Repatriation FAQs for NRI

Remittance of funds held in India by Non-residents to outside India is popularly termed as “Repatriation”.

Please note, repatriation of funds is subject to payment of applicable taxes in India.

Yes. One may have to apply to RBI for special permission to repatriate above USD 1 million. RBI may grant permission for medical purpose, education, home purchase or similar requirements at their discretion.

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

• Form 15CA – Self Declaration by remitter of funds (NRI)
• Form 15CB – Chartered Accountant’s Certificate for certifying the appropriateness of taxes deducted / paid
• FEMA Declaration and Transfer Request
• Documentary proof of sources of funds and payment of applicable taxes
• Any other documentary proof requested by AD Bank
  

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

• Form 15CA – Self Declaration by remitter of funds (NRI)
• Form 15CB – Chartered Accountant’s Certificate for certifying the appropriateness of taxes deducted / paid
• Form A2 and Outward Remittance Form
• Documentary proof of sources of funds and payment of applicable taxes
• Any other documentary proof requested by the AD Bank
  

• Form 15CB:
  It is a certificate issued by a Chartered Accountant. A Chartered Accountant shall verify that due taxes have been paid on the amount intended to be repatriated and shall subsequently issue Form 15CB.

• Form 15CA:
  On the basis of Form 15CB, Form 15CA is required to be filled online on the income tax e-filing site (https://incometaxindiaefiling.gov.in/). NRI is required to register himself / herself on the income tax website for the said purpose.
  The filled Form 15CA generated from the website shall be printed and signed by NRI and submitted along with Form 15CB and other documents to AD Bank from where the remittance is being made. Alternatively, Form 15CA can be electronically signed through Digital Signature Certificate (DSC) of the remitter (NRI).
  

NRE account balances are freely repatriable without any limit.

NRI may approach his / her AD Bank where he holds NRE account to make an outward remittance. This can also be done through netbanking (online) if provided by your respective AD bank.

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

AD Bank may collect following documents while repatriating the funds from NRO account to NRE account or overseas bank account:

• Proceeds received on sale / redemption of inherited movable asset (eg. Mutual Funds, shares, Fixed Deposits, bank balance):
  • Copy of Will / Probate / Succession Letter, if any or other documentary evidence reflecting transfer of such asset as inheritance
  • Documentary evidence in relation to sale / redemption of asset based on the nature of asset
  • NRO Bank statement reflecting deposit of proceeds into the account on sale or redemption of asset
  • Form 15CA and Form 15CB as applicable
• Proceed received on sale of inherited immovable property (excluding agricultural land):
  • Copy of Will / Probate / Succession Letter, if any
  • Registered Sale Deed / Agreement for Sale
  • NRO Bank statement reflecting deposit of sale proceeds into the account
  • Tax Exemption Certificate, if any
  • Form 15CA and Form 15CB as applicable
• Proceeds received on sale of immovable property (excluding agricultural land):
  • If immovable property was acquired in foreign exchange then Foreign Inward Remittance Certificate (FIRC) or other documents evidencing acquisition / repayment of loan in foreign exchange as amount equivalent to investment in forex is freely repatriable
  • Purchase deed / Allotment Letter / Possession Letter / Gift Deed as applicable
  • Registered Sale Deed / Agreement for Sale
  • NRO Bank statement reflecting deposit of sale proceeds into the account
  • Tax Exemption Certificate, if any
  • Form 15CA and Form 15CB as applicable
• Proceeds received on sale of agricultural land:
  • Please note, NRI can either inherit agricultural land or he can continue to hold, own and transfer such agricultural land if such was acquired by him when he was resident in India. Further, NRI can transfer such land only to a Person resident in India.

