As many Indians move abroad for education, employment, or permanent settlement, their residential status under FEMA changes based on days of stay and intention to remain outside India. This affects how they manage bank accounts, investments, remittances, and taxation. Below are frequently asked questions that cover common concerns for NRIs:

1. 🏦 Should an NRI change his bank account after moving abroad?

Yes. Upon changing status to NRI, one must:

• Close regular savings account
• Open:
  • NRE Account (Non-Resident External)
  • NRO Account (Non-Resident Ordinary)

2. 💸 What is investment on repatriation and non-repatriation basis?

• Repatriation basis: Sale proceeds and income can be freely remitted abroad.
• Non-repatriation basis: Proceeds cannot be remitted freely; must be held in NRO account. Only net income (interest/dividends) is remittable.

3. 🌍 Can NRIs remit money abroad from India?

Yes, under the USD 1 million scheme per financial year, NRIs can remit:

• Funds from non-repatriable investments
• Subject to compliance and reporting

4. 📈 Can NRIs invest in Indian stock market (shares, mutual funds)?

Yes, under the Portfolio Investment Scheme (PIS):

• NRIs can invest in shares, ETFs, mutual funds
• Must link DEMAT account with NRE account
• IPO investments also allowed
• On non-repatriation basis, no reporting required

5. 🏢 Can NRIs invest in private/public Indian companies?

Yes. Direct investments (listed or unlisted companies) are allowed:

• On both repatriation and non-repatriation basis
• Subject to conditions and reporting

6. 💳 Can NRIs borrow from resident relatives in India?

Yes, up to USD 250,000 per financial year per relative:

• Funds must be deposited in NRO account
• Use restricted to personal use or permitted business
• No re-lending or investment allowed
• Cannot remit proceeds abroad

7. 🎁 Can NRIs receive gifts from resident relatives?

Yes. Gifts can be made in:

• INR or foreign currency, under LRS limit of USD 250,000
• INR gifts must be deposited into NRO account
• INR gifts can be remitted later under USD 1 million scheme

Note: Gifts must comply with FEMA & gift tax laws of the recipient’s country.

8. 📑 Can NRIs hold PPF and NSC accounts?

• New accounts: Not allowed
• Existing PPF/NSC: Can be continued till maturity on non-repatriation basis

9. 🛡️ Can NRIs continue their LIC and other insurance policies?

Yes. Premiums can be continued on existing policies post becoming NRI.

10. 🤝 Can NRIs continue loans given while being resident?

Yes. Loans given before change in status can continue.

• New loans must comply with FEMA loan rules (maturity, usage, interest).

11. 🧾 Can NRIs be partners in Indian partnership firms or LLPs?

Yes, provided:

• Firm/LLP is not in prohibited sectors
• Fresh investments can be made only on a non-repatriation basis

12. 🏠 Can NRIs buy property in India?

Yes. NRIs can purchase:

• Residential and commercial property
• Cannot purchase: Agricultural land, plantation, or farmhouses
• Can receive property as gift from resident or NRI relatives

13. 🔁 Can NRIs returning to India retain foreign assets?

Yes. Under FEMA, returning NRIs can retain:

• Foreign bank accounts
• Foreign investments
• Immovable property abroad

14. ⚖️ What are the penalties for FEMA violations?

• Up to 3x the sum involved (if quantifiable)
• Up to INR 2,00,000 (if not quantifiable)
• Additional INR 5,000/day for continued contravention

📘 Definitions to Know

🔹 Relative (Section 2(77), Companies Act, 2013)

Includes:

• Parents (incl. step), Children (incl. step), Spouse
• Siblings (incl. step)
• In-laws: son’s wife, daughter’s husband
• Members of HUF