Repatriation Of Assets

1. What is Repatriation?

Ans. 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 account) to his/her Non-Resident External account (NRE account) OR transfer from NRO account directly to his/her Overseas bank account is termed as Repatriation.


Repatriation of funds is subject to payment of applicable taxes and verification of the same is required to be done by a Chartered Accountant, as explained in the ensuing FAQs.

To understand the concept and features of NRO and NRE account, refer FAQs on the topic “Banking Accounts”

2. What are the types of income and maximum amount of income that NRIs/PIOs are eligible for repatriation?

Ans.

Sr. No

(A)

What can be repatriated (Refer Note 1)

(B)

Limit for repatriation

(C)

i)

Current Income (earned in past or present year):

Income in the nature of dividend, interest, rent, salary etc.

 

No limit

ii)

Repatriation of sale proceeds of immovable property in the nature of commercial, residential, land etc. (Refer Note 2)

 

 

A. Property acquired in Forex (i.e. through inward remittances, FCNR balance or NRE balance)

Entire sale proceed is freely repatriable.

However, in case of residential property, repatriation of sale proceeds shall be allowed only upto 2 properties. Sale proceeds from 3rd property onwards shall be repatriable under USD 1 Million Scheme

 

B.  Property acquired otherwise than in Forex (i.e. through Rupee funds/inheritance etc.)

USD 1 million per Financial Year

iii)

Repatriation of funds/assets other than (i) and (ii) above:

Funds held in NRO account like below:

     - from sale proceeds/redemption of assets other than above like fixed deposits, shares, mutual funds etc.

        - Sale proceeds of inherited assets

USD 1 million per Financial Year

 

Note 1: Investment/assets purchased by NRI with the condition of non-repatriability:


Any NRI who has purchased/invested as NRI in shares and securities, with a condition that it is not repatriable, then sale proceeds of such investment may not be allowed by certain Banks.


The above sale proceeds were earlier considered by the Bank as repatriable under USD One Million Scheme. In our recent experience, certain Banks have placed restriction on repatriation of such securities. Hence, it is important to approach the Bank and seek professional assistance before proceeding ahead with the repatriation process.

 

Note 2: As per Foreign Exchange Management Act, 1999 (FEMA), NRIs are not allowed to purchase agricultural land/farm house/plantation property in India. However, NRIs are allowed to continue to hold agricultural land, farm house etc. in certain circumstances eg. if acquired by way of inheritance or acquired when Resident, subject to applicable FEMA provisions. If the acquisition of any property is through illegal means or ways which are prohibited under any law, repatriation of such property may also not be permissible. Hence, it is important to check if the property held by NRI is in accordance with the law

3. Whether NRI can remit outside India beyond the limits specified in above table?

Ans.

Yes. One may have to apply to RBI for special permission to repatriate above USD 1 million. RBI may grant permission for genuine reasons where hardship is caused eg. medical purpose, education etc.

4. What documents are required to be submitted to AD Bank by NRI to remit funds from his/her NRO a/c to his/her NRE a/c?

Ans.

NRI is typically required to submit following documents to AD Bank for remittance of funds from his/her NRO a/c to NRE a/c:

1.    Form 15CA – Self Declaration by remitter of funds (NRI)

2.    Form 15CB – Chartered Accountant’s Certificate for certifying the appropriateness of taxes deducted/paid along with Unique Document Identification Number

3.    FEMA Declaration and Transfer Request

4.    Documentary proof of sources of funds and payment of applicable taxes

5.    Cheque (as per requirements of certain banks)

6.    Any other documentary proof requested by AD Bank

5. What documents are required to be submitted to AD Bank by NRI to remit funds from his/her NRO a/c to his/her overseas a/c?

Ans.

