The Government of India has introduced schemes for the benefit of tax saving for NRIs and PIOs by the way of investments. Following are the tax exemptions that NRIs and PIOs can enjoy.

Income from the investments cited below is totally exempted from tax:

• Deposits made under the following bank accounts:
1. Non External Rupee Account (NRE) [Tax exemptions relating to NRE will cease immediately when the NRI/PIO becomes the resident of India.]
2. Foreign Currency Non-resident Account (FCNR) [Interest on FCNR will continue to be tax free as long as the NRI continues to be Resident not an Ordinarily Resident.]
• Units of Unit Trust of India (UTI), mutual funds, bonds, securities and saving certificates (as per the conditions mentioned under the Income-tax laws and regulations).
• Dividends declared by Indian companies.
• Long term capital gains from transfer of equity shares in a company and/or equity oriented schemes of Mutual funds that are subject to securities transaction tax.

The Finance Act 1992 has considerably reduced wealth tax levied on NRIs and PIOs. w.e.f. 1st April, 1993, wealth tax is charged only on non-productive assets like urban land, buildings (except one house property), jewellery, bullion, vehicles, and cash over 50,000/- etc.
The current rate of wealth tax is 1% on the cumulative market value of taxable assets as on 31st March every year in excess of Rs.1.5 million.

Gift Tax Act, 1958 has been repealed with effect from 1st October, 1998 and as such, Gift Tax is not chargeable on any gifts made on or after that date.
With regard to gifts of foreign exchange or specified assets made by NRls to their relatives in India, it should be noted that:

• Gifts made by an NRI/PIO to his or her spouse, minor children or son's wife will involve clubbing of income and wealth in the hands of the donor-NRI/ PIO.
• In the case of gifts to minor children the clubbing of income, as above, will cease upon such children attaining the age of 18 years.
• All gifts received by residents from NRls/PlOs may be subject to the tax authorities requiring the recipient to provide evidence as regards the identity and financial capacity of the donor and genuineness of the gift.
• The Income Tax Act has now provided that any sum of money exceeding Rs.25, 000 received without consideration (i.e., gift) by an individual from any person on or after 1st September, 2004, the whole of such sum will be chargeable to income-tax in the assessment of recipient (i.e., donee) under that head "Income from other sources" for and from assessment year 2005-06 and onwards.
• Gifts on occasion other than marriage, for example, birthday, marriage anniversary and other social occasions, religious ceremonies etc., would be taxable as income. Gifts received on the occasion of the marriage of the individual, irrespective of any limit, (but within reasonable limits) would not constitute income.
• Under the Foreign Exchange Management Act, 1999 no approval from Reserve Bank of India (RBI) is necessary for the resident donee to hold gifted immovable property outside India provided the said property is gifted by a person resident outside India. General permission, subject to certain conditions, is granted by RBI for the resident donees to hold foreign moveable properties such as shares and securities gifted by NRI/PIO donors.

The Government of India has laid down certain rules for investments by NRIs and PIOs in the loans, securities, shares etc. Let’s take the investment opportunities to open to NRIs and PIOs one by one.

Remittance of capital assets in India by a person whether resident in or outside India requires the approval of the Reserve Bank of India. Other rules laid down by the Foreign Exchange Management Act, 1999 (FEMA) with regard to the remittance facilities for NRIs and PIOs are as follow:

