Expert Services for Fund Repatriation for NRIs

Benefits of Repatriation for NRIs 

There are many benefits of repatriation of funds for the NRIs:

• Access to Funds: It enables Indian earnings to be utilized for various purposes, such as retirement planning, investments, or unforeseen expenses.
• Flexible Investment Options: Repatriation of funds allows NRIs to reinvest the funds in other international investment opportunities. 
• Financial Planning: It helps in planning finances at a global level by integrating Indian assets into the financial portfolio at an international level. 

Types of Repatriable NRI Account 

Having a better understanding of the different types of NRI accounts can be very helpful in managing the funds and following the repatriation process. Here are the three types of NRI Accounts:

1. NRO (Non-Resident Ordinary) Account: This type of account is made for the NRIs who have income from India. It can include the income from rents, dividends, or pensions. If you wish to repatriate funds from NRO accounts, it is essential to follow the guidelines of the RBI. There is a specific limit for the transactions per financial year, which is 1 million USD after clearing the taxes. Please note that the interest earned on the NRO account is taxable in India. Therefore, consider the tax implications before making any transactions. 

2. NRE (Non-Resident External) Account: If you are looking for an account to maintain your foreign earnings in Indian rupees in India, then NRE accounts are best. The main feature of these accounts for repatriation is their flexibility. They allow the easy movement of the funds, including the principal and interest. Also, one thing that you should consider is that the interest earned on the funds of NRE accounts is exempt from taxes in India. Hence, it is an attractive option for investments and savings for NRIs.

3. FCNR (Foreign Currency Non-Resident) Account: These accounts are for those NRIs who want to keep their funds in foreign currency. The FCNR accounts help in protecting from the risks of exchange rates by allowing deposits in different currencies like EUR, USD, GBP, etc. FCNR accounts stand out among all as they have full repatriation capabilities of both the principal and interest. They do not have any restrictions, limits, or tax complications on the interest earned in these accounts.

RBI Rules for Repatriation

The repatriation rules are set by FEMA, ensuring that all funds moved under the name of repatriation are legitimate and have been taxed correctly. Here are a few of the rules nd limits of Repatriation:

1. FEMA Guidelines

For NRIs, the authorities under the Foreign Exchange Management Act oversee the repatriation process. It ensures that only taxed funds and legitimate funds are being moved out of India. There are many rules strictly set by FEMA on how and when the funds should be repatriated. 

2. Repatriation limit of NRO account

The NRIs are allowed to repatriate 1 million USD in each financial year from their NRO accounts. This limit applies only to the principal amount, not to the interest. They can be separately repatriated. The limit of $ 1 million USD covers funds from income sources such as rent, dividends, salary, pensions, and the sale of an immovable property. 

3. Procedural Requirements

You need to follow certain compliance rules and a specific documentation process to repatriate the funds from an NRO account. There are specific procedural formalities that you need to follow, such as the tax clearances. As an NRI, ensure that you have already filled out the necessary forms, such as Form 15CA and Form 15CB, as they confirm the payment of applicable taxes. 

For accounts like NRE and FCNR, the repatriation process is relatively straightforward. It is significantly quicker, and they allow the repatriation of the full amount without any tax complications. You can repatriate both the principal and interest amounts without restriction from FEMA. 

Tax Implications on NRI Repatriation

Taxation is significant in proceeding with NRI Repatriation Services. NRIs must follow all the rules associated with Indian taxes before remitting the sale proceeds to a foreign country. Tax liabilities can vary, depending on the duration of property ownership, the type of transaction, and the applicable deductions.

Tax Deducted at Source (TDS) on Sale Proceeds

Under Section 195 of the Income Tax Act, NRIs are required to deduct TDS on the funds they intend to repatriate. On long-term capital gains, the rate is 20%, and on short-term capital gains, the rate is 30%. The buyer should always deduct TDS before making any payment to an NRI seller.

Capital Gains Tax on Property Sale

The taxation on capital gains is dependent on whether the property sale is LTCG or STCG:

• Short Term Capital Gains (STCG): If a particular property is sold within two years of holding it, then the profits are added to the income of the individual and will be taxed as per the income tax slab rates applicable. 
• Long Term Capital Gains (LTCG): If an individual holds the property for more than 2 years, then the gains are considered as LTCG and they are taxed at the rate of 20% with indexation benefits.

NRO Account Taxation

The funds repatriated from the NRO accounts of the individuals are taxed according to the Indian Income tax rates. It is generally taxed at 30%. This process of taxation is applied to those incomes that are earned in India, such as income from rent, dividends, or interest on deposits. 

Double Taxation Avoidance Agreement (DTAA)

The NRIs are allowed to claim benefits from DTAAs to save themselves from getting taxed in both countries, India and their country of residence. There are bilateral agreements signed between India and the countries that allow the NRIs to claim tax benefits. It helps reduce or eliminate tax liabilities on repatriated funds. If the country of residence of an NRI has a DTAA with India, then they can lower their tax burdens up to a significant level.

NOTE: On the other hand, accounts like NRE and FCNR offer the NRIs many tax advantages. The interest that you have earned on these accounts will be completely exempt from taxation. Hence, they provide an incentive to the NRIs for managing their foreign income through these accounts.

Documents Required for NRI Repatriation

The process of Reptartion includes the submission of some specific forms and certificates to make sure that all the legal and tax obligations are being followed in the process of transferring the funds. In this section, we have mentioned the list of all the required documents for NRE, NRO, and FCNR accounts.

