As per the provisions of Schedule 1 of the FEMA of the Foreign Exchange Management (Deposit) Regulations, 2000, and other relevant notifications, the following are the permissible credits into the NRE accounts:
- Proceeds of remittances to India in any permitted currency
- Proceeds of personal cheques drawn by the accoutn holder on his foreign currency including instruments expressed in Indian Rupees for which reimbursement will be received in foreign currency , deposited by the account holder in person during his temporary visit to India, provided
i) the authorised dealer/bank is satisfied that the account holder is still resident outside India;
ii)the traveler's cheques/drafts are standing/endorsed in the name of the account holder and
iii) in the case of traveler's cheques , they were issued outside India.
Please note that the proceeds of travler's cheques surrendered to a Money Changer would not be eligible to go to the credit of the NRE account.
- Proceeds of foreign currency/ bank notes tendered by account holder during his temporary visit to India, provided
- the amount was declared on a Currency Declaration Form (CDF), where applicable* and
- the notes are tendered to the authorised dealer in person by the account holder himself and the authorized dealer is satisfied that account holder is a person resident outside India.
Please note that the proceeds of foreign currency surrendered to a Money Changer would be eligible to go to the credit of the NRE account only if the encashment certificate is issued by AD Category – I / Category – II money changer. The updated list of Authorized Dealer –I and Authorized Dealer – II entities is available on the RBI website (http://www.rbi.org.in/Commonman/English/Scripts/AuthorizedDealers.aspx)
* A CDF is required only where the foreign exchange in the form of currency notes, bank notes or traveler’s cheques brought in by a person at any one time exceeds US$ 10,000 or its equivalent and/or the aggregate value of foreign currency notes brought in by such person at any one time exceeds US$ 5,000 or its equivalent.
- Transfers from other NRE accounts
- Interest on Government securities and dividend on units of mutual funds, provided the securities/units were purchased by debit to the account holder's NRE/FCNR account or out of inward remittance through normal banking channels.
- Current income such as rent, dividend, interest including NRO interest, pension etc. from India
Please note that in this context, current income has to be understood as being distinct from income arising on sale of assets such as shares, immovable property etc. Hence, capital gains on sale of shares, immovable property etc. are not covered by this clause.
- Maturity proceeds of Government securities including National Plan/ Savings Certificates, bonds issued by a PSU in India as well as proceeds of Government securities and units of mutual funds sold on a recognized stock exchange in India and sale proceeds of units received from mutual funds, provided the securities/ units were originally purchased by debit to the account holder’s NRE/ FCNR account or out of remittances received from outside India in free foreign exchange.
- Refund of share/ debenture subscriptions to new issues of Indian companies or portion thereof, if the amount of subscription was paid from the same account or from other NRE/ FCNR account of the account holder or by remittance from outside India through normal banking channels.
- Refund of application/earnest money/ purchase consideration made by the house building agencies/seller on account of non-allotment of flat/ plot/ cancellation of bookings/deals for purchase of residential/commercial property, together with interest, if any (net of income tax payable thereon), provided the original payment was made out of NRE/ FCNR account of the account holder or remittance from outside India through normal banking channels and the authorized dealer is satisfied about the genuineness of the transaction.
For these cases we will need letter from the builder and proof of original debit to be submitted by the customer.
- The balances in the EEFC, RFC and RFC (D) accounts, at the option/ request of the account holders, consequent upon the change of their residential status from resident to non-resident.
- Payments received from rupee vostro accounts of Exchange Houses towards cross –border inward remittances sent by NRIs into India under Rupee Drawing Arrangements (Report Code: A1VOS)
- Proceeds of Life Insurance policies denominated in foreign currency or the rupee policies for which premia are paid in foreign currency or out of NRE/FCNR Accounts
- Sale proceeds of immovable property other than agricultural land / farm house / plantation property in India by a NRI or PIO, where the said property has been acquired through payment in foreign exchange received through normal banking channels / out of funds held in NRE / FCNR accounts and in case of residential property, the repatriation of sale proceeds is restricted to not more than two such properties.
- Sale proceeds of shares and/or convertible debentures (net of taxes) of Indian Companies purchased by NRI customers under the Portfolio Investment Scheme (PIS)