Passport Information
New Passports (After expiry of normal validity of 10 years):
EAP-I Form + 3 recent
photographs (colour or black & white) frontal view.
The applicant should
present old passport. Additional Booklet alone is not acceptable
while applying for new passport.
Name, father’s name, place
and date of birth and signatures should tally.
Individual should come
personally.
If passport expired for
more than six months, Sworn Affidavit for late submission to be
submitted.
New Passport for Children:
A) When entered in parent’s passport:
EAP-I Form + Passport in
which child’s name is entered.
If there is a change in
the name to be effected, Sworn Affidavit is to be taken
(If child is minor from the parent).
B) When not entered in Parent’s Passport( For New Born child):
EAP I form with three
recent photographs
Registration Certificate
Application form<\li>
Copy of original Birth
Certificate duly attested by Ministry of Foreign Affairs.
Both Parents original
Passports along with Photocopy.
Additional Booklet:
EAP-II Form +3 Photographs
+ Original Passport.
New Passport in married name:
If the husbands name is
not endorsed in the passport, EAP-I Form + Marriage Certificate OR
If Marriage Certificate is not there - both have to give Sworn
Affidavit.
If Marriage Certificate
issued by Marriage Registrar, no Sworn Affidavit is required.
Passport in Maiden name from married name:
EAP-I Form + Divorce
Certificate + Sworn Affidavit (if the marriage is performed in
India, divorce certificate from Indian Court and should be attested
by concerned State Home Department).
Passport in new name due to change of religion:
Due to change of religion passport can be issued in new name for
which requirements are EAP I form + advertisement in one Indian and
one Local newspaper in original + Deed Poll (Sworn Affidavit).
Passport in new name (General):
EAP I form + 3 photographs
Advertisement in one
Indian and one Local newspaper in original
Deed Poll (Sworn
Affidavit).
Change of Photo :
(Children): Of age up to 18 years - EAP I form + 3 recent
photographs
Passports (Extension of Validity):
EAP-II form with one
recent photograph pasted on the form.
If the renewal is done
after six months of the expiry of the passport, a Sworn Affidavit
affirming his national status as also the explanation for delay
should be given.
Passports, which fall within six months of expiry, a simple, letter
giving the reasons for delay to be given.
House Maid:
EAP-II form with one
recent photograph.
Applicant has to come
personally
Passport is renewed for a period of one year only.
Ladies married to Foreign Nationals:
EAP-II form with one
recent photograph.
Applicant has to come
personally
Passport is renewed for a period of two years only.
Reference cases for renewal:
EAP-II form with one
recent photograph.
No passport fee
Remaining validity is given to the passports issued by other
Passport offices/Missions, only after receipt of confirmation.
Miscellaneous Services:
- Deletion of Profession :
EAP-II form with one recent photograph
- Change of Address: EAP
II form with one recent photograph Service is rendered after
reference is made to the original Passport issuing Authority in
India and After receipt of confirmation.
- Detachment of passports:
EAP II form with one recent photograph
- Emigration Clearance Not
Required:
- Emigration Check Not
Required application with original passport
- Individual should be
staying abroad for more than 3 years excluding short stays to
India.
- Persons holding
Diploma/Graduation or higher degrees (degrees should be attested
by the Ministry of Human Resources Development, New Delhi and
Ministry of External Affairs, New Delhi)
- On the basis of ECNR
Status of the spouse (original Passport of spouse to be
submitted along with application)
- Dependent children of
parents eligible for ECNR (up to 24 years of age) [Original
passport of parent to be submitted along with application with
photocopy)
- All the persons above
the age of 60
- Birth Certificate (On
the basis of Passport): EAP II form with recent photograph along
with original passport
- Correction in Date of
Birth: Date of Birth already endorsed on a passport can be
corrected only on the basis of declaratory Orders of First Class
Judicial Magistrate in India instructing the Consulate for
correction of the Date of Birth. The order in original has to be
produced.
- Police Clearance
Certificate:
- EAP II form with recent
photograph PCCs for the period of stay in India are issued only
after confirmation from the concerned Passport Issuing Authorities
or after a waiting period of 45 days.
Loss
of Passports:
EAP I form along with
three photocopies (with original photographs pasted on each form ) +
additional 3 recent photographs.
Additional Details forms(
original + six copies =total seven) with seven photographs.
Sponsors letter in
original (on letterhead)
Letter from applicant
Two days advertisement in
the Local English Daily Newspaper in original (Full page)
Police report in original
(If in Arabic, English Translation) + copy
Two Sworn Affidavits (one
for Nationality and other for status of the old passport) Both in
Duplicate.
Photocopy of the old
passport (s) reported lost along with visa status<\ul>
Duplicate Passports are issued only after receipt of confirmation
from the original Passport Issuing Authority in India/Abroad.
When is Emigration Check Not Required (ECNR) Following persons are
entitled to get the ECNR stamp on their passports:
Persons staying abroad for
more than three years from the date of entry (period of short visits
to India to be excluded)
Persons holding
Diploma/Graduation or higher degrees(Degrees should be attested by
the Ministry of Human Resources Development, New Delhi, and Ministry
of External Affairs, New Delhi)
On the basis of ECNR
Status of the Spouse (original passport of spouse to be submitted
alongwith application)
Dependent children of
parents eligible for ECNR(upto 24 years of age) - [Original passport
of the parent to be submitted alongwith application]
All the persons above the
age of 60 years.
