Repatriation of income and assets held in India

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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.

  1. Sources of Assets/Funds held in India by NRIsor PIOs:
    1. Assets/Funds held when they migratedfrom India; or
    2. Inheritance of Assets/Funds; or
    3. Assets/Funds arising out of overseas remittances made to India for investment purpose or otherwise; or
    4. Income earned on such Assets/Funds held in India.

      5. Over the years, the Indian Government has substantially liberalized remittances of income and assets.

  2. What and how much NRIs/PIOs are permitted to Repatriate from India?
    1. 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.

    2. 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:

      1. Balances held in NRO account,
      2. 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)
    3. Sale Proceeds of Immovable Property:
      1. Property acquired in Forex:
        1. 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.

          2.  

        2. 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.

          3.  

        3. 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.

        2.  

      2. Property acquired otherwise than in Forex:

        3. Sale proceeds can be repatriated under B i.e. upto USD One Million per Financial Year.

  3. 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: 

    1. Form 15CA :

      2. Undertaking by the remitter to be signed either physically or through a digital signature and submit online on the Tax Department website.

    2. Form 15CB :

      3. Certificate to be obtained from a Chartered Accountant confirming that applicable taxes have been paid on the remittances.

    3. Form A2/Outward Remittance Form in case of transfer of funds from NRO a/c to overseas bank account

      4.  

    4. FEMA Declaration/Transfer Request in case of transfer of funds from NRO a/c to NRE a/c.

      5.  

    5. Any other documents required by AD Bank

    4.  

  4. 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.

  5. General Points:
    1. Repatriation of funds is subject to payment of applicable taxes in India.

      2.  

    2. Current income earned in any year is permitted to be repatriated in the same year or in any subsequent years cumulatively.

      3.  

    3. Balance held in NRE a/c is freely repatriable without any limit.

      4.  

    4. 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.

      5.  

    5. If yearly limit of USD OneMillion is not utilized, then the same cannot be utilized in subsequent years.

      6.  

    6. 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.

      7.  

    7. 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

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