1. Remittance of assets by NRI and PIO:
• NRI/PIO may remit up to 1,00,000 per year out of the balance in his Non Resident (ordinary) account or from the sale proceeds of assets.
• NRI/PIO may remit sales proceeds of immovable property sold by him out of rupee funds provided that he owned the property for a period of not less than 10 years.
2. Repatriation of sale proceeds of residential property purchased by NRIs /PIOs out of the foreign exchange:
• NRIs/PIOs can repatriate sales proceeds of maximum two residential properties purchased by them.
• NRIs/PIOs can remit funds of application/earnest money with interest on account of non-allotment provided that the original payment was made out of NRE (Non External Rupee) or FCNR (Foreign Currency Non-resident) account.
3. Remittance of current income:
• NRIs/PIOs are permitted to remit their current income like rent, dividend, pension, interest etc. provided that they do not maintain NRO (Non resident ordinary rupee) accounts. This can be done only after an authorised certification by a Charted Accountant certifying that the amount proposed to be remitted is eligible for remittance and that applicable taxes have been paid for.
• NRIs/PIOs can credit the current income to their Non-Resident (External) Rupee account provided the authorised dealer is satisfied that the credit represents current income of the non-resident account holder and income tax thereon has been deducted/provided for.
4. Remittance of Rent:
   NRIs/PIOs can freely rent out their immovable property in India without the prior permission of the RBI. If the house rented by the NRI/PIO is financed by the way of a housing loan, the entire rental income (even if it is more than the prescribed instalment) has to be adjusted towards the repayment of the loan. If the rental income is less than the prescribed instalment, the borrower should remit the outstanding loan amount from abroad or from his NRE, FCNR or NRO account in India.
5. International Credit Cards:
   NRI and PIOs can apply for international credit cards without the prior permission of the RBI.

Following are the regulations laid under FEMA (Foreign Exchange Management Act) in relation to the transactions of immovable property in India by NRIs and PIOs:

• A foreign citizen who is a resident of India can purchase immovable property (IP) in India without any approval from the RBI.
• Citizens of Pakistan, Bangladesh, Sri Lanka, Afghanistan, China, Iran, Nepal and Bhutan (whether resident in India or not) are prohibited from acquiring or transferring any IP in India without prior approval of the RBI.
• Investment in agricultural property, plantation and farmhouse is prohibited for all classes of persons resident outside India, be it NRIs/OCBs/ foreign citizens or other foreign entities.

The Pravasi Bhartiya Bima Yojna, 2006 provides for an insurance cover of a minimum sum of Rs. 5.00 lakhs payable to the nominee/legal heir in the event of death or permanent disability of any Indian emigrant who goes abroad for employment purpose after obtaining emigration clearance from the concerned Protector of Emigrants (POE).

The insurance scheme began on 1st of February, 2006. This Scheme applies to all citizens of India who apply for and obtain an emigration clearance as required under the Emigration Act, 1983 (31 of 1983). This scheme does not apply in case of war or internal conflict in the country to which the citizens of India holding the said policy has gone for work. The Insurance Policy shall be valid for a minimum period of two years or the actual period of contract, whichever is longer.

NRIs and PIOs can open bank accounts in India. Certain co-operative banks, commercial banks having authorised licenses by Reserve Bank of India are allowed to deal in foreign currency and open accounts in the names of NRIs and PIOs. Bank accounts can be maintained by NRIs and PIOs in rupees as well as in foreign currency. There are four types of rupee accounts for NRIs and PIOs :

• Non resident (external) Rupee accounts (NRE accounts) : Balances held in NRE accounts can be repatriated abroad freely.
• Ordinary Non-resident Rupee Account (NRO account) : Funds in NRO accounts can only be used for local payment in rupees not for remittance abroad.
• Non-resident (Non-repatriable) Rupee Deposit accounts (NRNR accounts) : NRIs can open NRNR accounts from their existing NRE/FCNR deposit accounts through normal banking channel in freely convertible currency.
• Non-Resident (Special) Rupee Accounts with banks in India : This account will have the same facilities and restrictions as are applicable to rupee accounts maintained in India by residents relating to repatriation of funds held in these accounts and/or income/interest earned on them.

NRIs and PIOs holding NRO and NRE accounts are eligible for loans/overdrafts against their fixed deposits. However, loans can not be taken for the purpose of re-lending, carrying on agricultural/plantation activities or for investments in real estate business. Funds from loans and overdrafts can be utilised by the NRIs and PIOs for investments in India on non-repatriation basis and for acquisition of immovable property in India.

NRIs and PIOs can maintain FCNR accounts in India. These accounts are unlike savings and current accounts and can only be kept in the form of 'term deposits' i.e. a deposit kept for fixed periods ranging from 6 months to 3 years. Funds in such accounts can be repatriated abroad.