A child already endorsed on his/her parent’s passport can travel
with the parents. However, the child’s passport has to be separated
and a new passport made as and when the concerned parent’s passport
is submitted for any service.
Government/Reserve
Bank: Rules for NRIs
The Reserve Bank of India, the country's central bank, used to issue
a guide for Non-Resident Indians. However, the economic reforms
programme has resulted in the liberalisation of these laws. The
Foreign Exchange Regulation Act (Fera), which was the main law
concerning foreign exchange transactions, has been scrapped and
replaced by the Foreign Exchange Management Act (Fema).
Fema has simplified things, both for NRIs and resident Indians. It
has done away with several complex rules and regulations, and has
sharply reduced the number of approvals/clearances needed by NRIs,
OCBs, foreign investors and businessmen.
For NRIs who interact a lot with institutions in India, including
banks, mutual funds, stock markets, housing finance companies, etc.,
the paperwork has been slashed. The rules and regulations are
clear-cut, framed to make things easy. We highlight some of the
major features of the Fema especially those concerning NRIs. We have
presented the text in a question-and-answer format. The answers form
part of the official RBI notifications.
Bank Accounts, Deposits, Loans
Who is a Non-Resident Indian?
Non-Resident Indian (NRI) means a person resident outside India who
is a citizen of India or is a person of Indian origin.
Who is a person of Indian origin?
Person of Indian origin means a citizen of any country other than
Bangladesh or Pakistan, if:
(a) he at any time held Indian passport; or
(b) 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
(c) the person is a spouse of an Indian citizen or a person referred
to in sub-clause (a) or (b).
What is an OCB?
Overseas Corporate Body (OCB) means a company, partnership firm,
society and other corporate body owned directly or indirectly to the
extent of atleast 60 percent by NRIs and includes overseas trust in
which not less than 60 percent beneficial interest is held by NRIs
directly or indirectly but irrevocably.
What are the deposits that an authorised dealer/authorised bank
can accept from persons resident outside India?
An authorised dealer in India may accept deposit
(i) under the non-resident (external) account scheme (NRE account),
specified in schedule 1, from an NRI or an OCB;
(ii) under the Foreign Currency (Non-resident) account banks scheme
(FCNR-B account), specified in schedule 2, from an NRI or an OCB;
(iii) under the Non-Resident (Ordinary) account scheme (NRO
account), specified in schedule 3, from any person resident outside
India;
(iv) under the Non-Resident (Non-Repatriable) Rupee Account scheme,
(NRNR Account), specified in schedule 4, from any person resident
outside India;
(v) under the Non-Resident (Special) Rupee Account Scheme (NRSR
account), specified in schedule 5, from an NRI.
Without prejudice to sub-regulation (1), deposits under the NRE, NRO
and NRSR account schemes referred to in clauses (i), (iii) and (v)
of that sub-regulation, may also be accepted by an authorised bank,
in accordance with the provisions contained in the respective
schedules.
What are the deposits that persons other than authorised dealer/authorised
bank can accept?
(1) A company registered under the Companies Act, 1956, or a body
corporate or created under an act of Parliament or State Legislature
may accept deposits from an NRI on repatriation basis, subject to
the terms and conditions mentioned in schedule 6.
(2) An Indian company, a proprietorship concern or a firm in India
may accept deposits from an NRI on non-repatriation basis, subject
to the terms and conditions mentioned in schedule 7.
Is nomination facility available for these accounts?
Authorised dealers may provide nomination facility in respect of the
following deposit accounts; accounts maintained by individual
account holders under the NRE, FCNR(B), NRO, NRNR AND NRSR account
schemes.
What are the types of accounts allowed under the Non-Resident
(External) Rupee account scheme? The accounts may be maintained in
any form, e.g. savings, current, recurring or fixed deposit account,
etc.
What are the permitted credits under this account?
(a) Proceed of remittances to India in any permitted currency.
(b) Proceeds of personal cheques drawn by the account holder
on his foreign currency account and of travellers cheques, bank
drafts payable in any permitted currency including instruments
expressed in Indian rupees for which reimbursement will be received
in foreign currency, deposited by the account holder in person
during his temporary visit to India, provided the authorised
dealer/bank is satisfied that the account holder is still resident
outside India, the travellers' cheques/drafts are standing/endorsed
in the name of the account holder and in the case of travellers'
cheques they were issued outside India.
(c) proceeds of foreign currency/bank notes tendered by account
holder during his temporary visit to India, provided
(i) the amount was declared on a currency declaration form, where
applicable, and (ii) the notes are tendered to the authorised dealer
in person by the account holder himself and the authorised dealer is
satisfied with that account.
(d) Transfers from NRE/FCNR accounts.
(e) Interest accruing on the funds held in the account.
(f) Interest and dividend on units of mutual funds, provided the
securities/units were purchased by debit to the account holder's NRE/FCNR
account or out of inward remittance through normal banking channels.
(g) Maturity proceeds of government securities including National
Plan/Savings Certificates as well as proceeds of government
securities and units of mutual funds sold on a recognised stock
exchange in India and sale proceeds of units received from the
account holder's NRE/FCNR account or out of remittances received
from outside India in free foreign exchange.
