A non-resident Indian means a person resident outside India who is an Indian citizen on a person of India origin.

A person is considered to be of Indian origin, if heat any time held an Indian Passport or hereafter of his parents or any of grandparents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955 or the person is spouse of an Indian Citizen or person referred above.

As per section 2(v) of FEMA, Person resident in India means a person residing in India for more than 182 days during the course of preceding financial year.

It does not include a person who has gone out of India or who stays outside India for employment outside India or carrying on business or vocation outside India or for any other purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.

A person who has come to or stays in India will be considered as Resident of India only if

-   He has come for taking employment in India or
-   For carrying on business or vocation in India or
-   For any other purposes, in such circumstances as would indicate his intention to stay in India for any uncertain period.

Non-Resident (External) Rupee (NRE) account can be opened by any NRI with authorized dealers and with banks authorized by the Reserve Bank to maintain such account. For opening these accounts, the funds are required to be remitted to India through any bank from the country of residence of the prospective account holder. The accounts may be maintained in any form e.g. savings, current, recurring or fixed deposit account etc. Income from interest on balance s standing to the credit of NRE Accounts is exempt from Income Tax.

Any person resident outside India may open NRO account with an authorized dealer. The operations on the accounts should not result in the account holder making available foreign exchange to any person resident in India against reimbursement in rupees or in any other manner. NRO accounts may be opened/ maintained in the form of current, savings, and recurring or fixed deposit accounts. The requirements laid down in the directives issued by Reserve Bank in regard to resident account shall apply to NRO accounts. Interest earned on NRO account is freely repatriable. Withdrawals from these accounts can be freely made for local disbursements as well as for investments in units of UTI, Government Securities and National Plan / Savings Certificates.

Acceptance of deposits under the FCNR scheme has been discontinued w.e.f. 15/08/94. Deposits already accepted are however, allowed to continue till their maturity and thereafter no renewals would be permitted. Foreign Currency (Non-Resident) Accounts (Banks) (FCNR (B)) Scheme NRIs are eligible to open and maintain these accounts with an authorised dealer. These accounts may be opened with funds remitted from outside India through normal banking channels. Deposit of funds in the accounts may be accepted in Pound Sterling, US Dollar, Japanese Yen, Euro and such other currencies as may be designated by Reserve Bank from time to time. The account can be opened as term deposit only with for minimum period for 1year and maximum period of 3 years.

You can invest in either repatriable schemes or non-repatriable schemes. Largely the investments can be made financial instruments like shares, securities, debentures units, and mutual funds and also in immovable property in India subject to the provisions applicable to each individual investment.

A rupee policy is one, which stipulates that the amounts payable and receivable will be paid or received in Indian Rupees only; a foreign currency policy is one, which is designated, in a foreign currency.

Yes, if the policy owner is e.g. an NRI it is for the policy owner to issue necessary instructions to his banker

Yes, the LIM issued by RBI on 17-01-2003, states that the basic rule for the settlement of claims on rupee policies in favour of claimants resident in India is that payments in foreign currency will be permitted only in proportion in which the amount of premium is paid in foreign currency to the total premium payable.

It is better to prefer to despatch the policy to an Indian address as I n case of a complaint of the non receipt of the document, by the addressee where it has been dispatches to the overseas address, there is no means of the verification of the correctness of the complaint where the document is send by the registered post, foreign post offices normally do not confirm the delivery of the article to the addressee.

Life insurance is one of the most popular savings/investment vehicles in India. An insurance policy offers much more than just tax planning and investment returns. It offers you the ability to plan for unforeseen events that could affect your family’s financial problem adversely.

Under the Income Tax Act, 1961, the following tax benefits are available for the life insurance.

The benefits under the Income tax are of two types:

1.  Deductions
2.  Exemptions

The benefits mentioned above are irrespective of the residential status of the person.

The deductions are available only against the income earned in India and taxable in India.