NRI banking and investing in India

Q1. Which statement best describes “NRI”?

1. Funds in an NRO account can be repatriated abroad up to a yearly limit, currently one million US dollars per financial year, subject to conditions and documents.
2. A non-resident Indian is an Indian citizen who lives outside India for work, business or other reasons that suggest a long stay abroad.
3. An NRE account is a rupee account for money earned abroad. Balances and interest are freely repatriable, and the interest is generally tax-free in India.
4. A double taxation avoidance agreement is a treaty between two countries that prevents the same income from being fully taxed in both.

Q2. Which statement best describes “NRE account”?

1. The Portfolio Investment Scheme lets NRIs buy and sell shares on Indian exchanges through a designated bank account approved by the RBI.
2. An NRO account is a rupee account for income earned in India, such as rent or dividends. Interest is taxable and repatriation is limited to set annual amounts.
3. FATCA and CRS are reporting rules under which financial institutions collect and share account details of foreign tax residents with tax authorities.
4. An NRE account is a rupee account for money earned abroad. Balances and interest are freely repatriable, and the interest is generally tax-free in India.