(h) Refund of share/debenture subscriptions to new issues of Indian
companies or portion thereof, if the amount of subscription was paid
from the same account holder or by remittance from outside India
through normal banking channel.
(i) Refund of application/earnest money made by the house building
agencies on account of non-allotment of flat/plot, together with
interest, if any (net of income tax payable thereon), provided the
original payment was made out of NRE/FCNR account of the account
holder or remittance from outside India through normal banking
channels and the authorised dealer is satisfied about the
genuineness of the transaction.
(j) Any other credit if covered under general or special permission
granted by Reserve Bank.
What are the permitted debits?
(a) Local disbursements.
(b) Remittances outside India.
(c) Transfer to NRE/FCNR accounts of the account holder or any
other person eligible to maintain such account.
(d) Investment in shares/securities/commercial paper of an Indian
company or for purchase of immovable property in India provided such
investment/purchase is covered by the regulations made, or the
general/special permission granted, by the Reserve Bank.
(e) Any other transaction if covered under general or special
permission granted by the Reserve Bank.
Are loans available against security of funds held in the
account?
(a) To account holder:
Authorised dealers and banks maintaining such accounts are permitted
to grant loans in India to the account holder for -
i) personal purposes or for carrying on business activities except
for the purpose of re-lending or carrying on agricultural/plantation
activities or for investment in real estate business. The authorised
dealer/bank should ensure that the advances are fully secured by the
fixed deposits and regulations relating to normal margin, interest
rate, etc., are complied with. Repayment shall be made either by
adjustment of the deposit or by fresh inward remittances from
outside India through normal banking channels.
The loan can also be repaid out of local rupee resources in the NRO
account of the borrower. The interest on such loans shall be in
accordance with directives issued by Reserve Bank from time to time;
ii) the purpose of making direct investment in India on
non-repatriation basis by way of contribution to the capital of
Indian firms/companies subject to compliance with the provisions of
the Foreign Exchange Management (Transfer of Indian security by a
person resident outside India) Regulations, 2000 and Foreign
Exchange Management (Investment in proprietary or a partnership
firm) Regulations, 2000, iii) the purpose of acquisition of
flat/house in India for his own residential use subject to the
provisions of the relevant Regulations made under the Act.
(b) To third parties:
Authorised dealers and banks may grant any type of fund based and/or
non-fund based facilities to resident individuals/ firms/companies
in India against the collateral of fixed deposits held in NRE
account subject to the following conditions:
i)There should be no direct or indirect foreign exchange
consideration for the non-resident depositor agreeing to pledge his
deposits to enable the resident individual/firm/ company to obtain
such facilities. ii) Regulations relating to margin, interest rate,
purpose of loan, etc. as stipulated by Reserve Bank from time to
time should be complied with.
iii) The loan should be utilised for personal purposes or for
carrying on business activities other than agricultural/plantation
activities or real estate business. The loan should not be utilised
for re-lending. iv) The usual norms and considerations as applicable
in the case of advances to trade/industry shall be applicable to
such credit facilities.(c) Loans outside India
Authorised dealers may allow their branches/correspondents outside
India to grant any type of fund based and/or non-fund based
facilities to or in favour of non-resident depositor or to third
parties at the request of depositor for bona fide purpose against
the security of funds held in the NRE accounts in India and also
agree to remittance of the funds from India, if necessary, for
liquidation of the outstandings.
What happens when there is a change of resident status of the
account holder?
NRE accounts should be re-designated as resident accounts or the
funds held in these accounts may be transferred to the RFC accounts
(if the account holder is eligible for maintaining RFC account) at
the option of the account holder immediately upon the return of the
account holder to India for taking up employment or for carrying on
business or vocation or for any other purpose indicating intention
to stay in India for an uncertain period. Where the account holder
is only on a short visit to India, the account may continue to be
treated as NRE account even during his stay in India.
What are the designated currencies for FCNR(B) scheme accounts?
Deposit of funds in the accounts may be accepted in Pound Sterling,
US Dollar, Deutsche Mark, Japanese Yen, Euro and such other
currencies as may be designated by Reserve Bank from time to time.
What are the types of accounts under this scheme?
These accounts may be opened only in the form of term deposit for
any of the three maturity periods, viz. one year and above but less
than two years, two years and above but less than three years and
three years only.
What are the permissible debits/credits?
All debits/credits permissible in respect of NRE accounts as
specified in Schedule I shall be permissible in respect of these
accounts also.
What is the rate for conversion of rupees into designated
currencies and vice versa?
Remittances received in Indian rupees for opening these accounts
shall be converted by the authorised dealer into the designated
foreign currency at the clean T.T. selling rate for that currency
ruling on the date of conversion. For the purpose of payment in
rupees, funds held in these accounts shall be converted into rupees
at the authorised dealer's clean T.T. buying rate for the concerned
currency ruling on the date of withdrawal.
What is the manner of payment of interest?
Interest on balances held in these accounts may be paid half-yearly
or on an annual basis as desired by the depositor. Interest may be
credited to a new FCNR(B) account or an existing/new NRE/NRO/ NRNR/NRSR
account in the name of the account holder, at his option.
Are loans/overdrafts allowed against security of funds held in
the account?