Accordingly, based on case to case, following documents may be collected by the AD Bank:

• Purchase deed if agricultural land was purchased when he was resident of India or copy of Will / Probate / Succession Letter if such land was inherited to NRI
• Registered Sale Deed / Agreement for Sale. (AD Bank can also ensure that the buyer is Resident of India under FEMA laws)
• NRO Bank statement reflecting deposit of sale proceeds into the account
• Tax Exemption Certificate, if any
• Form 15CA and Form 15CB as applicable
• Proceed received on sale of property which does not belong to NRI customer but was transferred through Court discretion:
  • Copy of Probate / Court’s discretion and document evidencing transfer of property based on court discretion
  • Registered Sale Deed / Agreement for Sale or other documentary evidence in relation to sale of asset / property
  • NRO Bank statement reflecting deposit of sale proceed into the account
  • Tax Exemption Certificate, if any
  • Form 15CA and Form 15CB as applicable
    

Definition of current income is not explicitly covered under FEMA regulations. However, current account transaction is defined under FEMA which includes net income from investment.

In case of inheritance, asset / property is transferred to legal heir. In the given question, copyright of the book is transferred to the son on demise of his father.

On combine reading of above, it may be considered that, royalty income is received by the son from an investment (copyright), owned by him after his father’s demise. Accordingly, royalty income received by the son may fall within the purview of income received from investment and therefore may be considered as current income.

A person coming to India from abroad can bring foreign exchange without any limit. However, if aggregate value of foreign currency alone exceeds USD 5,000 or its equivalent, it should be declared to Customs Authorities at the Airport in Currency Declaration Form (CDF) on arrival in India.

RBI may penalize if there is any contravention or deficiency in compliances, monitoring mechanism of the AD Bank. Accordingly, AD Bank should take appropriate actions while depositing foreign currency into customer’s bank account.

Amount in Form 15CA is auto-populated from Form 15CB. Further, Form 15CB is issued by a CA to certify that appropriate taxes have been paid / deducted on sources of funds earned / received in India. Accordingly, amount of remittance in Indian rupees and tax deduction / payment details thereon should be mentioned in Form 15CA.

If remittance is to be made overseas in foreign currency, prevailing exchange rate and notional Foreign Currency Equivalent can be used while filing Form 15CB / Form 15CA and NRI customer can submit an outward remittance form (request letter) to the AD bank stating the amount of remittance to be made in foreign currency.

However, AD Bank should restrict the remittance in foreign currency equivalent to Indian rupees mentioned in Form 15CA based on the exchange rate prevailing on the date of the transfer.

Basically, it is CA’s obligation to ensure that appropriate taxes have been paid / deducted on the sources of funds intended to be repatriated and certify the same in Form 15CB.

However, AD Banks play an important role in repatriation of funds and are subject to RBI rules / regulations. Accordingly, in case of mismatch, they may request NRI customer to seek clarity from their CA for basis of tax deduction / payment and after satisfaction, may proceed with the repatriation.

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, it is practically advisable to check the origin of the funds based on internal policies of each AD bank.

Remittances from NRO account to NRE account or overseas bank account can only be done through a single AD Bank in a particular Financial Year. This is basically for AD bank to track that remittance from NRO account is not made beyond USD 1 Million per FY.

If remittance is made partly through other AD Bank then it amounts to contravention on the part of the remitter (NRI). However, conservatively, AD Bank should always seek clarity from NRI customer in this relation and also get a declaration signed from the NRI customer stating that he / she has not made any remittance from other AD bank during a particular FY.

If AD Bank is aware that part remittance has already been made through other AD Bank then they should advise the NRI customer to make other remittance for that FY from that AD Bank only.

The answer is no but it is not explicitly provided in FEMA regulations.

Generally, AD Bank allows transfer of funds from NRO account to remitter’s own NRE account within the overall ceiling of USD 1 Million per FY and thereafter the funds can be freely transferred from NRIs NRE account to NRE account of the third party.

The existing demat account cannot be converted into portfolio investment scheme (PIS) account. On becoming non-resident, one cannot continue to operate his / her regular demat account. The existing demat account, which holds shares that were purchased while he / she was a resident Indian, will have to be closed and would need to transfer the shares to a new demat account which is linked with a NRO bank account. One can continue to hold these shares on non-repatriation basis or sell them even after becoming non-resident.

NRIs were earlier allowed to make investment under PIS on non-repatriation basis, however the same has now been discontinued. NRIs are now allowed to purchase / sell shares or convertible debenture of an Indian Company through stock exchanges under the PIS on repatriation basis. For this purpose, the NRI has to open a NRE bank account under the PIS scheme for routing investments.