RIGHTS OF AN NRI

INTRODUCTION

A Non-Resident Indian (NRI) is a person living outside of India but is a national of India and meets one or more of the following criteria:

1. For the purpose of finding work outside of India.
2. For the purpose of conducting a business or a profession outside of India.
3. For any reason, in situations that would imply his intention to remain outside India for an indefinite period of time.

A non-resident for income tax purposes is someone who lived outside of India for much more than 182 days in the previous fiscal year.

According to India’s Foreign Exchange Management Act 1999 (FEMA), a Non-Resident Indian (NRI) is an Indian citizen or a Foreign National of Indian Origin who lives outside India for job opportunities, business, or vocation in circumstances that imply an undefined stay. A person is also regarded as an NRI if he spent just under 182 days in India during the previous fiscal year.

According to the Income Tax Act, 1961, an NRI is an individual who does not live in India. If an individual is in India for a time frame of 182 days or more during the preceding year, or if an individual is in India for a period of 60 days or more during the preceding year and 365 days or more during the four years that followed the previous year, they are considered a resident of India.

VARIOUS RIGHTS OF AN NRI

NRIs are citizens of India. With a few exclusions, they enjoy the same perks as all Indian citizens. They are granted all of the Constitution’s Fundamental Rights the same way that ordinary citizens are. They have voting privileges, the ability to run for office, and access to all of the Constitution’s Fundamental Rights, among other things. They are exempt from paying income tax earned overseas as long as it is charged properly in the country where it was earned. They have a restriction that prevents them from purchasing farmland or a farmhouse unless they obtain RBI approval. They need not require a visa or a permit to come into the country, and they are obligated to the same legal protection as any other citizen.

An NRI may open a bank account in India with an Authorised Dealer using finances transferred from overseas, foreign exchange ushered through from overseas, or funds owed to them legally in India. These accounts can be opened at banks that have been specifically authorized by the Reserve Bank of India (RBI) to do so. An NRI can have various accounts with different banks in India at the same time. An NRI can access a zero-balance account but must remit funds to make the account operational within a reasonable amount of time, upon which only a cheque book will be authorized. Non-resident Indians (NRIs) are restricted from opening bank accounts in Indian banks. Overall, a non-resident Indian can open the following accounts:

1. INDIAN RUPEES IN NON-RESIDENT EXTERNAL ACCOUNT (NRE) AND/OR NON-RESIDENT ORDINARY ACCOUNT (NRO) (INR).

NRIs are allowed to open rupee-denominated NRE accounts. Savings, current, recurring, and fixed deposit accounts are all available. Remittances in free foreign exchange can be used to open accounts. Foreign currency is brought in lawfully, and the account holder’s gross basis earnings can all be credited to the account.

2. FOREIGN CURRENCY NON-RESIDENT (FCNR) IN FOREIGN CURRENCY.

In addition to the current stipulation of sustaining FCNR (B) Accounts in US dollars, Japanese Yen, Sterling Pounds, and Euro, an NRI can now open FCNR (B) Accounts in Canadian and Australian dollars. The account can only be initiated as a term deposit for one of three maturity periods: (a) one year and up but a little less than two years, (ii) two years and up but less than three years, and (iii) three years and up but less than three years. In the hands of NRIs, capital gains are tax-free until they retain non-resident status or resident but just not normally resident status under Indian tax laws. 

3. ORDINARY NON-RESIDENT RUPEE ACCOUNTS (NRO ACCOUNTS)

Non-repatriable accounts in rupees can be savings, current, recurring, or fixed deposits. Such accounts can be opened in collaboration with Indian residents. Whenever an Indian National/PIO citizen in India leaves for work, study, or other reasons outside of India, except in Nepal or Bhutan, his bank account in India is labelled as an NRO account.

Any immovable property throughout India, if either residential or industrial, can be inherited by a non-resident Indian (NRI) or an individual of Indian origin (PIO). They could even acquire farmland or a farmhouse that they would not otherwise have obtained through payment. Someone, including family members, can leave the estate to an NRI. In certain circumstances, an NRI or PIO can inherit property in India out of another NRI or PIO. If the heritage is in the hands of a resident of a foreign nation who lives outside India, the RBI must approve it.

It’s indeed worth noting that perhaps the individual from which the NRI inherits the estate must have obtained the estate in compliance with the provisions of the law governing foreign exchange in force at the time. As a result, if the ownership of the property was obtained without gaining approval from the Reserve Bank of India when authorization was needed, the NRI or PIO cannot inherit the estate without the RBI’s explicit consent.