The terms and conditions as applicable to NRE deposits (cf. Schedule
1) in respect of loans and overdrafts in India to depositor and to
third parties as also loans outside India against security of
deposits, shall apply mutatis mutandis to FCNR(B) deposits. The
margin requirement shall be notionally calculated on the rupee
equivalent of the deposits.
What happens in case of change of resident status of the account
holder?
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. However, except the provisions
relating to rate of interest and reserve requirements as applicable
to FCNR(B) deposits, for all other purposes such deposits shall be
treated as resident deposits from the date of return of the account
holder to India. Authorised dealers should convert the FCNR(B)
deposits on maturity into resident rupee deposit accounts or RFC
account (if the depositor is eligible to open RFC account), at the
option of the account holder and interest on the new deposit (rupee
account or RFC account) shall be payable at the relevant rates
applicable for such deposits.
What are the types of accounts in the Non-Resident Ordinary Rupee
(NRO) account scheme ?
NRO accounts may be opened/maintained in the form of current,
savings, recurring or fixed deposit accounts. The requirements laid
down in the directives issued by Reserve Bank in regard to resident
accounts shall apply to NRO accounts.
What are the permissible credits/debits?
Credits:Proceeds of remittances received in any permitted
currency from outside India through normal banking channels or any
permitted currency tendered by the account-holder during his
temporary visit to India or transfers from rupee accounts of
non-resident banks. Legitimate dues in India of the account holder.
Debits: All local payments in rupees including payments for
investments subject to compliance with the relevant regulations made
by the Reserve Bank. Remittance outside India of current income in
India of the account holder net of applicable taxes.
Is remittance of funds held in NRO accounts allowed?
Balances in NRO accounts are not eligible for remittance outside
India without the approval of Reserve Bank. Funds received by way of
remittances from outside India in foreign exchange which have not
lost their identity as remittable funds will only be considered by
Reserve Bank for remittance outside India.Where an account
(current/savings) is opened by a foreign tourist visiting India,
with funds remitted from outside India in a specified manner or by
sale of foreign exchange brought by him to India, authorised dealers
may convert the balance in the account at the time of departure of
the tourist from India into foreign currency for payment to the
account holder provided the account has been maintained for a period
not exceeding six months and the account has not been credited with
any local funds, other than interest accrued thereon.
Are loans/overdrafts allowed on NRO accounts?
Loans to non-resident account holders may be granted in rupees
against the security of fixed deposits subject to usual norms as are
applicable to resident accounts, for personal purposes or for
carrying on business activities except for the purpose of re-lending
or carrying on agricultural/plantation activity or for investment in
real estate business. ii) Authorised dealer/bank may permit
overdraft in the account of the account holder subject to his
commercial judgement and compliance with the interest rate etc.
directives.
To Third Parties:Loans/overdrafts to resident
individuals/firms/companies in India may be granted against the
security of deposits held in NRO accounts, subject to the following
terms and conditions.
(i) The loans shall be utilised only for meeting borrower's personal
requirements and/or business purpose and not for carrying on
agricultural/plantation activities or real estate business, or for
re-lending.
(ii) Regulations relating to margin and rate of interest as
stipulated by Reserve Bank from time to time shall be complied with.
(iii) The usual norms and considerations as applicable in the case
of advances to trade/industry shall be applicable for such
loans/facilities.
How will the loans/overdrafts be treated in the event of change
in the resident status of the borrower?
In case of persons who have availed of loan or overdraft facilities
while resident in India and who subsequently becomes a person
resident outside India, the authorised dealer may at his discretion
and commercial judgement allow continuance of the loan/overdraft
facilities. In such cases, payment of interest and repayment of loan
may be made by inward remittance or out of legitimate resources in
India of the person concerned.
What happens in case of change of resident status of the account
holder?
(a) From Resident to Non-Resident
When a person resident in India leaves India for a country (other
than Nepal or Bhutan) for taking up employment, or for carrying on
business or vocation outside India or for any other purpose
indicating his intention to stay outside India for an uncertain
period, his existing account should be designated as a Non-Resident
(Ordinary) account.
(b) From Non-resident to Resident NRO accounts may be re-designated
as resident rupee accounts on the return of the account holder to
India for taking up employment, or carrying on business or vocation
or for any other purpose indicating his intention to stay in India
for an uncertain period. Where the account holder is only on a
temporary visit to India, the account should continue to be treated
as non-resident during such visit.
What is the period of deposit for the Non-Resident (Non-Repatriable)
rupee deposit scheme?
The deposits may be held for periods ranging from 6 months to 3
years.
What about repatriability of funds?
Only interest accrued on the deposits is repatriable.
How about renewal/transfer of the deposit?
The principal amount of deposit together with interest accrued
thereon may be renewed for a further period ranging from 6 months to
3 years. If the interest accrued on an existing deposit is invested
under the Scheme, the amount of interest so invested, will not be
eligible for repatriation. The account can also be shifted from one
authorised dealer to another.
Can the deposit be gifted?
In the case of individual deposit holder, the amount of deposit can
be gifted to any resident/non-resident or to any Charitable Trust in
India recognised under the Income Tax Act, 1961.
What about loans/overdrafts?
