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February 18, 2000

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"Can I sell my stock options in a company listed in India and repatriate the money to the US?"

The Rediff Money Channel presents everything you wanted to know about personal banking, but didn't know whom to ask. Kannan Ranganathan, who has over ten years of experience in banking and financial services, is here to remove all your doubts.

Readers Note: Please keep your questions short.

I am a non resident Indian. I have an NRE account in India and I am using the cash in it to buy a flat. If I sell the flat in the future, will I be able to repatriate the money abroad? How can I use my repatriable money to make a repatriable property investment in India?

— Ravi Mantha

Repatriation is permitted for properties purchased on or after May 20, 1993 without the prior approval of RBI provided that such a sale takes place after three years from the date of acquisition or from the date of payment of final installment of consideration amount whichever is later and repatriation is permitted to the extent of the consideration amount equivalent in foreign exchange paid for the acquisition of the immovable property sold and any excess amount of sale proceeds shall be credited to the persons NRO account with a bank in India.

I am working in an Indian software company. Recently, I have come to the US on an assignment for three months. I am on B1 visa. I was paid daily allowances for my stay in US. My Indian salary continues in India. I have managed to save money from the daily allowance. How should I get this money back to India? What are the conditions that I should fulfill to convert this money to Indian rupee and deposit it in my bank account?

— Ravindra N

Notification No. F.E.R.A.81/89-RB dated August 9, 1989 as amended up to 9th March 1999 allows you to bring foreign exchange into the country provided that you make, on arrival in India, a declaration to the Customs authorities in such form as may be specified by the Reserve Bank of India in this behalf, of the particulars of such foreign exchange brought in by him; provided further that it shall not be necessary to make such declaration where the aggregate value of the foreign exchange brought in by you in the form of currency notes, bank notes or travellers' cheques at any one time does not exceed $ 10,000 or its equivalent and/or the aggregate value of foreign currency notes brought in by such person at any one time does not exceed $ 5,000 or its equivalent. If you adhere to the limits, you do not need to fill in a Currency Declaration Form, however, it is advisable to do so in any case. You may subsequently get the forex changed at an authorised dealer in foreign exchange.

I am an NRI working in the UK for the past three years. I have a Public Provident Fund (PPF) account in India. Can I continue investing in the account? Will I have to pay any tax on the interest received?

— Yashodhan Bhatawadekar

NRIs can subscribe to PPF accounts from their non-resident accounts (NRE and NRO) in India. The maturity proceeds should be credited to the same account from which the investments were made. No tax has to be paid on the interest received.

My company recently went public in India. I work in the US office and have been granted stock options. Since the shares are only listed in India at the moment, our transactions will take place there. When I pay for the shares, I will have to pay in dollars. My question is how will I get my money back in dollars once I sell these shares?

— Sanjay Malani

Under the 24 per cent scheme, NRIs are allowed to subscribe to new issues of equity shares of existing/new companies with the right of repatriation of capital invested and income earned thereon, provided the aggregate issue of shares to such non residents qualifying for the facility of repatraition does not exceed 24 per cent of the face value of the issue. No prior permission from RBI is needed, however the concerned company will have to file declarations with the Regional Office of RBI within 30 days. No separate permission by the NRI is necessary. Funds must be provided by a fresh inward remittance or from NRE/FCNR account of the investor.

Earlier:

"How can my sister in the US repatriate her family pension from India?"

"For how long can I continue my NRE account after I return to India?"

"What is the cheapest way to send money to my parents in India?"

"How can I ensure that I earn the maximum possible interest on my deposit while ensuring that I can make withdrawals when I want?"

Personal Banking Center

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