NRI Repatriation:
Moving Money Out of India

NRE, NRO and FCNR: the three accounts that matter

The single most useful rule to remember: money that came from abroad should stay in the NRE world, and money earned in India lives in NRO. Investments made from an NRE account are usually fully repatriable. Investments made from an NRO account are subject to the NRO limit.

Repatriating from an NRE account

Funds in an NRE account, including the interest, can be moved abroad freely without any limit or special paperwork. This is why NRIs are usually best served by routing foreign income through NRE and making their Indian investments from it.

One point to note: you cannot generally move money from an NRO account into an NRE account except within the repatriation rules described below.

Repatriating from an NRO account

Under RBI rules, an NRI can repatriate up to USD 1 million per financial year from NRO balances. This limit covers the principal amounts, including sale proceeds of assets, and is applied per person across all their NRO accounts. Current income such as rent, dividends and interest can be repatriated after tax.

Tax must be paid or deducted before the money leaves India. Banks will ask for supporting documents, which usually means Forms 15CA and 15CB.

Form 15CA and Form 15CB

• Form 15CB is a certificate from a chartered accountant confirming the nature of the payment and that the correct tax has been paid or deducted. It is typically needed for larger remittances.
• Form 15CA is a declaration filed online on the income tax portal by the person making the remittance. Your bank will ask for it before sending the money.

Thresholds and exemptions change, so check with your bank and chartered accountant before each large remittance. Having your Indian tax filings in order makes this process much faster.

Repatriating property sale proceeds

When an NRI sells property in India, how much can go abroad depends on how it was bought:

• Bought with foreign remittance or NRE funds: sale proceeds can be repatriated up to the amount originally paid in foreign exchange, for up to two residential properties.
• Bought with Indian funds or inherited: proceeds go to the NRO account and can be repatriated within the USD 1 million annual limit, after tax and with documentary proof.

Keep the purchase documents and bank records showing how the property was paid for. Without them, proving eligibility years later can be difficult. Capital gains tax applies on the sale, and buyers must deduct tax at source from payments to NRI sellers.

Mutual funds and other investments

Mutual fund units bought from an NRE account can be redeemed and the proceeds repatriated in full. Units bought from an NRO account are repatriable only within the NRO limit. The same principle applies to shares bought through the portfolio investment scheme.

Some Indian fund houses do not accept investments from NRIs resident in the US or Canada because of compliance rules in those countries, or accept them only with extra declarations. If you live in either country, check this before investing.

For NRIs who want to avoid rupee conversion altogether, investing through GIFT City in US dollars can be simpler: money goes in and comes out in foreign currency. We help NRI clients decide which route fits, and coordinate with their tax advisers in India and abroad as part of our wealth planning work.

Frequently asked questions

This guide is for general information only and is not investment, tax or legal advice. Investments are subject to market risk. Please read all scheme documents carefully and consult your own tax and legal advisers.