Loans/overdrafts in India, against the security of these deposits
may be granted by the authorised dealer to account holders/third
parties for personal purposes or for carrying on business activities
and not for carrying on agricultural/plantation activities or real
estate business, or for re-lending, subject to their normal
commercial judgement. Repayment of loans/liquidation of overdraft to
the account holder shall be by way of inward remittance from outside
India through normal banking channels or by debit to NRE/FCNR/NRO/NRNR/NRSR
account of the depositor or by adjustment against maturity proceeds
of deposit. Repayment of loans availed by third parties may be made
out of their own resources.
Is there nomination facility?
An authorised dealer may register nomination in favour of either a
resident or non-resident. However, nomination in favour of a
non-resident may be registered subject to the condition that the
amount standing to the credit of the depositor, in the event of his
death, will be paid to the non-resident nominee only in Indian
rupees by credit to the nominee's NRO/NRNR/NRSR account and will not
be allowed to be remitted outside India.
Who is eligible to open a Non-resident (special) rupee (NRSR)
account, and what are the different types of accounts?
NRIs (other than nationals of Bangladesh/Pakistan) who voluntarily
undertake not to seek remittance of funds held in these accounts as
also income earned thereon are eligible to maintain NRSR accounts
with an authorised dealer. ii) These accounts shall carry the same
facilities and restrictions as are applicable to domestic accounts
of residents in respect of repatriation of funds held in the account
and/or income accrued thereon with an exception of investment in
shares/securities or immovable property or agricultural/plantation
activities or real estate business in India which shall be governed
by the regulations applicable to such investments by non-residents.
iii) The directives issued by Reserve Bank in regard to domestic
accounts shall be applicable to these accounts. These accounts may
be maintained in the form of current, savings, recurring or fixed
deposit account.
What happens in case of change or resident status of the account
holder?
When a person resident in India becomes a person resident outside
India (other than Nepal and Bhutan) on account of his taking up
employment, or carrying on business or vocation outside India or for
any other purpose indicating his intention to stay outside India
permanently or for an uncertain period, the person concerned will
have the option of designating his existing domestic account as NRO
account or NRSR account.
Currency Import/Export
What are the rules governing the export and import of Indian
currency and currency notes?
Any person resident in India,
(a) may take outside India (other than to Nepal and Bhutan) currency
notes of Government of India and Reserve Bank of India notes up to
an amount not exceeding Rs.5000/- per person;
(b) may take or send outside India (other than to Nepal and Bhutan)
commemorative coins not exceeding two coins each. Commemorative Coin
includes coins issued by Government of India Mint to commemorate any
specific occasion or event and expressed in Indian currency.
(c) Who had gone out of India on a temporary visit, may bring into
India at the time of his return form any place outside India (other
than from Nepal and Bhutan), currency notes of Government of India
and Reserve Bank of India notes up to an amount not exceeding
Rs.5000/- per person.
A person may
(a) send into India without limit foreign exchange in any form other
than currency notes, bank notes and travellers cheques;
(b) bring into India from any place outside India without limit
foreign exchange (other than un-issued notes), provided that
bringing of foreign exchange into India under clause (b) shall be
subject to the condition that such person makes, on arrival in
India, a declaration to the Custom authorities in Currency
Declaration Form (CDF), provided further that it shall not be
necessary to make such declaration where the aggregate value of the
foreign exchange in the form of currency notes, bank notes or
traveller's cheques brought in by such person at any one time does
not exceed US$ 10,000 or its equivalent and/or the aggregate value
of foreign currency notes brought in by such person at any one time
does not exceed US$ 5000 or its equivalent.
Export of foreign exchange and currency notes:
(1) An authorised person may send out of India foreign currency
acquired in normal course of business,
(2) Any person may take or send out of India, (i) Cheques drawn on
foreign currency account maintained in accordance with Foreign
Exchange Management (Foreign Currency Accounts by a person resident
in India) Regulations, 2000; (ii) foreign exchange obtained by him
by drawing from an authorised person in accordance with the
provisions of the Act or the rules or regulations or directions made
or issued there under; (iii) currency in the safes of vessels
or aircraft which has been brought into India or which has been
taken on board a vessel or aircraft with the permission of the
Reserve Bank;
(3) Any person may take out of India, (i) foreign exchange possessed
by him in accordance with the Foreign Exchange Management
(Possession and Retention of Foreign Currency) Regulations, 2000;
(ii) unspent foreign exchange brought back by him to India while
returning from travel abroad and retained in accordance with the
Foreign Exchange Management (Possession and Retention of Foreign
Currency) Regulations, 2000;
(4) Any person resident outside India may take out of India unspent
foreign exchange not exceeding the amount brought in by him and
declared in accordance with the provision to clause (b) of
Regulation 6, on his arrival in India.
Property
Can an Indian citizen resident outside India acquire and transfer
property in India?
A person resident outside India who is a citizen of India may -
(a) acquire any immovable property in India other than
agricultural/plantation/farm house, and
(b) transfer any immovable property in India to a person resident in
India.
(c) Transfer any immovable property other than agricultural or
plantation property or farm house to a person resident outside India
who is a citizen of India or to a person of Indian origin resident
outside India.
Can a person of Indian Origin acquire and transfer property in
India?
