NRI Real Estate and Property Investment in India
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Repatriation of Income / Earnings

Q) Is deposit and interest repatriable freely in case of NRE/FCNR account?
A) Yes. Principal and interest earned are fully repatriable.

Q) Is nomination allowed in NRO/NRE accounts?
A) Yes. Your nominee may be spouse, children, relative or friend.

Q) Is repatriation of funds belonging to non-residential nominees permitted?
A) Funds held in NRO account will be allowed to be credited to the non-resident nominee's NRO account only and no repatriation is permitted. Repatriation of funds from the deceased person's NRE account will be permitted.

Q) In which of the account can balances be repatriated?
A) Balances held in NRE accounts can be repatriated abroad freely. Funds in NRO account cannot be remitted abroad but used only for local payments in rupees.

Q) What are the conditions with respect to repatriation of balances in NRO accounts?
A) Repatriation is allowed up to US dollars 1 million per calendar year for any purpose from the balances in NRO accounts subject to payment of applicable taxes. The limit of US dollars 1 million includes sale proceeds of immovable properties held by NRIs/PIOs for a period of 10 years. In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI/PIO for the balance period.

Q) Can the properties (residential/commercial) be given on rent if not required for immediate use?
A) Yes. Reserve Bank has granted general permission for letting out any immovable property in India. The rental income or proceeds of any investment of such income are eligible for repatriation.

Q) Can sale proceeds of such property when sold be remitted out of India?
A) Repatriation of sale proceeds of immovable property acquired in India will be to the extent of repatriable funds used for acquiring the property, without any lock-in period, up to two residential properties. The balance amount will be repatriable through NRO account subject to conditions applicable for repatriation of balances from NRO accounts.

Q) Is the pension payable in India to an NRI remitted abroad?
A) Yes. Authorized dealers can permit remittance of pension to NRIs only when the person concerned has no other income in India. If the NRI has any other income in India, the pension amount should be credited to his NRO account and only after payment of applicable taxes his net income is allowed to be remitted.

Q) Is the rental income or proceeds of investment from an immovable property (residential/commercial) eligible for repatriation?
A) Yes. The rental income or proceeds of any investment of such income are eligible for repatriation.

Q) What major formalities are required to repatriate rental income an NRI receives from his house/flat in India?
A) Such amounts are normally credited to the NRO account of the Non resident Indian. He should submit an undertaking and certificate from a Chartered Accountant stating that the income tax thereon has been paid / provided for /deducted. If the Non Resident does not have taxable income in India, he may submit a simple declaration that he/she is not a tax payer in India.

Q) How can NRO funds be repatriated?
A) In the case of repatriation of sale proceeds of immovable property by NRIs/PIOs, repatriation can be allowed thereof even if the immovable property was held by the NRIs/PIOs for less than 10 years provided the cumulative period of holding of the immovable property in India and retention of the sale proceeds of the property in the NRO account is not less than 10 years. (Allowed up to 30.6.2003)

Q) Can income by way of rent, dividend and interest be repatriated from NRO account?
A) Yes, it can be repatriated.

Q) Can a non resident repatriate his pension received in India?
A) Yes.

Q) Can an NRI repatriate interest income on non repatriable deposits that is held by him in India?
A) Yes.

Q) Can an NRI repatriate rental income received from his house/flat in India?
A) Yes.

Q) Do funds realized on the sale/ drafts issued by Exchange Houses in favour of co-operative housing societies/estate developers enjoy free repatriation from India?

A)The funds realized on the sale/ drafts issued by Exchange Houses in favour of co-operative housing societies/estate developers do qualify for repatriation when the securities are purchased out of funds remitted from abroad.

Q) Can proceeds of NRNR be issued as FCNR (B) and repatriated?
A) Yes the NRNR proceeds, in the absence of NRE account can be directly converted as FCNR (B) and can be repatriated.

Q) Can dividend from mutual fund units be repatriated?
Yes, it will quality for full repatriation provided the member continues to be a non- resident.

Q) Can assets held in India by NRIs prior to acquiring the status of NRI be repatriated outside India?
No.

Q) Is the RFC (resident foreign currency) deposit account fully repatriable?
A) This account can be opened by NRIs who cease to be NRIs after a foreign stay of minimum one year. Deposits in this account consist of foreign remittances as well as transfer from NRE / FCNR account and funds are fully repatriable.

Q) Are the balance held by the Non-Resident in their NRO A/C repatriable?
A) Therefore the balance held in NRO accounts continues to remain no-repatriable. The quantum of deposits representing only current income (like pension, dividend, rent, interest etc.) is permitted to be repatriated outside India.

Q) Can sale proceeds of commercial property acquired by foreign citizens of Indian Origin be remitted out of India?
A) Yes. Repatriation of original investment in respect of properties purchased by foreign citizens of Indian origin on or after 26th May 1993 will be allowed to be remitted up to the consideration amount originally remitted from abroad provided the property is sold after a period of three years from the date of the final purchase deed or from the date of payment of final installment of consideration amount, whichever is later. An application should be made to the Central Office of Reserve Bank within 90 days of the sale of property in form IPI 8.

Q) What are the repatriation limits on income / interest?
A) Repatriation of Income/interest earned on investments/deposits held in India by NRIs on non-repatriation basis is subject to the following limits:

Q) Income/interest accruing during the financial year 1994-95 and onwards on bank deposits and investments held by A) NRIs with non-repatriation benefits will be eligible for repatriation as under:

  • Up to U.S. $ 1,000 or its equivalent in full and one-third of the balance income earned during the financial year 1994-95;
  • Up to U.S. $ 1,000 or its equivalent in full and two third of the balance income earned during the financial year 1995-96;
  • The entire income earned during the financial year 1996-97 and onwards.
  • The entire income earned during the financial year 1996-97 and onwards.

The investment/principal amount of deposits made/held on non-repatriation basis however, will not be allowed to be repatriated abroad.

Q) Under the Portfolio Management Scheme, can capital gains be repatriated?
A) Yes. The dividend and the capital originally invested along with the capital gains thereon can be repatriated only after the tax is paid and a no-objection certificate is obtained from the concerned Department. An NRI should authorize only one branch of only one bank in India for the portfolio management scheme, though.

Q) What is the procedure to be followed for making investment in the schemes of domestic Mutual Funds or public sector bonds with repatriation benefits?
A) NRIs who makes investment in domestic Mutual Funds or Public Sector Bonds, with repatriation benefits shall make payment either by inward remittance through normal banking channels or out of funds held in NRE/FCNR account.

Q) Can NRIs invest in 100% Export Oriented Units on repatriation basis?
A) Yes. NRIs can invest in 100% Export Oriented Units on repatriation basis, provided such investment is within the sectoral ceilings prescribed in Annexure B to Notification FEMA 20/2000 RB dated 3rd May 2000.

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