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OIFC Deloitte Publication for Returning Indians

Oct 25, 2014

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akalikar

Confederation of Indian Industry

Returning Indians All that you need to know

Knowledge Partner

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Table of contents

Message Preface Executive summary Introduction: all the basics, covered Scope and coverage Classification of returning Indians Purpose of movement Preparing for the move what you need to know before moving in India Landscape Lifestyle Social security Insurance schemes Investment avenues Taxation system in India Forms of self-employment/business Banking in India Remittances outside India Rules specific to NRI/PIO Case Studies Key aspects once you make your decision Welcome to India Work permit and visa Movable asset rules Trailing tax and social security issues Case studies - Tax Case studies Social Security Schemes for Overseas Indians Central Government initiatives Government of Assam Government of Bihar Government of Gujarat Government of Karnataka Government of Kerala Government of Odisha Government of Rajasthan Appendix Frequently asked questions A. TAX B. FEMA C. SOCIAL SECURITY D. IMMIGRATION Useful websites About Ministry of Overseas Indian Affairs About Confederation of Indian Industry About Deloitte About OIFC Key contacts

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Returning Indians All that you need to know | 3

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Message

Dear Friends, Greetings to all of you! I am pleased to know that the Overseas Indian Facilitation Centre (OIFC) has taken the initiative to bring out a publication, which would illustrate the policies, procedures, case studies and the opportunity areas of investments into India from the perspective of Returning Indians. During my interactions with my Overseas Indian friends on various occasions, some of whom are considering moving back to India, I have felt that uprooting a family is a very complex decision. Many questions haunt their minds which city to move to, what job to take, the decision to start a business, schooling for kids and more. I hope this new publication Returning Indians - All that you need to know will address the questions of Returning Indians and prove to be a useful repository of practical information.

Vayalar Ravi Minister of Overseas Indian Affairs

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Preface

Greetings! On the occasion of the Tenth Pravasi Bhartiya Divas Convention 2012, it gives us great pleasure in bringing out Returning Indians - All that you need to know, a one point reference book for those seeking to return to India. The Ministry of Overseas Indian Affairs (MOIA) is the nodal Ministry for all matters relating to overseas Indians and also handles all aspects of emigration and the return of emigrants. Returning Indians are sometimes intimidated by their new surroundings and require credible support for their basic queries such as what they can bring back to India; pension and social security concerns; taxation matters; what bank accounts they can operate and more. The Overseas Indian Facilitation Centre (OIFC) set up by the MOIA in 2007, in partnership with the Confederation of Indian Industry (CII), is a special purpose vehicle of the MOIA which provides facilitation services to overseas Indians, especially for their economic engagement with India.

With credibility extended under the umbrella of the Government and an institutional industry chamber, coupled with the support of a network of subjectmatter experts, Indian states, Indian missions and Indian diaspora associations, the Centre addresses the queries and concerns of returning Indians, making it easy for them to return to India. I hope that returning Indians will find this reference book a useful guide in their quest for information about the regulatory and practical dimensions in India. We are grateful to Honble Minister of Overseas Indian Affairs Shri. Vayalar Ravi, for his encouragement and guidance in bringing out this book. We also place on record our appreciation for the contribution made by Deloitte Touche Tohmatsu India Pvt Ltd, OIFCs knowledge partner, for this publication.

Parvez Dewan Secretary, MOIA and Chairman, OIFC

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Preface

Greetings to all of you! Recession and uncertainties in the regions with large concentration of Indian diaspora population and emerging opportunities in India together have created a growing possibility of reverse migration. Increasingly, Indians abroad see the move to India, at this point in time, as a way to have the best of both worlds. With rapid growth and development, the basic amenities that they are used to in overseas like access to world-class healthcare, international schools, availability of global brands, high quality housing are now available in India. Work experience in India is valued, as having relevant exposure in a growing and developing country adds weightage to your resume. Adding to this, the proximity you can have with your family, relatives and friends are winning propositions.

Confederation of Indian Industry (CII) has been privileged to incubate and support the Overseas Indian Facilitation Center (OIFC), in a Public Private Partnership mode, with the Ministry of Overseas Indian Affairs (MOIA). The OIFC has been playing a proactive and pivotal role in expanding the economic engagement of overseas Indians with India. I hope OIFCs upcoming publication Returning Indians - All that you need to know, with Deloitte Touche Tohmatsu India Pvt Ltd as its Knowledge Partner, will be a useful guide for those Indians who seek to return to India.

Chandrajit Banerjee Director General, CII and Co-Chairman, OIFC

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Executive summary

With a 1.21 billion population one can safely say that there is a bit of India everywhere in the world! India has a considerable population overseas, especially in the USA, the UK, the Middle-East, Australia and Canada. Over the years, Indians have established themselves in their adopted countries and have earned respect through their hard work, dedication, achievements and contributions to society. In recent years, however, an interesting trend has emerged. The oft-heralded term of brain-drain, used to describe talented Indians migrating overseas has seen a balancing force in many overseas Indians opting to return home. Indias growth story, booming opportunities along with focused liberalization measures adopted by the Government have resulted in a large number of foreign corporates setting up operations in India. The decision to move to India may be an emotional one inspired by the need to return to ones roots or a rational one, determined by career opportunities. In both circumstances, it is absolutely essential to be completely aware of the facets of the new environment that one is moving to. Returning Indians has been developed keeping all aspects that would impact an Indian wanting to return home. From the rules and regulations to softer aspects like culture, Returning Indians is the single publication that a returning Indian can refer to for guidance. The publication has been divided into four broad heads for simplicity and convenience. The first part serves as a general introduction and focuses on the scope

and coverage of the publication along with definitions for NRI, OCI and a comparative analysis of the same. The second section is sub-divided into two broad chapters. The first chapter is an overview of the Indian landscape which includes lifestyle, investment avenues, taxation and banking systems. The second chapter in the second section focuses on rules specific to NRIs/ PIOs. A significant and often common area of concern relates to the social security system in India. The US, UK and many European nations, for example, have very developed social security systems in place and Indians typically have queries about the corresponding system, rules and regulations here. These have been explained and examined in this chapter. Finally made the decision to come back to India? The third section gives a preview of the significant steps that need to be taken before you can travel to India. This section will cater to your requirements once you have decided to return to India and zeroed in on your destination city. If you have spent considerable time overseas, you may have trailing issues relating to tax and social security even after you return to India. This section analyses possible issues that you may face together with detailed illustrations. The fourth and last major section of the publication is a brief narrative of the schemes and measures undertaken by the Central and OIFC partner State Governments for the welfare and growth of the overseas Indian community. We hope that you will find all the information given useful and insightful.

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Indians abroad see the move to India, at this point in time, as a way to have the best of both worlds. With rapid growth and development, the basic amenities that they are used to overseas like access to world-class healthcare, international schools, availability of global brands, high quality housing are now available in India.

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Introduction: all the basics, covered

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www.mha.nic.in If the person is in India on long term visa of more than one year, he can apply to the specified FRRO or the Joint Secretary (Foreigners) MHA If the applicant is in India, he/she can apply to the specified FRRO or to the Under Secretary, OCI Cell, Citizenship Section , Foreigners Division, MHA

This introduction will dovetail into all the basic details. We will discuss: our motivations to develop this publication, extent of coverage, who the intended target audience is classification categories for returning Indians Scope and coverage Re