A person of Indian origin resident outside India may
(a) acquire any immovable property other than agricultural land/farm
house/plantation property in India by purchase, from out of (i)
funds received in India by way of inward remittance from any
place outside India or (ii) funds held in any non-resident account
maintained in accordance with the provisions of the Act and the
regulations made by the Reserve Bank under the Act;
(b) acquire any immovable property in India other than agricultural
land/farm house/plantation property by way of gift from a person
resident in India or from a person resident outside India who is a
citizen of India or from a person of Indian origin resident outside
India;
(c) acquire any immovable property in India by way of inheritance
from a person resident outside India who had acquired such property
in accordance with the provisions of the foreign exchange law in
force at the time of acquisition by him or the provisions of these
Regulations or from a person resident in India;
(d) transfer any immovable property in India other than agricultural
land/farm house/plantation property, by way of sale to a person
resident in India;
(e) transfer agricultural land/farm house/plantation property in
India, by way of gift or sale to a person resident in India who is a
citizen of India;
(f) transfer residential or commercial property in India by way of
gift to a person resident in India or to a person resident outside
India who is a citizen of India or to a person of Indian Origin
resident outside India.
Can a person resident outside India acquire immovable property
for carrying on a permitted activity?
A person resident outside India who has established in India in
accordance with the Foreign Exchange Management (Establishment in
India of Branch or Office or other Place of Business) Regulations,
2000, a branch, office or other place of business for carrying on in
India any activity, excluding a liaison office, may -
a) acquire any immovable property in India, which is necessary for
or incidental to carrying on such activity; Provided that i) all
applicable laws, rules, regulations or directions for the time being
in force are duly complied with; and ii) the person files with the
Reserve Bank a declaration in the form IPI annexed to these
regulations, not later than ninety days from the date of such
acquisition;
b) transfer by way of mortgage to an authorised dealer as a security
for any borrowing, the immovable property acquired in pursuance of
clause (a).
Can sale proceeds of immovable property be repatriated?
a) A person referred to in sub-section (5) of Section 6 of the Act,
or his successor shall not, except with the prior permission of the
Reserve Bank, repatriate outside India the sale proceeds of any
immovable property referred to in that sub-section;
b) In the event of sale of immovable property other than
agricultural land/farm house/plantation property in India by a
person resident outside India who is a citizen of India or a person
of Indian origin, the authorised dealer may allow repatriation of
the sale proceeds outside India, provided the following conditions
are satisfied, namely:
(i) the immovable property was acquired by the seller in accordance
with the provisions of the foreign exchange law in force at the time
of acquisition by him or the provisions of these Regulations;
(ii) the sale takes place after three years from the date of
acquisition of such immovable property or from the date of payment
of final instalment of consideration for its acquisition, whichever
is later; and;
(iii) the amount to be repatriated does not exceed (a) the amount
paid for acquisition of the immovable property in foreign exchange
received through normal banking channels or out of funds held in
Foreign Currency Non-Resident Account or (b) the foreign currency
equivalent, as on the date of payment, of the amount paid where such
payment was made from the funds held in Non-Resident External
account for acquisition of the property;
(iv) in the case of residential property, the repatriation of sale
proceeds is restricted to not more than two such properties.
Stocks & Bonds
What are the restrictions on investment in a firm or a
proprietary concern in India by a person resident outside India?
Save as otherwise provided in the Act or rules or regulations made
or directions or orders issued thereunder, no person resident
outside India shall make any investment by way of contribution to
the capital of a firm or a proprietary concern or any association of
persons in India; Provided that the Reserve Bank may, on an
application made to it, permit a person resident outside India
subject to such terms and conditions as may be considered necessary
to make an investment by way of contribution to the capital of a
firm or a proprietary concern or any association of persons in
India.
Permission for investment in certain cases
A non-resident Indian or a Person of Indian Origin resident outside
India may invest by way of contribution to the capital of a firm or
a proprietary concern in India, provided that -
(a) the amount invested is received either by inward remittance
through normal banking channels or out of an account maintained with
an authorised dealer/authorised bank by the non-resident Indian or
the person of Indian origin in accordance with the relevant
Regulations;
(b) the firm or the proprietary concern is not engaged in any
agricultural/plantation activity or real estate business, i.e.
dealing in land and immovable property with a view to earning profit
or earning income therefrom;
(c) the amount invested shall not be eligible for repatriation
outside India ;
(d) where investment is made out of NRSR account of the non-resident
investor, the income earned on investment or proceeds of investment
shall be credited only to the NRSR account of the investor.
Permission to a firm or a proprietary concern to make payment to a
non-resident Indian or a person of Indian origin who has made
investment. A firm or a proprietary concern in India may make
payment to or for the credit of a non-resident Indian or a person of
Indian origin the sum invested by such person in that firm or the
proprietary concern or the income accruing to such person by way of
profit on such investment.
What are the permissions needed for purchase of shares by certain
persons resident outside India?
(1) A person resident outside India (other than a citizen of
Bangladesh
or Pakistan or Sri Lanka) or an entity outside India, whether
incorporated or not, (other than an entity in Bangladesh or
Pakistan) may purchase shares or convertible debentures of an Indian
company under Foreign Direct Investment Scheme, subject to the terms
and conditions specified in Schedule 1.
(2) A registered Foreign Institutional Investor (FII) may purchase
shares or convertible debentures of an Indian company under the
Portfolio Investment Scheme, subject to the terms and conditions
specified in Schedule 2.
