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NRI Repatriation India


NRI Repatriation India

An NRI Repatriation allows the NRIs to simply move their foreign earnings to be invested in India to their country of residence.

The Non-Resident Indians willing to invest in the Indian Stock Market with their foreign earnings on the repatriation basis. This simply means that the funds added by the NRI can be easily transferred back to the NRIs country of residence simply by converting them from Indian Rupee to foreign currency at any time.

Non-Repatriation is the opposite of Repatriation. In case the investment made on the non-repatriation basis, the funds cannot be transferred back to the NRIs country of residence also they cannot be converted to any foreign currency.

There are separate bank accounts that are available for the investments made on Repatriable and Non-Repatriable Basis. The two accounts classified are named as Non-Resident External (NRE) and Foreign Currency Non-Resident (FCNR). Both of these accounts are introduced and designed for the investment made on repatriation basis.

Any kind of funds that are held in these accounts can be converted into any kind of foreign currency and then further transferred to the customers overseas account at any time. Such accounts are termed as NRI Repatriable Account.

The NRO or Non-Resident Ordinary bank account is designed for the investments made on the non-repatriation basis. Such accounts are used in order to manage the NRIs earning in India from various sources like rent, pension, dividends, etc. Such accounts are termed as NRI Non- Repatriable Account.

NRI Repatriation Limit

The funds that are held in NRE and FCNR bank accounts are freely repatriable and has no repatriation limits.

The funds that are in the NRO Bank Account are subject to certain limits:
  1. The principal amount that are held in NRO is not at all repatriable.
  2. The interest gain on the NRO balances is freely repatriable.
  3. Any income earned in India in nature of rent, dividend, salary, pension, etc. It further proceeds from the sale of financial assets such as IPO, Equity Stocks, Mutual Funds etc. This may proceed from the sale of an immovable property in India is repatriable up to USD 1 billion per financial year.
NRI Repatriation of Funds from India

Other than the Repatriation limits, there are certain NRI Repatriation rules that are application as below:

  1. The repatriation of the funds from the NRO Account is allowed only after the payment of applicable taxes on the earned income in India and on the sale proceeds of the investment done by NRI.
  2. The repatriation of the funds from the NRO Account can be easily done to any NRE account of the NRI or by the overseas bank account of the NRI but not the third party.
  3. The repatriation limit of USD 1 billion is applicable across all the NRO bank accounts that are held by the NRI.
  4. The repatriation limit of USD 1 million from the NRO Account is allowed per financial year has to be utilized in one financial year only. There is no carry forward permitted if the limit is unutilized.
Documents Necessary for NRI Repatriation of Funds

The NRI can simply repatriate their funds from NRE, NRO and FCNR Bank accounts. There can be a slight variation in the requirements differ from bank to bank.

Documents require while repatriation from NRE/FCNR Account
  1. An NRI has to request the bank for repatriation. He needs to fill up the request form in order to notify the bank account about the remittance.
  2. A FEMA Declaration form or an outward remittance form or A2 form is required in order to apply for the purchases of foreign exchange. An NRI is required to mention the NRI repatriation purpose code for which the funds are required to be repatriated.

These forms are available on the bank website. The NRIs can simply download the form and send the duly signed up form to the banks via courier for processing. There are many other banks that offers the online repatriation services to the NRIs.

Documents require while repatriation from NRO Account

  1. A request has to be made to bank for repatriation.
  2. An A2 form.
  3. Form 15CA
  4. Form 15CB
  5. Documents that supports the source of funds.

An NRI is required to upload or scan and mail the attested copies of all the above-mentioned documents to the banks simply by processing the repatriation request. The banks may also ask for the physical copies to be courier in case it is required.

Investment Options for NRI Repatriable

It is a type of repatriable investment where the investments are made by the NRI and NRE Accounts. The NRIs can easily make investment in Indian Equity on a repatriation basis. However, for this process an NRI needs to choose the PIS route where each transaction will be reported to RBI. Apart from this, the government has various specified investment options for NRI to invest on a repatriation basis without any limit. The other investment options are listed below:

  1. Units of domestic mutual funds.
  2. Government dated securities.
  3. Treasury Bills (T-Bills).
  4. Bonds that are issued by PSU (Public Sector Undertaking) in India.
  5. It provides shares in Public Sector Enterprises being disinvested by the Central Government.
  6. It provides bonds/units that are issued by Infrastructure Debt Funds.
  7. It has listed non-convertible or redeemable preference shares or debentures.
  8. The bonds or units that are issued by infrastructure Debt Funds.
  9. IPO (Initial Public Offering)
  10. National Pension System.
NRI Repatriation of the Immovable Property

The NRIs can buy and sell immovable residential property in India without any prior approval from RBI. As we know there are no restrictions on the number of properties that can be bought or sold by NRI. The repatriation of sale proceeds from those properties are subject to certain restrictions as listed below:

NRI Repatriation of Immovable Property
Type of property held by NRI Rules applicable on repatriation of sale proceeds
Bought as a resident Indian
  1. The repatriation is provided to USD 1 million each financial year post payment of applicable capital gains and taxes.
  2. Property must be held for 10 years.
  3. If the property is sold before 10 years, the funds will be held in the NRO account on completion of 10 years from property purchase date, post which the funds can be repatriated.
  4. The repatriation is restricted to the sale of 2 residential properties.
Inherited by NRI
  1. Repatriation is provided up to USD 1 million each financial year post payment of applicable capital gains and taxes.
  2. Inheritance proof is a must for repatriation.
Bought in the capacity of NRI
  1. The sale proceeds has to be credited to the NRO bank account.
  2. The repatriation is provided up to USD 1 million per financial year post deduction of taxes/capital gains as applicable. The repatriation cannot exceed:
    • The amount of foreign exchange remitted by an NRI to India on the purchase of the said property.
    • The funds paid by Foreign Currency Non-Resident (FCNR) Account on buying the property.
    • The amount paid from the NRE account while purchasing.
  3. The repatriation is restricted to the sale of 2 residential property
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