Opening, maintenance and operations of foreign currency accounts abroad by residents require prior approval of the Reserve Bank. The Reserve Bank permission is also necessary for acquisition, holding and disposal of foreign securities or immovable properties abroad by residents. This equally applies to Returning Indians. Returning Indians are the residents abroad who have returned to India and who wish to continue to hold their assets abroad, which were acquired by them while they were residing outside India.

Is any tax concessions available to NRIs on balances/deposits held in NRE/FCNR accounts ?

Yes. Income from interest on moneys standing to the credit of NRE/FCNR accounts is exempt from income tax. Gifts from such accounts are also free of Gift-tax.

Unit Linked Insurance Polices (ULIPS)

Unit linked guidelines were notified by IRDA on 21st December 2005. The main intent of the guidelines was to ensure that they lead to greater transparency and understanding of these products among the insured, especially since the investment risk is borne by the policyholder. It is the endeavor of IRDA to enable the buyer to make the most informed decision possible when planning for financial security. We hope the following FAQs will enable a better insight to all buyers about the character and features of Unit linked Products.

Introduction

Different investment avenues are available to investors. Mutual funds also offer good investmentopportunities to the investors. Like all investments, they also carry certain risks. The investors should compare the risks and expected yields after adjustment of tax on various instruments while taking investment decisions. The investors may seek advice from experts and consultants including agents and distributors of mutual funds schemes while making investment decisions.

With an objective to make the investors aware of functioning of mutual funds, an attempt has been made to provide information in question-answer format that may help the investors in taking investment decisions.

What is a depository ?


A depository is an organisation where share certificates of a shareholder are held in electronic form. This is done at the request of the shareholder through a depository participant (DP). If an investor wants to use services offered by a depository, he/she has to open an account with the depository through a DP - more about him later - much like opening an account with any branch of a bank to utilise its services. In fact, in many ways, a depository is similar to a bank.

Q. What is PAN?

Ans. PAN, is an acronym for Permanent Account Number. It is a ten-digit alphanumeric code that is required by all those involved in any financial deal, be it payment of tax or investing in the Share Market. It is issued by the Income Tax (I-T) Department of the Government of India in the form of a laminated card. A typical PAN would read like GJSK84521U.

Can accounts be maintained by NRIs with any bank in India?

Ans.

Banks holding authorised dealers' licenses (i.e. banks authorized to deal in foreign exchange) or banks specifically authorized in this behalf by Reserve Bank can only maintain accounts in the names of NRIs. Certain Co- operative/commercial banks (referred to as authorized banks) have been specifically permitted to maintain accounts of NRIs expressed in rupees even though they are not authorized dealers.