(3) A non-resident Indian or an overseas corporate body may purchase
shares or convertible debentures of an Indian company- (i) on a
stock exchange under the Portfolio Investment Scheme , subject to
the terms and conditions specified in Schedule 3; or/and (ii) on
non-repatriation basis other than under Portfolio Investment Scheme,
subject to the terms and conditions specified in Schedule 4.
(4) A non-resident Indian or an overseas corporate body or a
registered FII may purchase securities, other than shares or
convertible debentures of an Indian company, subject to the terms
and conditions specified in Schedule 5.
What are the rules governing acquisition of right shares?
(1) A person resident outside India may purchase equity or
preference shares or convertible debentures offered on right basis
by an Indian company which satisfies the conditions specified in
sub-regulation (2).
(2) An Indian company which satisfies the following conditions, may
offer to a person resident outside India, equity or preference
shares or convertible debentures on right basis, namely:-
(i) The offer on right basis does not result in increase in the
percentage of foreign equity already approved, or permissible under
the Foreign Direct Investment Scheme in terms of these Regulations;
(ii) The existing shares or debentures against which shares or
debentures are issued by the company on right basis were acquired
and are held by the person resident outside India in accordance with
these Regulations;
(iii) The offer on right basis to the persons resident outside India
is at a price which is not lower than that at which the offer is
made to resident shareholders;
(3) The right shares or debentures purchased by the person resident
outside India shall be subject to same conditions including
restrictions in regard to repatriability as are applicable to the
original shares against which right shares or debentures are
issued:- Provided that the amount of consideration for purchase of
right shares or debentures is paid by way of inward remittance in
foreign exchange through normal banking channels or by debit to NRE/FCNR
account, when the shares or debentures are issued on repatriation
basis:- Provided further that in respect of the shares or debentures
issued on non-repatriation basis, the amount of consideration may
also be paid by debit to NRO/NRSR/NRNR account.
What are the rules governing issue and acquisition of shares
after merger or de-merger or amalgamation of Indian companies?
(1) Where a Scheme of merger or amalgamation of two or more Indian
companies or a reconstruction by way of de-merger or otherwise of an
Indian company, has been approved by a Court in India, the
transferee company or, as the case may be, the new company may issue
shares to the shareholders of the transferor company resident
outside India - subject to the following conditions, namely:
(a) the percentage of shareholding of persons resident outside India
in the transferee or new company does not exceed the percentage
specified in the approval granted by the Central Government or the
Reserve Bank, or specified in these Regulations:- Provided that
where the percentage is likely to exceed the percentage specified in
the approval or the Regulations, the transferor company or the
transferee or new company may, after obtaining an approval from the
Central Government, apply to the Reserve Bank for its approval under
these Regulations.
(b) The transferor company or the transferee or new company shall
not engage in agriculture, plantation or real estate business or
trading in TDRs; and
(c) The transferee or the new company files a report within 30 days
with the Reserve Bank giving full details of the shares held by
persons resident outside India in the transferor and the transferee
or the new company, before and after the merger/amalgamation/
reconstruction, and also furnishes a confirmation that all the terms
and conditions stipulated in the scheme approved by the Court have
been complied with.
What are the rules relating to issue of shares under the
Employees' Stock Options Scheme to persons resident outside India?
(1) An Indian company may issue shares under the Employees' Stock
Options Scheme, by whatever name called, to its employees or
employees of its joint venture or wholly owned subsidiary abroad who
are resident outside India, directly or through a Trust:- Provided
that
a) the scheme has been drawn in terms of regulations issued under
the Securities Exchange Board of India Act, 1992; and
b) face value of the shares to be allotted under the scheme to the
non-resident employees does not exceed 5% of the paid-up capital of
the issuing company.
(1) The Trust and the issuing company shall ensure that value of
shares held by persons resident outside India under the scheme does
not exceed the limit specified in clause (b) of sub-regulation (1).
(2) The issuing company shall furnish to the Reserve Bank, within
thirty days from the date of issue of shares under the scheme, a
report giving the following particulars/document, -i) names of
persons to whom shares are issued under the scheme and number of
shares issued to each of them; (ii) a certificate from the Company
Secretary of the issuing company that the value of shares issued
under the scheme does not exceed 5% of the paid up capital of the
issuing company and that the shares are issued in compliance with
the regulations issued by the SEBI in this behalf.
What about transfer of shares and convertible debentures of an
Indian company by a person resident outside India?
1) Subject to the provisions of sub-regulation (2), a person
resident outside India holding the shares or debentures of an Indian
company in accordance with these Regulations, may transfer the
shares or debentures so held by him, in compliance with the
conditions specified in the relevant Schedule of these regulations.
(2)(i) A person resident outside India, not being a non-resident
Indian or an overseas corporate body, may transfer by way of sale,
the shares or convertible debentures held by him to any person
resident outside India:- Provided that the person to whom the shares
are being transferred has obtained prior permission of Central
Government to acquire the shares if he has previous venture or tie
up in India through investment in shares or debentures or a
technical collaboration or a trade mark agreement or investment by
whatever name called in the same field or allied field in which the
Indian company whose shares are being transferred is engaged.