Repatriation Documents for NRO Account

There are tax implications in the process of transferring the funds involving NRO accounts. Hence, there are more documents required in this process than in the other accounts. The list of main documents is:

• Form 15CA: This form outlines the process for an NRI (Non-Resident Indian) to remit funds to a foreign country. It is a type of self-declaration that the right amount of taxes has been deducted from the funds that are transferred. You have to fill out this form on the official portal of the Tax Information Network (TIN) and submit it on the same. 
• Form 15CB: It is a certificate provided by a Chartered Accountant stating that all the important taxes have been paid on the funds that are repatriated. This is a tax statement that validates the information provided in Form 15CA and maintains compliance with the tax laws. 
• Form A2: It is a Foreign Exchange Management Act (FEMA) declaration form, and it is compulsory to fill out this form for all foreign exchange transactions. This form contains the information about the transactions and states that it is made for a legitimate purpose.
• Bank Request Form: It is a standard request form for the funds repatriated. It should be from the bank in which the NRO account is present. This form officially starts the process of repatriation, and it includes the details like the amount of repatriation and details about the bank account in the destination country. 

There are some additional documents, such as the proof of investments or income related to the repatriated funds. The bank can ask for these documents to check the source of all the funds. 

Repatriation Documents for NRE/FCNR Account

The process of repatriation of funds for the NRE/FCNR accounts is very simple compared to the NRO accounts, as there are no tax complications involved, and they offer full repatriation of funds. The necessary documents for them are:

• Request Application: It is the form to start the process of reptariation and is submitted to the bank in which the accounts are held. This form includes the information about the total amount repatriated and details of the overseas bank account of the destination. 
• Form A2: It is the same form as for the NRO accounts. It is the FEMA declaration form that is necessary for the NRE and FCNR accounts. This form ensures that the transaction has been made for a proper purpose, and it follows all the guidelines set by FEMA.

As we know, the NRE and FCNR accounts involve foreign earnings and are exempt from Indian taxes. Hence, the whole process is a lot faster, and there are fewer forms involved to complete the transaction. 

Eligibility Checklist Before the Repatriation Process

Before you start the process for the NRI repatriation of funds, you should make sure that you are following the eligibility criteria as set by the Reserve Bank of India. There is no harm in having a quick checklist, as it will help in saving your time and avoiding rejection of your request for repatriation.

NRI Status and KYC

To qualify for the NRI repatriation, you must verify your Non-Resident Indian Status under the guidelines of the Foreign Exchange Management Act (FEMA). If you are an Indian Passport Holder, then you must show proof that you have a valid visa or residence/work permit. If you are a foreign passport holder, then you must show your Overseas Citizen of India (OCI) card or Person of Indian Origin (PIO) card. 

When you change your status to NRI, you need to complete a new and fresh Know Your Customer (KYC) process. For a fresh KYC, you need to submit the following documents:

• A self-attested copy of your passport 
• A valid visa or OCI/PIO card
• Recent passport-sized photographs
• Proof of your overseas address

If you are a seafarer, then you must provide your passport, visa, and a contract of employment that shows your NRI status. 

PAN and tax paid proof

Under the Liberalized Remittance Scheme, you have to provide the details of your Permanent Account Number (PAN) to carry out all the transactions. If you don't have a PAN card, then you must fill out Form 60 and submit it. 

You will need the following tax compliance documents to repatriate the funds from your NRO accounts:

• Form 15CA (it is a self-declaration regarding remittance).
• Form 15CB (it is a certificate given by a CA to verify the tax payments).

Both of these forms showcase that you have paid all the taxes applicable to the funds that you want to repatriate. 

Process for Repatriation of Funds

For the repatriation of funds, one needs to carefully plan and execute the process very precisely. Here is a five-step process by which you can repatriate the funds from India to the country of your residence: 

Step 1: Choose the correct account

You should choose the right type of account as per your specific needs. You can do unlimited transfers and smooth repatriation with the help of an NRE/FCNR Account. If you want to transfer the income earned in India, then the NRO accounts are best. They have an amount limit of 1million USD per financial year for repatriation. 

Step 2: Gather all the necessary documents

The documents are needed as per the type of account:

For NRO accounts:

• Request the Application form for the repatriation
• A2 Form
• Documents that prove the source of funds, such as dividend proofs, rent receipts, sale deeds, etc.

For NRE/FCNR accounts: 

• Request Application Form
• Form A2, which is a FEMA declaration form

Step 3: File the tax forms and declarations 

This type of tax documentation is needed for the NRO accounts:

• You need to file Form 15CA online by using the Income Tax Portal ( it is a self-declaration of details of payments).
• You need to get a Form 15CB from a Chartered Accountant that confirms the tax payment.
• The submitted Form 15CB should have a valid UDIN (Unique Document Identification Number). 

Step 4: Submit the request for fund transfer to the bank

The process of transferring the funds requires:

1. Firstly, log in to your Net Banking account with the correct customer ID and password.
2. Go to the tab "Fund Transfer".
3. Pick the option of "Repatriation of Funds" under the transactions.
4. Select the type of your transaction based on your NRI account type.
5. Choose the beneficiary and complete the transaction of funds.

You can also do this process offline by visiting the nearby branch of your bank along with the completed forms and all the supporting documents. 

Step 5: Track and confirm the transfer

You can keep track of all your transfers:

• You can do it by using the provided reference number for the transaction.
• You can look for the status updates on the online portal of your bank.
• If your funds don't appear in your account in 7 working days, then you should reach out to your bank.

The usual time for receiving the funds in the account of the beneficiary is approximately 1-3 business days after processing.