There are certain agencies in India that facilitate and regulate investments by NRIs, PIOs and OCBs. They are mentioned below along with their areas of activities :

EXIM policies concerning Direct Investment Schemes for Non resident Indians (NRIs) and Overseas Corporate Bodies (OCBs) are cited below:

• Investment under Automatic Route with repatriation benefits: NRIs can invest in shares and debentures of Indian companies under Automatic Route without obtaining RBI's or Government's approval.
• Investment with Government approval: There are certain sectors that require the permission of Foreign Investment Promotion Board (FIPB) for investments by NRIs and OCBs. These investments also enjoy full repatriation benefits.
• Other investments with repatriation benefits: These include investment in domestic mutual funds, bonds and shares issued by public sector undertakings and enterprises, government securities and shares.
• Investments up to 100% equity without repatriation benefits: NRIs can invest by way of capital contribution in any proprietary or partnership concern in India provided the firm or the proprietary concern is not engaged in any agricultural/plantation activity or real estate business or Print Media on non-repatriation basis subject to certain conditions.
• Other investments by NRIs/OCBs without repatriation benefits:
• Investment in Non Convertible Debentures
• Money Market Mutual Funds
• Deposits with Companies
• Commercial Papers (OCBs are presently not permitted

Tab 5 (2) : Outline of social and educational policies

This scheme has been initiated by the Ministry of Overseas Indian Affairs, Government of India for the welfare of Indian women abroad. The scheme aims to provide financial, counselling and legal assistance to women deserted by overseas Indian spouses.
In the current year the Ministry of Overseas Indian Affairs would initially sanction Rs. 40 lakhs each to the Indian Missions in USA, UK, Canada, Australia, and the Gulf subject to review next year. Thus, in the current year the budget provision for this scheme is Rs. 2 crore.

The scheme would be available to the women who have been deserted by their overseas Indian spouses or are facing divorce proceedings in a foreign country subject to the following conditions :

1. The woman is an Indian passport holder.
2. The marriage of the woman has been solemnised and registered in India.
3. The woman is deserted in India or after reaching abroad within two years of the marriage.
4. Divorce proceedings are initiated within two years of the marriage by her overseas Indian spouse.
5. An ex-parte divorce has been obtained by the overseas Indian spouse and a case for maintenance and alimony is to be filed.
6. The scheme would not be available to a woman facing criminal charges or having a criminal case decided against her.
7. The domicile of the woman seeking relief under the scheme is not relevant for allowing the benefit. The woman may be domiciled in the country of her overseas Indian spouse or in India at the time of making the application.
8. Preference may be given to applicants on the basis of financial needs.
9. Assistance will be limited to meeting initial cost and incidental charges for documentation and filing of the case by the Indian women’s organisation/NGO on the woman’s behalf.
10. The assistance will be limited to US $1000 per case and will be released to the Indian community organisations/NGO concerned to enable it to take steps to assist the woman in documentation and preparatory work for filing the case.
11. The women’s organisation/NGO will make efforts to enlist community advocates, preferably women advocates, to extend further legal assistance/ appearance in court etc on a pro-bono basis.

In case of assistance or filing complaint against the exploitation at the hands of their husbands or in-laws, Indian women overseas can contact Indian Missions in the country where they are residing. Indian Women's organisations, Indian Community Associations, and NGOs abroad can also be contacted by the Indian women. These organisations provide legal aid to the victims in distress and whose names have been approved by the Ministry of Overseas Indian Affairs.  The applications for providing legal aid received by the Missions would be examined by an officer designated by the Head of the Mission on case-to-case basis and approved by Head of Mission/Deputy Chief of the Mission.

DASA stands for Direct Admission to Students Abroad. This Government of India has designated the Educational Consultants of India Limited (Ed.CIL) as the coordinating agency for carrying on the DASA Scheme. Under this scheme, deserving foreign nationals/ Persons of Indian Origins (PIOs) and Non-Resident Indians (NRIs) are given direct admission to undergraduate Programmes offered by the National Institutes of Technology and other centrally funded institutes (other than IITs) and Punjab Engineering College, Chandigarh.

Through this scheme, the Government of India aims to provide quality education to the children of overseas Indians in the field of Engineering and technology.

Other centrally funded Institutions:

Other Institution: