NRI Fund Repatriation From India: Understanding limits and process

NRI (Non-Resident Indian) banking and finance can be complex, especially when it comes to repatriating funds From India. It is crucial to understand the intricacies of NRI repatriation to ensure your finances are managed efficiently and legally. In this blog, we will delve into the details of NRI repatriation, types of NRI accounts, necessary procedures, and the essential documents required for a smooth repatriation process.

What is NRI Repatriation?

NRI repatriation refers to the process where NRIs transfer funds from their bank accounts in India to a foreign country or country of residence. This process includes both the principal amount and any interest earned, depending on the type of account. The Reserve Bank of India (RBI) has set specific limits and conditions for repatriation, particularly for Non-Resident Ordinary (NRO) accounts.

Key Points on Repatriation Limits:

• NRO Accounts: NRIs can repatriate up to USD 1 million per financial year from their NRO accounts, including both principal and interest, after paying applicable taxes.
• NRE and FCNR Accounts: For these accounts, there are no upper limits on repatriation. Funds, including both principal and interest, can be repatriated freely.

Types of NRI Accounts:

Understanding the different types of NRI accounts is essential for effective financial management. Here’s a breakdown:

1. NRO (Non-Resident Ordinary) Account

• Purpose: Suitable for NRIs with income sources in India, such as rental income, dividends, or pensions. Even if any funds to be transferred in india from other Indian account one needs NRO.
• Repatriation Limit: Up to USD 1 million per financial year after tax.
• Taxation: Any type of income earned and Interests earned are taxable in India.

2. NRE (Non-Resident External) Account

• Purpose: Ideal for NRIs to park their foreign earnings in Indian Rupees.
• Repatriation: Free movement of funds (both principal and interest) without limits.
• Taxation: Interest earned is exempt from tax in India.

3. FCNR (Foreign Currency Non-Resident) Account

• Purpose: For NRIs preferring to keep savings in foreign currency (USD, GBP, EUR, etc.).
• Repatriation: Full repatriation of both principal and interest without limits.
• Taxation: No tax implications on interest earned.

Points to Note:

Local Income Sources:

As a Non-Resident Indian (NRI), it is crucial to meticulously track and manage your income sources within India. These sources can include:

• Rent: Income generated from renting out property owned in India.
• Salary: Earnings received from employment or services rendered within India.
• Dividends: Profits distributed by Indian companies to their shareholders.
• Pensions: Regular payments received if you have a pension plan in India.
• Income from Immovable Property: Earnings from the sale or transfer of real estate or other immovable assets within India.
• Interest earned. 

Proper documentation and tracking of these incomes ensure compliance with Indian tax laws and facilitate the repatriation process.

Tax Liabilities:

Before repatriating funds earned in India, it is imperative to ensure that all applicable taxes on the income have been duly paid. This includes:

• Income Tax: Tax on earnings such as salary, rent, and pensions, interests.
• Capital Gains Tax: Tax on profits from the sale of property or investments.
• Dividend Distribution Tax: Tax on dividends received from Indian companies.

Ensuring all tax liabilities are settled helps avoid legal complications and penalties during the repatriation process.

Repatriation Limitations:

There are specific limitations on the amount of money that can be repatriated From India in a financial year:

• Annual Limit: You can repatriate up to USD 1 million per financial year from your Non-Resident Ordinary (NRO) account.
• Non-Carry Forward Rule: If you repatriate less than USD 1 million in a given financial year, the unused limit cannot be carried forward to the next year. Therefore, it is important to plan your repatriation needs accordingly within each financial year.

Non-Repatriable Investments:

Certain investments made using funds from your NRO account are considered non-repatriable, meaning the principal amount cannot be transferred abroad. These include:

• Mutual Funds: Investments in Indian mutual funds.
• Equity Shares: Purchases of stocks in Indian companies.
• Other Financial Instruments: Any other investments or financial instruments bought with NRO funds.

Understanding which investments are non-repatriable helps in planning your overall financial strategy and ensuring that your repatriation activities comply with regulations.

By managing these aspects effectively, you can ensure smooth financial operations and compliance with Indian laws while optimizing your repatriation processes.

Repatriation Procedure

Repatriating funds involves several steps and requires specific documentation. Here’s a step-by-step guide:

Step 1: Fill Out Form 15CA and 15CB

• Complete, sign, and submit Form 15CA online.
• Include details about the remitter, such as account number, amount, and overseas account information.
• This form also contains details of Form 15CB. Form 15CB is an Accountant's certificate required for payment to be made to a Non-Resident (not being a Company) or to a Foreign Company.

Step 2: Submit Acknowledgement

• Receive an acknowledgement after submission.
• Sign the acknowledgement and submit it to the bank along with Form 15CB and other required documents.

Necessary Documents for Repatriation:

To ensure a smooth repatriation process, you will need the following documents:

1. Application form.
2. Passport of the applicant (NRI).
3. PAN Card.
4. Visa / PIO (Persons of Indian Origin) / OCI (Overseas Citizen of India) Card.
5. 15 CA/CB certificate - a certificate from a chartered accountant declaring that the remitter has paid all the incurred taxes.
6. A2 form.
7. Supporting documents to manifest the source of funds that are to be repatriated.

Two Critical Documents:

• Form 15CA: An undertaking by the NRI to remit funds.
• Form 15CB: A certification of the report by the chartered accountant.
• Document showing Income Tax paid.



At Documitra, we simplify the repatriation process for NRIs by offering expert guidance on filling out forms, understanding tax implications, and ensuring all necessary documents are correctly submitted. We help in getting the Form 15 CA/CB certified by CA and submit it on clients behalf. Our services ensure a smoother,  more efficient and hassle-free experience, helping you manage the complexities of repatriation with ease.