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NRK Sandesham

Wherever you go we are there . . .

A monthly news letter from, NRI Services, State Bank of India, Local Head Office, Trivandrum : nri.lhotri@sbi.co.in : 0471 2336383, 6549966 : + 91 9447778606 Volume: III Issue No. : 6
Team Leader:
Shri. Akella.V.Prasad, DGM (PBBU & NRI)

Our Editorial Team: Shri. George John - Chief Manager Shri Lalson Jacob - Assistant Vice President (PBBU) September 2013

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Recent developments
Chief economic advisor Raghuram G Rajan, a former International Monetary Fund (IMF) chief economist and Chicago University professor famed for his perceptive warnings about the global financial crisis of 2008, will become one of the youngest governors of the Reserve Bank of India (RBI), when he takes charge on 5th September 2013. Deregulation of Interest Rates In a bid to attract foreign currency, the Reserve Bank deregulated interest rates on NRI fixed deposit schemes (FCNR, NRE) and exempted such term deposits from CRR and SLR requirement. These instructions will be valid up to November 30, 2013, subject to review. SBI expects Rs 4,000 crore in capital infusion After the finance ministry announced it intended to complete the state-run banks' recapitalisation effort by September, State Bank chairman Pratip Chaudhuri has said he expects Rs 4,000 crore infusion.
SBI have opened 15,000th Branch in Sooranam (TN) on 17th August 2013 by Shri P. Chidambaram, Hon'ble Union Finance Minister. SBI has also opened a new Branch in Seoul thereby making 189 foreign offices in 35 countries.

the same time ease pressure on the domestic currency, which has been touching new lows over the past couple of months. The proposal will also help companies gain access to othermarkets at a time when the domestic stock market is witnessing massive sell-offs. The government reduced the import tariff value of gold to $458 per 10 grams due to fall in its global prices. It also cut the import tariff value of silver to $783 per kg. Earlier, tariff value - the base price on which the customs duty is determined to prevent under-invoicing of gold and silver stood at $461 per 10 grams and $803 per kg, respectively RBI relaxes PIS for NRIs In order to attract inflow of foreign currency, the RBI on Tuesday simplified rules governing investments by nonresident Indians (NRIs) portfolio investments like equities and debt. RBI has now dispensed with the unique code for branches and said banks shall be "free to permit its branches to administer the PIS scheme for NRI. The designated branch of the bank will grant one time permission to the NRI applicant for purchase and sale of shares or convertible debentures of an Indian company, RBI said in a notification. Shares or debentures purchased will be held and registered in the name of the NRI.

List of Newly opened SBI Branches in Kerala

No. 1 2 3 4 5 6 7 Branch Name PBB Ottapalam Chingavanam Ponkunnam Puthiyakavu YMCA Junction NRI Kottakkal Thykoodam District Palaghat Kottayam Kottayam Kollam Ernakulam Malappuram Ernakulam email id sbi.16570@sbi.co.in sbi.16823@sbi.co.in sbi.16824@sbi.co.in sbi.16827@sbi.co.in sbi.30473@sbi.co.in sbi.16070@sbi.co.in sbi.16074@sbi.co.in

Government looking at allowing unlisted Cos to launch IPOs overseas Faced with the sliding rupee, the government is considering allowing unlisted companies to launch public offers in overseas markets and raise funds in foreign currency. Under the current norms, only those companies that are listed on the domestic stock exchanges are permitted to list on bourses overseas. The move is expected to help the companies meet their foreign exchange requirements and at


TAXABLE INCOME: A person who is non resident is liable to tax on that income, only which is earned by him in India. i.e Income is directly or indirectly earned in India or construed to be earned in India. Non resident, having annual taxable income in India more than Rs 2,00,000 should pay tax. The return can be filed in the ITR applicable for the purpose. NRIs must also obtain Income Tax PAN number not only for filing Income Tax Returns, but for many other purposes also. For taxation purposes of NRIs , there is no differentiation between Senior Citizen and normal individual, irrespective of their ages NRIs basic tax exemption limit is Rs 2,00,000 TAX EXEMPTION: Income from the following investments made by NRIs/PIOs out of convertible foreign exchange is totally exempt from Tax: Deposits in NRE account and Foreign Currency Non Resident (Bank) account (FCNR account). In this context it should be noted that the tax exemptions relating to NRE bank deposits will cease immediately upon the NRI/PIO becoming a resident in India whereas the interest on FCNR Bank deposits will continue to be tax free as long as the NRI maintains the status of Resident but not Ordinarily Resident or until Maturity. Units of specified Mutual funds, other specific securities, bonds and savings certificates. Dividend declared by Indian Company. Long term capital gains arising from transfer of equity shares in a company and for equity oriented schemes of Mutual funds, which are subject to Securities Transaction Tax. Long term capital gain on sale of bonds, mutual fund schemes other than equity will be taxed at % with indexation benefits and 10 % without indexation benefits. Short term capital gains will be added to the total income and tax needs to be paid at the applicable tax slab which the NRI belongs. NRI Meet, Pathanamthitta ( 10th August 2013) TAX DEDUCTION AT SOURCE: TDS will be deducted only on those incomes of Non Resident Indians (NRIs) which are liable to tax in India. If the income is tax free in India like long term capital gains from equity shares, there would be no TDS. 1. Bank Deposits The interest earned only on NRO deposits (SB, FD and RD accounts) is taxable at source at a flat 30 percent plus cess irrespective of the interest amount. Unlike Resident Indians, NRIs cannot submit the Form 15H and 15G for getting exemption from TDS. NRIs can only avail the benefit of lower TDS rate under the respective DTAA (Double Taxation Avoidance Agreement) by submitting the declaration form and Tax Residency Certificate to the banker within the specified time limit of the respective financial year. 2. Interest on all other investments Onam Celebration at NRI Trivandrum Branch Interest earned on all other investments like corporate deposits and bonds will be subject to TDS at 20% . In all these cases, the company or party making the payment will deduct this tax. 3. Capital gains on securities Short term capital gains, that is, profits on sale within one year of date of purchase, will besubject to a TDS of 15 per cent. 4. Debt mutual funds, corporate debentures Long term capital gains from debt mutual funds and corporate debentures (when sold in the secondary market) will be subject to TDS at 10 per cent. Short term capital gains will be subject to a TDS of 30 % 5. Capital gains on other assets like house property, gold Long term and short term capital gains will be subject to TDS of 20% and 30 % respectively. 6. Rental Income: Rental income earned in India is subject to TDS at 30 percent plus applicable tax.

TAX EXEMPTION CERTIFICATE: The rate prescribed for TDS from NRIs income is the maximum rate of tax at which the relevant income is taxable in India. However in majority of the cases, the actual tax liability will be less than this. In order to assist such a situation, the Income Tax Act has prescribed a procedure under Section 197, whereby a NRI can apply to the Income tax Assessing officer to issue a Tax Exemption Certificate , authorizing the payer of the income to deduct tax at a lower rate or nil rate as the case may be. Any NRI who has obtained Income tax Exemption certificate needs to submit it to the payer of the income who will follow the certificate and not deduct tax or may deduct at a lower rate as given in the certificate. DEEMED RENTAL INCOME: NRIs who have more than one property in India , only one property in India is considered to be self occupied and the remaining property even if it is not let out is considered to be rented out and tax is to be paid on the calculated rent amount for such properties. TAX TREATMENT OF OVERSEAS FINANCIAL ASSETS: Foreign Exchange and overseas assets held/acquired/owned by NRI while he was abroad can be continued to be so held and owned even after the NRI returns to India for permanent settlement. Such foreign exchange and overseas assets can continue to accumulate or accrue income outside India and the balances can be utilised for reinvestment or repatriated to India (without attracting Wealth Tax ) at any time within 1 year immediately preceding the date of his return or later. This exemption period is limited to 7 successive years which immediately follow the year in which the NRI permanently returns to India. Property deals This year's budget has changed the TDS laws relating to property transactions. When a resident Indian purchases a property valued at over Rs 50 lakh, he has to deduct 1% TDS and deposit it with the government. However, if the property belongs to an NRI, the TDS is 20% even if the property is worth less than Rs 50 lakh. FILING OF TAX RETURNS A NRI should file income tax returns for 2012-2013 if he fulfill either of these conditions: Taxable income in India during the year 2012-2013 was above the basic exemption limit of Rs 2 lakh OR If an NRI have earned short-term or long-term capital gains from sale of any investments or assets, even if the gains are less than the basic exemption limit. RECENT CHANGES This year, the income tax department has made two important changes that you must be aware of. These changes apply to residents as well as non residents. 1. Mandatory efile if taxable income over Rs 5 lakh If you had taxable income in India that exceeded Rs 5 lakh in 2012-13, you must efile your tax returns. You can either do it yourself using online efiling portals or take the help of assisted tax preparers. 2: Match your tax credits From this year, the Income Tax department has introduced a system by way of which you can match your income tax credits with your actual tax return. The tax credit statement is available in the form of Form 26AS.

NRI Meet Palakkad, 3rd August 2013

Try to figure out sensible letters and words, which cryptically represent a word, phrase, or saying from the following

Lateral thinking - No. 7

Answers of these ribuz puzzles will be published in the next issue Answers of Lateral thinking No. 5 from July 2013 issue

1. Six feet underground 2. Glance back 3. Tricycle

4. Reading between the lines 5. Crossroads

RATES OF INTEREST ON NON RESIDENT DEPOSITS* Non Resident Ordinary (NRO) deposit interest rates (%) (w.e.f. 31/08/2013 (% p.a.)) 7 days to 60 days 61 days to 1 year 1 year to 10 years Deposit below Rs.1 Crore 6.50 6.50 8.75 Deposit of Rs.1 Crore and above 9.00 8.25 8.75


NRE Term Deposits-Retail and Bulk Deposits (w.e.f. 01/03/2013 (% p.a.)) Interest rates (%) p.a.

