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Month: August 2019

NRI Denied Occupancy Certificate for Rule Violation
NRI Denied Occupancy Certificate for Rule Violation

NRI Denied Occupancy Certificate for Rule Violation

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The Case:

An NRI, non-resident of India, committed suicide for not getting an occupancy certificate. The Anthoor Municipality rejected his application, as there were potholes and violation of construction rules in the plan. The State government on Wednesday informed the Kerala High Court about it.

However, the State government submitted this case in a suo moto. It decided to raise the banner against red-tapism in Municipal Corporation of Anthoor. This action trailed the initiative taken by the High Court upon learning about that suicide case of the NRI.

What the Government Says:

The government cleared its stand by revealing the pan incident. It pointed out that the building plan was squarely changed when it came to claiming occupancy certificate. In short, the Municipality was served by a completely new plan later. This plan had many flaws if you check it in the scope of construction norms. Earlier, it was submitted for Group D assembly building. The competent authority could not nod for such a defective plan.

As far as the red-tapism is concerned, the government claimed that it had taken comprehensive steps to prevent it. It follows a legal hierarchy of rules to grant building permits and occupancy certificates.

The occupancy certificate is a legal proof, issued by a local government agency or planning authority. Generally, it is issued post completion of construction of a new project. It certifies that the project has been accomplished, while sticking to the applicable building codes, regulations and laws.

Digital Assistance:

The Municipality had already deployed software to look into issuance of permits and certificates. Placing the software is a crucial step to get off hassles in obtaining building permits and occupancy certificates. In fact, the authority had stringently ordered to follow an order fixing time limits, be it for approving a building plan, its inspection and the occupancy certificate.

A Mandate:

Now, the government has made it mandatory to issue the construction permit within 45 days. Besides, the occupancy certificate must be issued within seven days upon inspection of the completed infrastructure.

Benefits of NRI Investment Services To Maintain PPF Account
Benefits of NRI Investment Services To Maintain PPF Account

Benefits of NRI Investment Services To Maintain PPF Account

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A non-resident can be trapped in several doubts regarding PPF account. Certainly, it measures a big share of your hard-earned money, which you never want to give up. Being an NRI, you cannot stay tuned with every update or amendment in investment schemes. But, the one providing with NRI investment services can play the role of an assistant. He acknowledges about all amendments in the investment policies.

Being one of them, I’ m sharing amendments in the PPF account eligibility and its maintenance in India through this blog.

Can NRIs contribute to the existing PPF account?

This is the very first question that grips your mind subsequent to changing status from a resident to non-resident of India. It is an outcome of the fear to lose the invested money in the PPF account.

This fear was certain to spring up. The Department of Economic Affairs (DEA) has announced in October. It states that the one who opened this account as a resident and later, changes into a non-resident, his PPF account shall be deemed to be closed. The closure will be effective from the day he becomes a non-resident.

Later on, the DEA had to amend this policy. An office memo was released on 23rd February, 2018 in the scope of NRIs PPF a/c. However, it has a crystal clear barring message for non-residents that they cannot be able to open it.

The office memo added a little twist in it, stating that the one who opened it before becoming a non-resident can continue to run it till maturity, i.e. 15 years.  But, such people won’t be able to extend it. On the flip side, the residents will have a leverage to carry on this investment in the block of five years.

What happens if an NRI open PPF account?

First and the foremost thing to consider is that this account is not meant for emigrant Indians. The DEA has decided to take a ‘U’ turn in 2017 that stuck to barring NRIs from this investment scheme. It clearly stated these norms:

  1. NRIs cannot open a new PPF account.
  2. They can maintain their existing PPF account and will continue to get the same interest rate as the citizens get.

Erstwhile, the penultimate amendment pushed several non-residents to close their account. The government was firm to release interest on it at 4%, which was less than the previous interest rate.

Why did the government introduce review of these rules between Oct., 2017 and Feb., 2018?

The good rate of return attracted Indian diaspora in abroad. They often planned to get the interest rate, which touched 7.8 % in the beginning. Also, this is the safest NRI investment plan wherein fraud probability is zero.

They opt for it as the best retirement plan. Upon serving abroad for 10 to 15 years, they think about resettlement in India and look for its extension. There were none of the schemes, apart from this, that ensured a fixed high return, unlike NPS investment, without any volatility. However, mutual funds are good to invest in. But, the interest consistently fluctuates, depending on the market stock performance of the company’s equity.

Can he maintain PPF account in India?

Now, the NRI PPF Rules, 2019 are introduced. Let’s get through what it iterates in the layman’s words:

  • The PPF is a 15 years scheme.
  • It can be extendable beyond 15 years in blocks of 5 years any number of times.
  • But, non-residents cannot extend it beyond 15 years.
  • With just INR 500, this account can be operational.
  • Now, the interest rate will be subjected to review and reset every quarter.
  • Partial withdrawal can be made after 7 years from this account.
  • This account can be closed before maturity, but only after 5 years, under certain conditions.
  • The account holder can avail a loan between 3rd and 6thfinancial year. It is simply because there is an option of partial withdrawal from 7th

Can a non-resident claim for PPF deduction?

The amount you invest in this scheme is taxable under Section 80C. But, you can earn tax-free returns on maturity, but only if it matures while being in India. This is why it is the foremost choice of expats from India.

If it attains maturity when you’re abroad, the rule of taxability will differ. You might have to declare the amount in the current residence country. The country will levy appropriate tax on it. In short, this scheme is tax free under certain terms and conditions.

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