When and who is permitted to open a RFC account?

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When and who is permitted to open a RFC account?
Resident Foreign Currency (RFC) was first introduced in the year 1992. In this scheme, any person can open an RFC account provided:

* The person is Indian citizen or of Indian origin.

* The person is residing abroad for more than a year continuously and then is residing in India on or after April 18, 1992.

So, a RFC account can be opened as well as maintained by a person who previously used to live abroad but moved back to India. A person can maintain the account in any convertible currency. However, for convenience the account can be maintained in major currencies.

Currencies in which RFC account can be maintained

RFC account can be maintained in the following major currencies:

* US dollar.

* Great Britain Pound.

* Euro.

* Australian Dollar.

* Canadian Dollar.

* Japanese Yen etc.

Types of account

An RFC account can be opened either as single or jointly. A person can maintain an RFC account in three forms:

* Current account.

* Savings account.

* Term Deposits.

Benefits of RFC Account

The account benefits people who spent a considerable time abroad and then returned to India for a longer period of time.

Click here to read Treatment of FCNR and NRE deposit accounts when NRIs return to India.

Documents required to open RFC Account

Documents required to open an RFC account include:

1. Copy of all pages of passport and expired Visa (to prove that customer enjoyed NRI / PIO status in the past)

2. RFC declaration form duly signed and filled

3. Copy of any one of the following as address proof :

* Utility bill

* Driving License

* Residence Permit

* Credit Card bills

* Rent receipt

* Bank statement from Overseas or Indian branch

Tax implication

Interest credit on RFC is taxable. However, TDS exemption can be claimed on interest earned provided the person declares himself RNOR (Resident but Not Ordinary Resident) at the start of the year.

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Story first published: Tuesday, June 17, 2014, 10:35 [IST]
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