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Repatriation Procedures for NRIs/ Indian Overseas

 

Is holding bank accounts and investments in India are entitled to repatriate funds abroad, subject to certain guidelines issued by the Reserve Bank of India. Accordingly:

  • Current income earned from interest on deposits, dividends, rent, mutual fund distribution from any type of deposit, investment or properties is allowed for repatriation net of income tax in India. This includes income earned from business in India by a NRI as proprietor, partner or joint venture entity.
  • Proceeds of sale from immovable property are repatriable as per the following norms:

a) without permission from the RBI
Sale proceeds from property, upto a maximum of USD 100,000 per annum can be repatriated, after payment of tax. However, the property should have been acquired in accordance with the provisions of foreign exchange laws in force at that time.
The proceeds from the sale of upto 2 residential properties only are allowed. The balance is repatriable through an NRO Account.
Further exemption is permitted from the RBI up to the value of purchase consideration paid in foreign exchange
Furthermore, refund of application or earnest money from property seller in case of non-allotment of flat or plot; and cancellation of booking for purchase of residential or commercial properties, together with interest, net of taxes, provided original payment is made out of NRE/FCNR(B) account/inward remittances is allowed.

b) with RBI permission
For NRIs who had acquired immovable property in India, and who are not covered under clauses discussed above, the proceeds of the sale of such immovable property can be repatriated with special permission from the RBI only on the grounds of adversity.

The sale proceeds or realization of assets in India from inheritance, legacy or bequest can be allowed for repatriation only up to USD 100, 000 per calendar year, under general RBI permission. This has been enhanced to an overall limit, including remittances of proceeds of immovable property held for more than 10 years, remittance for education and medical purposes, of  upto USD 1 million.

However, RBI permission is mandatory on grounds of adversity in cases not covered by general permission of the RBI.

Other assets permitted for repatriation under special permission of the RBI are:
Bank and company deposits, provident fund and superannuation., LIC claims, sale of mutual fund units, non-convertible debentures, stocks and shares held in Indian companies under FDI and Portfolio Investment Scheme, and debt instruments of the Government of India

In addition, repatriation from the NRO account can be made to meet

  • educational expenses of their children, upto USD 30,000 per annum
  • medical expenses for self or family upto USD 1,00,000

Returning NRIs/ PIOs can continue to hold property they invested in abroad, and income from such an asset can be remitted to NRE and FCNR (B) accounts. Proceeds of sale of assets held outside India can be credited to RFC account

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