NRI is typically required to submit following documents to AD Bank for remittance of funds from his/her NRO a/c to overseas bank a/c:

1.    Form 15CA – Self Declaration by remitter of funds (NRI)

2.    Form 15CB – Chartered Accountant’s Certificate for certifying the appropriateness of taxes deducted / paid along with Unique Document Identification Number

3.    Form A2 and Outward Remittance Form

4.    Documentary proof of sources of funds and payment of applicable taxes

5.    Cheque (as per requirements of certain banks)

6.    Any other documentary proof requested by the AD Bank

6. What is Form 15CB and Form 15CA?

Ans.

1.   Form 15CB:

It is a certificate issued by a Chartered Accountant (CA). A CA verifies that due taxes have been paid on the amount eligible and intended to be repatriated and certifies the same in Form 15CB. Form 15CB is uploaded by the CA on his Income-tax e-filing portal and the same is digitally by the CA.

 

2.   Form 15CA:

It is an undertaking given by the remitter. The form is uploaded online on the Income-tax e-filing website from the remitter’s portal and the said form is required to be e-verified by the remitter.

7. Mr. A is an NRI and he wants to repatriate Rs. 3,50,000/- during FY 2023-24. Whether Form 15CB is required in this case as the amount of remittance is less Rs. 5,00,000/-?

Ans.

As per provisions of the Income-tax Law, only Form 15CA – Part A is required in case total remittance amount during a Financial Year is less than Rs. 5,00,000/- and Form 15CB is not required. However, practically, Banks may have reservations and may request the NRI remitter to provide both Form 15CA and Form 15CB/CA letter.

Hence, it may be important to confirm the requirement with the Bank and seek professional help before proceeding ahead with the repatriation.    

8. How can NRI remitter e-verify Form 15CA?

Ans.

NRI remitter can e-verify Form 15CA through below options:

1.    Aadhar OTP (if NRI holds Aadhaar and mobile number linked with Aadhaar is active. One Time Password (OTP) is shared on such registered mobile number)

2.    Digital Signature Certificate

3.    Net Banking (Only specific banks are available to e-verify through net-banking eg. this option is not available for Barclays, HSBC Bank etc.)

4.    Bank account (if bank account is pre-validated and EVC is enabled on the e-filing portal. OTP is shared on email id and phone number registered with the Bank)

5.    Demat account

 

9. Can NRI remitter remit funds through different Banks in a Particular Financial Year?

Ans.

No. Remittances through NRO account to NRE account or overseas account can be done only through single AD Bank in a particular Financial Year. 

10. Is there any limit on the number of repatriation from NRO account?

Ans.

No. However, the total amount that can be repatriated from NRO account in a particular Financial Year is USD One Million.

11. Is there any limit on the amount for making an outward remittance from NRE a/c?

Ans.

NRE a/c balances are freely repatriable without any limit.

12. Can NRI repatriate borrowed funds from NRO account?

Ans.

No. Balances held in NRO account should arise from legitimate dues of the remitter. NRI remitter cannot repatriate borrowed funds

13. NRI received Rs. 5,00,000/- from his wife NRO account. Can he repatriate these funds from his NRO account?

Ans.

No. Balances held in NRO account should arise from legitimate dues of the remitter. NRI remitter cannot repatriate any transfers received from any other NRO account. This restriction is to avoid misuse of USD 1 Million Scheme.


14. NRI receive gift of Rs. 5,00,000/- from his Resident Parent? Can NRI repatriate such gift money from his NRO account?

Ans.

Resident individuals are allowed to give rupee gift to NRI, who is a close relative. The gift is required to be credited to the NRO account of the NRI relative and it is the donor’s (Resident Individual) responsibility to ensure that the gift is within the LRS limit of USD 2,50,000/- per Financial Year. The definition of close relative is defined under Section 2(77) of the Companies Act, 2013.

In the given case, Resident parent is allowed to give gift of money and credit it to NRI son’s NRO account as he a close relative and the gift amount is within the LRS limit. Once the gift is credited to NRO account of NRI relative, he/she can repatriate the funds to NRE or overseas account, as per the process explained in above FAQs

15. Can NRI carry forward the limit of USD One Million, if remained unutilized?

Ans.

