If you live and work abroad, receiving and remitting money back home could be tricky. Hence, to prevent money laundering, foreign exchange outflow, etc., the Government of India (GOI) introduced a set of rules in place.
Such rules that come under the Foreign Exchange Management Act (FEMA), 1999, empower the RBI to pass regulations and enables the Government of India to pass rules associated with foreign exchange in tune with the foreign trade policy in India.
Before remitting funds anywhere in India, be aware of the below regulations.
Aiming at encouraging and promoting the development and maintenance of the Indian foreign exchange market, the GOI introduced FEMA in 1999. As it controls the flow of currency across Indian borders, NRIs must abide by the law to remit money to their domestic land.
Bank Accounts Management
Once you move overseas, you will need bank accounts that enable you for financial transactions in India. In this case, you can seek the help of a trusted banking partner to help deal with overseas transactions. You can open an NRI bank account or convert your savings account. You are eligible to open three types of NRI bank accounts.
- NRE accounts which permit transferring money from outside India is repatriable back to the country of residence of the NRI and doesn’t impose taxes on the income earned outside India.
- NRO account is suitable for remitting money outside India, but the remitted funds are non-repatriable to another country.
- FCNR account allows NRIs to deposit any tax-free foreign currency and is available for FDs between 1 and 5 years.
Financial Investments
As an NRI, you have innumerous options to invest in India through repatriable and non-repatriable transactions. However, you cannot invest in Public Provident Fund (PPF) schemes or small saving schemes that provide good returns and tax benefits.
Ownership and Transfer of Immovable Properties
NRIs and PIOs are eligible to purchase any commercial and residential real estate property in India, except agricultural land or farmhouse. However, they are allowed to receive immovable property through inheritance from relatives.