1year -10 years


FOREIGN CURRENCY NON-RESIDENT DEPOSITS (FCNR(B)) (% P.A.) CURRENCY 1 year to less than 2 years 2 years to less than 3 years 3 years to less than 4 years 4 years to less than 5 years 5 years USD 2.67 2.57 3.95 4.38 4.77 GBP 2.87 2.84 4.13 4.45 4.73 EURO 2.48 2.64 3.87 4.13 4.36 CAD 3.37 3.56 4.83 5.11 5.34 AUD 4.51 4.76 6.07 6.39 6.63 JPY 2.41 2.27 3.31 3.36 3.45 CHF 2.24 2.23 3.39 3.60 3.82

w.e.f 01/09/2013 DKK 2.67 2.89 4.11 4.41 4.67 NZD 4.93 5.45 6.86 7.15 7.39 SEK 3.40 3.69 4.97 5.21 5.40

RESIDENT FOREIGN CURRENCY A/C. (RFC) w.e.f 01/09/2013 PERIOD 1 year and above but less than 2 years 2 years and above but less than 3 years 3 years only

(%P.A.) USD 2.67 2.57 3.95 GBP 2.87 2.84 4.13 EURO 2.48 2.64 3.87

Note : - Minimum Amount USD 1000 or equivalent for RFC deposits All these interest rates are subject to change, without notice . The revised interest rates are applicable only on fresh deposits and renewal of maturing deposits.

*Subject to change. Visit our website www.onlinesbi.com/nri for latest interest rates. For more details scan the QR Code below;

Savings Bank deposit interest rate (NRO & NRE) 4.00%

SBI nri Car Loans

0.75% above B.R. i.e 10.45% p.a. (for all periods) Now available as Overdraft also For New NRI Car Loans EMI per lakh = Rs.1683/- only, for a 7 year loan. (Base Rate, B.R 9.70%)

NRI Housing loan interest rates

Loan Amount UptoRs 30 lacs Above Rs 30 lacs Linkage with Base Rate over the tenure of the loan (Current B.R 9.70%) 0.25% above Base Rate 0.40% above Base Rate Effective rate 9.95% 10.10% EMI per lac (For 30 yr loan) Rs.874/Rs.885/-

Assumed Housing Loan Amount Rs. 30 Lacs EMI at the other Bank (Assumed Interest rate 10.75%) 28,863 30,457 33,629 EMI at SBI (Interest rate 9.95%) 27,155 28,851 32,146 Savings per month 1,708 1,606 1,483 Savings due to reduction in EMI over total tenure 5,12,400 3,85,440 2,66,940 Interest income on account of deposit of the difference in EMI as RD 12,45,469 6,21,053 2,70,497 Total Gain on account of switchover to SBI Home Loan 17,57,869 10,06,493 5,37,437

Period 25 yrs 20 yrs 15 yrs

Interested send an email to us. We will be reaching you.

NRI Palakkad Branch

Dear Sir/Madam, Palakkad is the gateway to Gods own country Kerala, situated at the foot hills of the western ghats, and State Bank of India the banker to every Indian is proud and privileged to have its NRI branch in this district with excellent ambience, state of the art facilities and adequate car parking facilities. NRI branch Palakkad is functioning at Robinson Road, Palakkad since November '2010 and is catering to all the needs of NRIs as a financial supermarket, right from extending loans, locker facilities, Foreign Currency deposits and to investments related advises in mutual funds, Sbi Life Insurances etc. The branch is also provided with a dedicated Relationship Manager(NRI Services) extending personalized services to our valuable NRI clients, and the experienced staffs who are exclusively hand picked for this branch believes in building relationships and ensures a very pleasant banking experience of international standards to one and all. Our contact details : email: sbi.14465@sbi.co.in NRI Branch Palakkad, Opp to Robinson Memorial Church, Robinson road, Palakkad-678014. Relationship Manager (NRI): Ms. Sandhya Devi P M, Mob: +91-9497718955, +91-491-2501242

Ramesh Kumar. N Branch Manager Mob: 9447588511 NRI Palakkad Branch

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Your Feedback is important to us.

We cordially invite your suggestions and views to improve our products and quality of services. Please write to Shri. George John NRI Nodal Officer, at nri.lhotri@sbi.co.in . Please also visit exclusive portal of our Bank for NRIs at www.onlinesbi.com/nri for more information on our products and services. Disclaimer: This Newsletter has been brought out with the sole intention of disseminating useful information to NRIs and does not purport to be a legal document or a solicitation. In case of any variation between what has been stated herein and the relevant Acts, Rules & Regulations, Policy Statement, Banks instructions. etc, the latter shall prevail.

In the coming issues . . . Investment Services Health tips Cross words NRI Quiz