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Key Takeaways: There are times that you may want to send funds back to your country of residence from your NRI account. These transactions fall under outward remittances and you can carry them out via an NRE or NRO account. Let us take a look at what is an outward remittance and the different transactions that fall under it.
What is an outward remittance?
From India's perspective, any money which goes out of the country is categorised under an outward remittance. There are primarily two reasons why you would want to send money abroad. One, because you are a resident of India and want to support family or relatives staying abroad, e.g. tuition fees for your child's international studies. Two, you are an NRI looking to repatriate funds from an NRI account into your country of residence. In this article, we will focus on repatriation as a type of outward remittance.
What is repatriation?
Over years of living abroad, you may have accumulated funds in all your NRI accounts. You would have deposited your foreign earnings in an NRE account and your income in India into an NRO account. Now you want the money available to you abroad. That's when you will need to make an outward remittance from India to your country of residence. However, it is important to understand the documentation and compliance requirements so that you can transfer funds smoothly.
All outward remittances from India come under the purview of RBI's Foreign Exchange Management Act (FEMA).
Repatriation from an NRE account1
Since an NRE account is exclusively meant for your foreign earnings, you can transfer the money back to your country of residence at any time. According to the RBI, the funds in this account are fully repatriable and without an upper transaction limit.
Get in touch with your bank's representative who will assist you with the documentation. You will have to keep your NRE account information ready to complete the outward remittance form.
To know about what more you can do with an NRE account, click here.
Repatriation from an NRO account
Any income you earn in India goes into an NRO account. The sources of income include proceeds from the sale of your house, rental income from your existing home in India, earnings from investments in the form of interest or dividends and cash gifts from resident Indian relatives. According to RBI, you can repatriate up to USD 1 million in any financial year.2
Here are the documents you will need to complete the outward remittance of funds from an NRO account2:
From your bank in the current country of residence:
You can contact any reputed Chartered Account in India to help with the certificates mentioned above.
Final Note: Outward remittances are the best way for you as an NRI to route your earnings back to your country of residence when you need them. Though you can initiate these remittances from both NRE and NRO accounts, the process is more seamless with the former. With benefits like full repatriation and unlimited transaction amounts, it is worth considering having an NRE account if you haven't got one already.