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PIO cards: Not worth the cost

A N Shanbhag

On March 31, 1999, the government introduced PIO cards for persons of Indian origin having foreign passports and living abroad (in specified countries).

The benefits

** No visa required for visiting India during the validity period of the card. This exemption includes "student visa" or "employment visa" required for admissions in colleges/institutions or for taking up employment, respectively.

** Exemption from the requirement of registration if the stay on any single visit in India does not exceed 180 days. In the event of continuous stay in India exceeding 180 days, the PIO card holder has to get registered within 30 days of the expiry of 180 days. This registration is valid up to the validity of the visa in the case of NRIs and the validity of PIO card in the case of PIOs.

** Special counters at the immigration check posts for speedy clearance.
Parity with:

• NRIs in respect of facilities available in the economic, financial and educational fields;
• NRI quotas under the various housing schemes of LIC, state government and other government agencies;
• Children of NRIs for getting admission to educational institutions in India including medical colleges, engineering colleges, institutes of technology, institute of management, etc, under the general categories;
• NRIs in respect of all facilities in the matter of acquisition, holding, transfer and disposal of immovable properties in India except in matters relating to the acquisition of agricultural/plantation properties.

** No parity shall be allowed in the sphere of political rights.

Where to apply

An application for the issue or renewal of the card can be made in the prescribed form accompanied with the fee and documentary evidence to show that the applicant is a person of Indian origin as defined.

These forms can be obtained from the office of the Indian embassies or Indian missions in the country where the applicant is an ordinary resident.

A PIO card is valid for 15 years from the date of issue, subject to the validity of the applicant's passport.

Now, the cost

The card attracts a fee of Rs 15,000 for adults and Rs 7,500 (or its equivalent in forex), for children up to 18 years of age.

Prior to June 11, 2002, the fee was $1,000 for adults and $500 for children. They were valid for a period of 20 years. Those who have been issued cards prior to this date, will continue to remain valid and no refund will be paid.

However, the validity of such cards can be extended by 10 more years without charging any additional fee. Earlier, if the application was rejected, half the fee was refundable.

The current notification is silent about refunds in the case of rejections.

Gratis PIO card

A gratis PIO Card may be issued to an exceptionally eminent person of Indian origin who plays an important role in building bridges between India and the country of his/her adoption, if he/she expresses a desire to obtain the PIO card.

If you lose it?

On a request supported by the FIR and other documents, a duplicate PIO card can be issued on depositing a fee of $100.

Duplicate PIO cards will be issued by the same office that issued the original one.

Not beneficial

The card was not popular because the fee was considered to be very stiff. All said and done, in practice, it is found that these PIO cards are not as beneficial as they are claimed to be.

The only benefit is the exemption of visa and the registration requirement for a stay of less than 180 days. If you look at the rest of the advantages, you will find that the PIOs do have parity with NRIs in any case.

I strongly feel that even the reduced cost of Rs. 15,000 does not justify the benefit.

Inherited house

Now, allow me to switch to a subject not directly related with the PIO card but of great importance to all the NRIs and PIOs.

Circular 1, dated July 2, 2002 has given powers to authorised dealers to allow repatriation of funds up to $100,000 per year, representing sale proceeds of immovable property, held by them for not less than 10 years subject to payment of applicable taxes.

AP (DIR) Circular 19, dated September 12, 2002 permits ADs to repatriate up to $100,000 per calendar year out of the assets in India acquired by way of inheritance/legacy for NRIs/PIOs.

The same benefit is extended to foreign nationals (other than citizens of Nepal and Bhutan) including retired employees or non-resident widows of Indian citizens.

In case the remittance is to be made in more than one installment, the remittance of all installments should be through the same AD.

Normally it is a financial year but some of the rules are related with calendar year adding to the confusion.

Now comes my difficulty. What if an NRI/PIO inherits a residential property?

The circular related with inheritance/legacy has been issued after the first circular related with immovable property and therefore can I assume that it overwrites the first circular when an NRI/PIO comes to possess a residential property by way of inheritance?

In other words, does the requirement to hold the immovable property for a minimum period of 10 years become redundant under such a situation? If the answer is in the negative, is the holding period counted from the date of acquisition of the property by the deceased person?

While observing that a clarification from RBI is necessary, can I hope for the authors of legislation being a little more careful in their drafts to ensure that subsequent clarifications become unnecessary.

One more point. RBI had issued a press note on September 12, 2002 declaring that in order to facilitate setting up base abroad, it has enhanced the repatriation limit to $25,000 to residents who have obtained emigration visas. The required notification has yet not been issued.

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