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July 2011

A.P. (DIR Series) Circular No. 70, dated 9-6-2011 — Remittance of assets by foreign nationals — Opening of NRO Accounts.

By Gaurang Gandhi, Chartered Accountant
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Presently, foreign nationals employed in India are eligible to maintain resident accounts with banks in India. On their leaving the country they are required to close their resident accounts with banks in India and transfer the balances to their accounts abroad.

This Circular permits these foreign nationals, subject to certain terms and conditions, to redesignate their resident accounts with banks in India as NRO account on leaving the country. Only bona fide dues of the account holder, when he/ she was resident in India, can be deposited in the NRO account. Debits to the account should only be for the purpose of repatriation of funds to the overseas account of the account holder under the US $ 1 million per financial year scheme and after payment of appropriate taxes.

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