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A number of important terms commonly used in the contents of this website are explained here under for quick reference and better understanding:
| Non-Resident Indian |
Person of Indian Origin |
Important Note |
Person Resident in India |
| Concept of Resident & Non-Resident |
Overseas Corporate Body
Non-Resident Indian : Indian Citizens who stay abroad for employment or for carrying on a business or vocation or for any other purpose in circumstances indicating an indefinite period of stay outside India and Indian Citizens (including Government or Public Sector Officilas) working abroad on assignments or deputation are referred to as Non-Resident Indians Under Foreign Exchange Regulation Act (FERA). Non-Resident Indians become Residents of India only when they return to India for employment or carrying on any business or vocation or for any other purpose indicating an idefinite period of stay in India. They are not regarded as persons resident in India during their short visit to India for holiday, business etc.
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Person of Indian Origin :Under FERA, a Foreign Citizen (not being a Citizen of Pakistan or Bangladesh) is deemed to be of Indian Origin, if he at any time held an Indian Passport or either of his parents or any of his grand parents were an Indian Citizen. A wife (not being a citizen of Pakistan or Bangladesh) of an Indian Citizen or a person of Indian origin is also deemed to be of Indian Origin, even though she may be of Non-Indian Parentage.
Important Note : Investment Facilities available to Non-Resident Indian Citizens are also made available to Foreign Citizens of Indian Origin, treating them at par with the former. Therefore, for the sake of simplicity, the term Non-Resident Indian (NRI) has been used in this Guide Book to denote collectively Non-Resident Indians as well as Foreign Citizens of Indian Origin.
Person Resident in India :Under FERA, the term 'Person Resident in India' includes all Indian Citizens who have been staying in India at any time after 25th March 1947, Indian Citizens who have been Non-residents when they return to India for settlement, Foreign Citizens who stay in India for employment, business etc.or in circumstances indicating an idefinite period of stay and Foreign Citizens who come and stay in India with their spouses, if their spouses are resident in India.Indian Citizens who proceed abroad for higher studies, short business visits, medical treatment etc. Are treated as Resident in India even during their temporary absence from India.
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Concept of Resident & Non-Resident under the Direct Tax Laws : Under the Direct Tax Laws the concept of Resident and Non-Resident is quite distinct from that under the Foreign Exchange Regulation Act. The Residential Status of a tax payer has to be determined for each assessment year with reference to the state of affairs in the relevant previous year. Broadly speaking, the status has to be determined in the case of an individual on the basis of his physical presence in India, while in other cases, it is dependent upon the situs of the control and management of its affairs. The extent of tax liability is dependent upon the Residential Status.
Overseas Corporate Body : Majority of the investment opportunities available in India to Non-Resident Indians (with the exception of investment in proprietory and partnership concerns) have been also extended to overseas Companies,Partnership Firms, Societies, Trusts and other Corporate Bodies owned directly or indirectly to the extent of atleast 60% by Non-Resident-Indians. Such firms, companies, trusts etc. Referred to as Overseas Corporate Bodies (OCB's) are eligible to open and maintain bank accounts and make other investments in India either with or without repatriation benefits.
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