The Foreign Exchange Management Act (FEMA) regulates all inbound and outbound currency flows, foreign assets, bank accounts, and investments of residents and non-residents. FEMA rules are strictly monitored, and violations can result in heavy penalties (up to three times the amount involved).
For instance, upon becoming an NRI, it is legally mandatory to designate your existing savings accounts in India to **Non-Resident Ordinary (NRO)** accounts, and your fixed deposits must be converted. Acquiring agricultural land, plantation property, or farm houses in India also has strict FEMA constraints.
No, under general FEMA permissions, NRIs/OCIs are strictly prohibited from buying agricultural land, plantation property, or farmhouses. However, they can inherit them.
NRE (Non-Resident External) accounts hold foreign earnings and are fully repatriable and tax-free in India. NRO (Non-Resident Ordinary) accounts manage Indian-sourced income (e.g. rent, dividends); interest is taxable, and repatriation is subject to the USD 1M limit.