(ii) A non-resident India or an overseas corporate body may transfer
by way of sale, the shares or convertible debentures held by him or
it to another non-resident India or an overseas corporate body only.
(iii) A person resident outside India may transfer any security held
by him, to a person resident in India by way of gift.
Is prior permission of the Reserve Bank needed in certain cases
for transfer of security?
Yes, it is needed in certain cases.
A. Transfer by way of gift or sale by a person resident in India
A person resident in India who proposes to transfer to a person
resident outside India:-
(a) any security, by way of gift, shall make an application to the
Reserve Bank furnishing the following information, namely:
i) Name and address of the transferor and the proposed transferee
ii) Relationship between the transferor and the proposed transferee
iii) Reasons for making the gift
(b) any share/convertible debenture of an Indian company, by way of
sale, shall obtain the Government approval for the transfer and
thereafter apply to the Reserve Bank for its approval, which may be
granted subject to such conditions as are considered necessary by
Reserve Bank, including the price at which such sale may be made.
B. Transfer by way of sale not covered by Regulation 9 by a
person resident outside India
(1) Transfer by way of sale not covered by Regulation 9 by a person
resident outside India of the shares/convertible debentures held by
him to a person resident in India, shall require prior permission of
the Reserve Bank, for which application in form TS 1 may be made to
the Reserve Bank.
(2) While considering the grant of permission, the Reserve Bank
shall take into account the following factors, namely:
(a) where the shares of an Indian company are traded on stock
exchange,
i) the sale is at the prevailing market price on stock exchange and
is
effected through a merchant banker registered with Securities and
Exchange Board of India or through a stock broker registered with
the stock exchange;
ii) if the transfer is other than that referred to in clause (i) the
Reserve Bank will satisfy itself that the shares are proposed to be
sold at a price arrived at by taking the average quotations (average
of daily high and low) for one week preceding the date of
application with 5 percent variation. Where, however, the shares are
being sold by the foreign collaborator or the foreign promoter of
the Indian company to the existing promoters in India with the
objective of passing management control in favour of the resident
promoters the proposal for sale will be considered at a price which
may be higher by up to a ceiling of 25 percent over the price
arrived at as above.
(b) where the shares of an Indian company are not listed on stock
exchange or are thinly traded, 1) if the consideration payable for
the transfer does not exceed Rs.20 lakh per seller per company, at a
price mutually agreed to between the seller and the buyer, based on
any valuation methodology currently in vogue, on submission of a
certificate from the statutory auditors of the Indian company whose
shares are proposed to be transferred, regarding the valuation of
the shares, and ii) if the amount of consideration payable for the
transfer exceeds Rs.20 lakh per seller per company, at a price
arrived at, at the seller's option, in any of the following manner,
namely:
A) a price based on earning per share (EPS linked to the Price
Earning (P/E) MULTIPLE, OR A PRICE BASED ON THE Net Asset Value (NAV)
linked to book value multiple, whichever is higher, or
B) the prevailing market price in small lots as may be laid down by
the Reserve Bank so that the entire shareholding is sold in not less
than five trading days through screen based trading system
C) where the shares are not listed on any stock exchange, at a price
which is lower of the two independent valuations of share, one by
statutory auditors of the company and the other by a Chartered
Accountant or by a Merchant Banker in Category 1 registered with
Securities and Exchange Board of India.
Explanation:
i) A share is considered as thinly traded if the annualised trading
turnover in that share, on main stock exchanges in India, during the
six calendar months preceding the month in which application is
made, is less than 2 percent (by number of shares) of the listed
stock.
ii) For the purpose of arriving at Net Asset Value per share, the
miscellaneous expenses carried forward, accumulated losses, total
outside liabilities, revaluation reserves and capital reserves
(except subsidy received in cash) shall be reduced from value of the
total assets and the net figure so arrived at shall be divided by
the number of equity shares issued and paid up. Alternatively,
intangible assets shall be reduced from the equity capital and
reserves (excluding revaluation reserves) and the figure so arrived
at shall be divided by the number of equity shares issued and paid
up. The NAV so calculated shall be used in conjunction with the
average BV multiple of Bombay Stock Exchange National Index during
the calendar month immediately preceding the month in which
application is made and BV multiple shall be discounted by 40 per
cent.
iii) For computing the price based on Earning Per Share, the earning
per share as per the latest balance sheet of the company shall be
used in conjunction with the average Price Earning Multiple of
Bombay Stock Exchange National Index for the calendar month
preceding the month in which application is made and Price Earning
shall be discounted by 40 per cent.
What about the remittance of sale proceeds of an Indian security
held by a person resident outside India?
(1) No remittance of sale proceeds of an Indian security held by a
person resident outside India shall be made otherwise than in
accordance with these Regulations and the conditions specified in
the relevant Schedule.
(2) An authorised dealer may allow the remittance of sale proceeds
of a security (net of applicable taxes) to the seller of shares
resident outside India:- Provided -
a) the security was held by the seller on repatriation basis;
b) either the security has been sold on a recognised stock exchange
in India through a stock broker at the ruling market price as
determined on the floor of the exchange, or the Reserve Bank's
approval has been obtained in other cases for sale of the security
and remittance of the sale proceeds thereof; and
c) a no objection/tax clearance certificate from the Income Tax
authority has been produced.
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