No. The yearly limit of USD 1 Million if unutilized cannot be carry forward to subsequent years

16. What is the process for making an outward remittance from NRE a/c?

Ans.

NRI may approach his/her AD Bank where he holds NRE a/c to make an outward remittance.


17. Can NRI who has registered a mandate-holder in her NRE a/c make an outward remittance from the a/c as well?

Ans.

Mandate holder in NRE a/c can initiate an outward remittance; however, it shall be ensured that the beneficiary of the remittance is the a/c holder.


18. Is there a requirement of checking the origin of funds before allowing a transfer (If the fund in Bank account is due to multiple transfer etc. from other bank)

Ans.

Primarily, it is the NRI remitter’s responsibility to comply with the rules and regulations under Indian laws.

AD Banks play an important role in repatriation of funds and as a responsible channel for repatriation and are subject to RBI rules/regulations. AD Bank may check and ensure that there is no contravention of the law. RBI do check the compliances by the AD Bank and failure may cause penal actions by RBI. Accordingly, AD Bank may decide to verify the original source depending on the Bank’s internal policy and NRI remitter will have to comply accordingly.

19. Mr. A is an NRI and who had acquired a residential property in India for Rs. 10 Crore in the year 2015 out of inward remittance from USA bank. Mr. A now wishes to sell such property for Rs. 6 Crore in the year 2023. Is repatriation of sale proceeds of Rs. 6 Crore permissible under FEMA? Will it fall under USD 1 Million Scheme?

Ans.

Yes, it is permissible as per FEMA. In the event of sale of residential property, repatriation of entire sale proceeds outside India is permissible, provided the funds used for acquisition of said property was paid in foreign exchange received through banking channels or out of funds held in Foreign Currency Non-Resident Bank Account or  Non-Resident External Account.

In the given scenario, since Mr. A acquired a residential property in India out of inward remittance from USA bank, the same shall be freely repatriable outside India and shall not be subject to USD 1 Million Scheme.

20. In the above FAQ 19, what would be your answer if Mr. A wishes to sell such property for Rs. 15 Crore in the year 2023? Will it fall under USD 1 Million Scheme?

Ans.

In the given scenario, Mr. A would still be eligible to repatriate entire sale proceeds of Rs. 15 Crore, without any restriction.

21. In the above FAQ 19, would your answer remain same if Mr. A had already repatriated the sale proceeds of two other residential properties outside India?

Ans.

No, the answer will change.

As per FEMA, in case of residential property acquired by way of inward remittance, the sale proceeds are freely repatriable subject to not more than two such properties. Accordingly, sale proceeds from 3rd property onwards shall be repatriable under USD 1 Million per financial year

22. In the above FAQ 19 and 20, would your answer remain same if Mr. A now wishes to sell a commercial property?

Ans.

As per FEMA, the restriction of two properties applies only to residential property and there is no restriction on repatriation of sale proceeds in case of commercial immovable, if the property was acquired from foreign funds. In the given scenario, since Mr. A wish to sell commercial property which was acquired  from inward remittance, entire sale proceeds shall be freely repatriable outside India without any restriction.

23. Is interest income freely repatriable without any limit?

Ans.

Interest income is in the nature of current income and same should be freely repatriable without any limit. However, in our experience, Banks may have certain reservations and may allow repatriation of such income from NRO account upto the limit of USD 1 Million in a particular Financial Year.

                               

24. Can Form 15CB be withdrawn?

Ans.

  Yes, Form 15CB can be withdrawn within 7 days from the date of uploading


25. What is the timeline to revoke UDIN?

Ans. UDIN can be revoked within 48 hours

26. Can Form 15CA be withdrawn?

Ans. Yes, Form 15CA can be withdrawn within 7 days from the date of submission of the form.


                                                                                                                                                                                                      - Updated 04/2024