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Repatriation of funds from India by Non Resident Indians (NRI) and Resident Indians

This question is frequently asked by many clients.

  1. Money brought from abroad into NRE and FCNR account – is freely repatriable without any restriction and without any approval from RBI
  2. Current Income earned in India –
  • The current income includes dividend earned from shares, rental income, pension, Interest on deposits, profits from business, etc.
  • This income can be deposited to either NRO or NRE or FCNR account.
  • After paying applicable income tax on the current income, the entire amount can be repatriated freely without any restriction and without any approval from RBI
  • USD One million is not applicable to current income.
  1. Capital Income earned in India –
  • Suppose funds are brought into India from abroad towards purchase of capital asset such as residential site or flat. Upon the sale of such asset, one can repatriate the funds freely to the extent of the money brought in to India. For example, to purchase a flat at Bangalore, Mr.NRI transferred Rs.1.25 Crores and sold it for Rs.2.00 Crores. In this case, NRI can transfer Rs.1.25 Crores freely without any approval from RBI and without any upper limit restriction.
  • The proceeds from sale of asset to be deposited  only to NRO account and then transferred to NRE account to the extent of money brought in from abroad to buy the property.
  1. Balance money in NRO Account
  • Proceeds from sale of asset in NRO account
  • Withdrawal of bank deposits, money received on maturity of insurance, sale proceeds of shares or capital receipt of any other nature and
  • Any balance in NRO account can be transferred freely up to USD One million per financial year, without any approval from RBI
  • Applicable income tax on capital gain, however to be paid.  
  1. Restriction on transfer
  • In case NRI wants to transfer funds over USD One million per year from NRO account, then he can apply to RBI and seek permission. Upon getting the permission, the funds can be repatriated.

Repatriation of Funds by residents Indians

  1. Private Visit abroad (for tourist purposes) – can obtain up to USD 10,000 per financial year.  
  2. Business Trip (including attending conference, seminar, study tour, training etc) – can obtain up to USD 25,000 per trip/visit  
  3. Trip to Nepal or Bhutan – No foreign exchange can be taken for a trip to Nepal or Bhutan either for personal or business trip
  4. Medical Treatment abroad –  foreign exchange up to USD 100,000 or its equivalent for medical treatment abroad on self declaration basis, without producing any estimate from a hospital/doctor in India/abroad
  5. Medical Treatment – Expense of attendant – In addition to USD 1,00,000, an amount up to USD 25,000 is allowed for maintenance expenses of a patient going abroad for medical treatment or check-up abroad, or to a person for accompanying as attendant to a patient going abroad for medical treatment/check-up
  6. Higher Studies –  For studies abroad the estimate received from the institution abroad or USD 100,000, per academic year, whichever is higher can be availed. Additionally, Students going abroad for studies are treated as Non-Resident Indians (NRIs) and hence can repatriate up to USD 1 million per financial year from his NRO account
  7. Employment – A person going abroad for employment can draw foreign exchange up to USD 100,000 on the basis of self-declaration.
  8. Liberalized Remittance Scheme – Under the Liberalized Remittance Scheme, all resident individuals, including minors, are allowed to freely remit up to USD 125,000 per financial year (April – March) for any permissible current or capital account transaction or a combination of both. This amount is in addition to all the remittances given in points 1 to 7 above.

Click here to read How much money can an Individual transfer out of India?

 

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About CA Prasad Chartered Accountant

CA Prasad Chartered Accountant
CA Prasad is a practicing Chartered Accountant and partner in Bangalore -based CA Firm. For further information or query, please email it to [email protected]