
The transfer of funds/income by NRI (Non-Resident Indian) or PIO (Person of Indian Origin) from the balances held in their Non Resident (Ordinary) Rupee account (NRO a/c) to his/her Non Resident External account (NRE a/c)or overseas bank account is termed as Repatriation.
- Sources of Assets/Funds held in India by NRIsor PIOs:
- Assets/Funds held when they migratedfrom India; or
- Inheritance of Assets/Funds; or
- Assets/Funds arising out of overseas remittances made to India for investment purpose or otherwise; or
- Income earned on such Assets/Funds held in India.
Over the years, the Indian Government has substantially liberalized remittances of income and assets.
- What and how much NRIs/PIOs are permitted to Repatriate from India?
- Current Income:
Income in the nature of salary, pension, dividend, interest, rent, distribution from any type of deposits, investment, or properties including profits from proprietorship or partnership business is permitted for repatriation.
- Sale Proceeds of Assets (other than Immovable Property):
NRIs/PIOs are eligible to remit an amount upto USD One Million per Financial Year, out of:
- Balances held in NRO account,
- Sale proceeds of assets (inclusive of assets in India acquired by way of inheritance/legacy or under deed of settlement by parents or specified relative)
- Sale Proceeds of Immovable Property:
- Property acquired in Forex:
- Amount paid for acquisition of immovable property in foreign exchange received through normal banking channels or out of funds held in Foreign Currency Non-Resident account (FCNR a/c) or NRE a/c is permittedto be repatriated equivalent to the amount of forex investment.
- Residential property purchased out of housing loans and repayment of such loan is through foreign inward remittance or funds held in FCNR a/c or NRE a/c, such repayment of loan in forex is permitted to be repatriated.
- If sale proceeds are more than the amount stated in (a) or (b) above, then such excess amount is permitted to be repatriated under B i.e. upto USD One Million per Financial Year.
- Property acquired otherwise than in Forex:
Sale proceeds can be repatriated under B i.e. upto USD One Million per Financial Year.
- Property acquired in Forex:
- Current Income:
- Documentary Evidence:
The remitter of funds is required to submit following documents to AD Bank for remittance of funds to NRE a/c or overseas bank account:- Form 15CA :
- Form 15CB :
- Form A2/Outward Remittance Form in case of transfer of funds from NRO a/c to overseas bank account
- FEMA Declaration/Transfer Request in case of transfer of funds from NRO a/c to NRE a/c.
- Any other documents required by AD Bank
Undertaking by the remitter to be signed either physically or through a digital signature and submit online on the Tax Department website.
Certificate to be obtained from a Chartered Accountant confirming that applicable taxes have been paid on the remittances.
- Special approval from RBI:
RBI may approve repatriation beyond limits specified in case where hardship will be caused to a person if remittance from India is not made to such a person. Accordingly, RBI may grant permission for medical purpose, education, home purchase or similar requirements at their discretion.
- General Points:
- Repatriation of funds is subject to payment of applicable taxes in India.
- Current income earned in any year is permitted to be repatriated in the same year or in any subsequent years cumulatively.
- Balance held in NRE a/c is freely repatriable without any limit.
- Remittances from NRO a/c to NRE a/c or overseas bank account can only be done through a single AD Bank in a particular Financial Year.
- If yearly limit of USD OneMillion is not utilized, then the same cannot be utilized in subsequent years.
- Recently, RBI has instructed that gifts received from residents is permitted to be credited to NRO a/cof the NRI up to USD 250,000 only and thus in our opinion, repatriation of such receipt by NRIis indirectly limitedup to this amount.
- Foreign national of non-Indian origin (other than citizen of Nepal and Bhutan), who has retired from employment in India or who has inherited assets from a person resident in India or from a personwho had acquired such assets when he/she was resident in India or a widow who has inherited assets from his/her deceased spouse, who was an Indian citizen resident in India, is eligible to remit an amount upto USD one million, per Financial Year.
Content Partner- For any assistance / information on Tax, FEMA or related matters, you may write to our empaneled professional at nrihelp@gpkapadia.com
Checkout various options for NRIs to invest in India