Non-resident Indians (NRIs) can repatriate funds from India subject to specific guidelines set by the Reserve Bank of India (RBI). Here's an overview of the process:
1. Types of Accounts for Repatriation:
NRE Account (Non-Resident External Account): Funds in an NRE account are freely repatriable, including the principal amount and interest earned. This account is maintained in Indian rupees and is suitable for funds generated abroad or transferred from another NRE/FCNR account.
NRO Account (Non-Resident Ordinary Account): Funds in an NRO account are partially repatriable, subject to certain conditions. For repatriation, an NRI must submit a specific request to the authorized bank and the required documents. The principal amount (after taxes) and up to $1 million per financial year from NRO accounts can be repatriated.
2. Documentation and Conditions for Repatriation:
For repatriating funds from an NRO account, an NRI must submit Form 15CA and 15CB (for amounts over specified thresholds) to a chartered accountant, who verifies the transaction's nature and purposes.
For the repatriation of sale proceeds from property, the NRI needs to provide specific documents related to property sales, such as sale deeds, tax clearance certificates, etc., along with the bank's Form A2.
3. Compliance with RBI Guidelines:
NRIs must comply with RBI guidelines regarding the repatriation of funds, which may include limitations on the amount, purpose, and documentation requirements.
4. Tax Implications:
Taxes may apply on the repatriation of funds from certain types of income like capital gains, interest, etc. NRIs must ensure compliance with Indian tax laws and may need to obtain a Tax Residency Certificate (TRC) from their country of residence to avail of tax benefits.
5. Use of DTAA:
NRIs can also benefit from Double Taxation Avoidance Agreements (DTAA) between India and their country of residence, which may impact the tax liability on repatriated funds.
NRIS must consult with their respective banks, tax advisors, or financial consultants to understand the requirements, limitations, and taxation implications regarding the repatriation of funds from India. Compliance with RBI guidelines and Indian tax laws is essential to ensure smooth and legal repatriation of funds.