Transactions related to the repatriation and remittance of funds in and out of India are subject to regulations outlined in the Foreign Exchange Management Act, 1999 (FEMA), in conjunction with directives issued by the Reserve Bank of India (RBI). Under these regulations, the RBI has delegated authority to ‘Authorised Dealers’ (AD), which include banks and financial institutions, to process applications and facilitate the repatriation of funds from India. This framework ensures that such transactions are conducted in compliance with established guidelines and regulations.
As per FEMA, an individual’s non-resident status is determined by their intention to stay in the country rather than the duration of their stay. Therefore, whether you are currently living in India or not, any transactions involving the repatriation of funds from India or remittances to India, whether for investment, family support, or other purposes, must adhere to the relevant FEMA regulations.
As per the directives issued by the Reserve Bank of India (RBI), ‘Repatriation outside India’ refers to the process of purchasing or withdrawing foreign exchange from an authorized dealer in India and subsequently sending it abroad through established banking channels. This can involve crediting the foreign exchange to an account denominated in foreign currency, such as an NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) account, or to an account in Indian currency maintained with an authorized dealer, typically an NRO (Non-Resident Ordinary) account, which can later be converted into foreign currency if needed. These procedures ensure that funds can be legally and securely moved outside India in compliance with RBI regulations.
NRIs have the privilege to repatriate up to USD one million per financial year (from April to March) from the balance held in their NRO account, sale proceeds of assets, or assets acquired in India through inheritance or legacy. This repatriation is contingent upon the submission of essential documentary evidence to the Authorized Dealer (AD) Bank and compliance with tax regulations related to the sums being repatriated.
To make remittances out of India, with the exception of specific remittances outlined in the RBI’s exemption list, certain documentation is mandatory. This includes a CA certificate in Form 15CB and a self-declaration by the remitter in Form 15CA. The Authorized Dealer (AD) Bank will require these forms to be submitted online before processing the remittance. This procedure is in place to verify that the funds being remitted have a legal source, and that any applicable taxes have been properly deducted and paid before the remittance is executed.
Non-Resident Indians (NRIs) have the privilege of repatriating up to USD one million per financial year (running from April to March). This amount can be sourced from the balance held in their NRO account, the proceeds from asset sales, inherited assets, or legacies acquired in India. However, repatriation is contingent upon the submission of required documentation to the Authorised Dealer (AD) Bank and compliance with tax regulations concerning the funds intended for repatriation.For remittances originating from India (except those falling within specific exemptions outlined by the RBI), there is a requirement for a Chartered Accountant (CA) certificate in the Form 15CB, as well as a self-declaration submitted by the remitter using Form 15CA. These forms are typically demanded by the Authorised Dealer (AD) Bank and are to be submitted online before the remittance can be processed. This procedure is in place to verify that the funds being remitted have been acquired through legal means and that the relevant taxes have been correctly deducted and paid prior to the execution of the remittance.
Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs) have the option to repatriate the sale proceeds from residential properties outside India, under certain conditions:
The seller acquired the immovable property in compliance with the foreign exchange regulations in effect at the time of the acquisition.
The seller originally acquired the immovable property in compliance with the prevailing foreign exchange regulations at the time of acquisition.
• The funds used for the purchase of the immovable property were derived from foreign exchange received through established banking channels or from funds held in FCNR(B) or NRE accounts. (Note: If an individual has purchased an immovable property in India with a housing loan, as per current FEMA guidelines, and the loan repayments are made from remittances received from abroad through official banking channels or debited from the NRE/FCNR(B) account of that individual, these repayments may be considered equivalent to foreign exchange received.)
• The total remittance in a given year is subject to the aforementioned limit of US dollars 1 million and is restricted to the sale proceeds of a maximum of two immovable properties owned by NRIs/PIOs.
Our services in this domain encompass:
1. Evaluating the Possibility of Fund Repatriation or Remittance: We assess the feasibility of repatriating or remitting funds.
2. Offering Counsel on Current Restrictions or Conditions, if Applicable: We provide guidance on any existing limitations or conditions that may be in place.
3. Issuing a CA Certificate (Form 15CB): We provide the necessary CA certificate (Form 15CB) and support in the submission of the essential self-declaration (Form 15CA) required for the repatriation of funds from India.
