Page 45 - Banking Finance July 2021

ARTICLE

Now, let us understand about three more terms related to elections or hold public office. The Indian government can
this topic i.e., RNOR, PIO and OCI Cardholders. revoke OCI status in a wide variety of circumstances.

Resident but Not Ordinarily Resident OCI status is not available to anyone who has ever been a
Pakistani or Bangladeshi citizen, or who is a child,
(RNOR): grandchild, or great-grandchild of such a person.
The person will be considered as RNOR in a year - if any one
of the two conditions is satisfied for a Resident. Accounts for NRIs that should be opened for
i) If you have been an NRI in 9 out of 10 financial years maximizing benefits:
preceding the concerned financial year.
Though banks may offer customized accounts as well to lure
OR
NRI customers but here we will discuss 3 standardized
ii) You have been in India for a period of 729 days or less accounts that are available for NRIs with almost all the
during the 7 financial years preceding the concerned Indian Banks. We will look into the main points relating to
financial year. these accounts here and remaining points are as per the
tabular form. These accounts are as follows :-
Benefits for being a RNOR: Income that you earn 1. Non-Resident (External) Rupee Account Scheme -
outside India while you may have returned back to India, NRE Account
will NOT be taxed in India. Therefore, like an NRI, any As the name suggest 'External', this account is meant
income that is earned in India is taxable for you in India and for any foreign inward remittance received from
your income earned outside of India is not taxable in India. external of India i.e., outside of India is to be credited
in this account. No income tax is levied on the interest
Person of Indian Origin (PIO): earned in this account.

A 'Person of Indian Origin (PIO)' is a person resident outside
India who is a citizen of any country other than Bangladesh 2. Non-Resident Ordinary Rupee Account Scheme -
NRO Account
or Pakistan or such other country as may be specified by the
Here if we go by the word present in account name
Central Government, satisfying any following conditions: -
a) If the person held an Indian passport at any time, or 'Ordinary' we can infer the meaning that, Ordinary
income or Income earned in India is to be credited in
b) The person or either of his/her parents or any of his/
this account. Any interest earned in this account
her grandparents was a citizen of India by virtue of the attracts Income tax. So, all care must be taken while
Constitution of India or Citizenship Act, 1955, or receiving foreign inward remittance that must be

c) A spouse of an Indian citizen or of the person mentioned credited to NRE account not in the NRO account.
in above point a) or b), is also treated as a PIO.
3. Foreign Currency (Non-Resident) Account (Banks)
PIOs are extended the same facilities for bank account
Scheme - FCNR (B) Account
maintenance in India as NRIs and are also, for such
Name of this account says everything i.e., this account
purposes, called by the generic name as NRIs.
is allowed to open in all permitted foreign currencies.
As this account is maintained in foreign currency,
Overseas Citizenship of India (OCI)
conversion from foreign currency to INR or vice versa
Cardholders: does not take place. So, this account is best suited to
Overseas Citizenship of India (OCI) was introduced by The save the commission/charges/expenses incurred on
Citizenship (Amendment) Act, 2005, is a form of permanent account of conversion to INR and then again to foreign
residency available to PIO and their spouses which allows currency at the time of outward remittance. And also,
them to live and work in India indefinitely. OCI status is not no income tax is levied on the interest earned in this
citizenship and does not grant the right to vote in Indian account.

BANKING FINANCE | JULY | 2021 | 45