*o8io Inest3ent She3e o* RI)  Ans. 'he ta0/e gi+en 0e/ow summarizes the permissions re8uired for the off-mar4ettransferE F&o3ToT&ansationPe&3issions Re:'i&ed  NRINRI(a/e or CiftCenera/ permission# no specific permission to 0e ta4enH NRIResidentCift1rior appro+a/ of R3I re8uired.G
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