Regulations concerning the repatriation process for Non-Resident Indians (NRIs), Overseas Citizens of India (OCIs), and Persons of Indian Origin (PIOs)
The repatriation of funds from India by NRIs when selling property in India is subject to certain regulations. NRIs are permitted to repatriate up to USD one million per financial year (from April to March) from the balance held in their NRO account or from the sale proceeds of assets, including assets acquired in India through inheritance or legacy.
For remittances out of India, excluding specific exempted categories outlined by the RBI, certain documentation is necessary. This includes a Chartered Accountant (CA) certificate in Form 15CB and a self-declaration provided by the remitter in Form 15CA. Prior to processing the remittance, the Authorized Dealer (AD) Bank will require these forms to be submitted electronically. This procedure is in place to ensure that the remitted funds have a legitimate source, and any applicable taxes have been deducted and paid as required before the remittance is executed.
The sale proceeds from residential property in India can be repatriated outside of India by NRIs, OCIs, and PIOs, provided that:
• The seller acquired the immovable property in compliance with the foreign exchange regulations in effect at the time of purchase.
• The payment for acquiring the immovable property was made using foreign exchange obtained through authorized banking channels or from funds held in FCNR(B) accounts or NRE accounts. [In cases where an immovable property in India was purchased with housing loans that are compliant with existing FEMA guidelines, and the loan repayments were made using remittances received from abroad through banking channels or by debiting the NRE/ FCNR(B) account of the individual, these repayments may be considered as equivalent to foreign exchange received.]
• The remittance in a given year is limited to the aforementioned USD 1 million cap and is restricted to the sale proceeds of up to two immovable properties owned by NRIs/PIOs.
• Repatriation of proceeds from the sale of property acquired with rupee funds is allowed, subject to the condition that the property was held for a minimum of 10 years. If a property purchased with rupee funds is sold before the 10-year threshold, repatriation can still be conducted if the sale proceeds have been held by the NRI/PIO for the remaining period in NRO accounts or any other eligible security, provided that such investment can be traced back to the sale proceeds of the property.
The compliance requirements for repatriation
For remittances out of India, excluding those exempted by the RBI, certain procedures must be followed. These include obtaining a CA certificate in Form 15CB and a self-declaration in Form 15CA from the remitter. The Authorized Dealer (AD) Bank will require these forms to be submitted online before processing the remittance. These measures are in place to ensure that the remitted funds have a legal source, and that the applicable taxes have been properly deducted and paid prior to the remittance.
Repatriation is contingent upon providing the necessary documentary evidence to the AD Bank and ensuring compliance with tax regulations for the sums being repatriated.
