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Repatriation for NRIs: All You Need to Know
Reading Time: 3 Minutes
Key Takeaways: If you are an NRI, you will want to move money from your NRI accounts back to your home country at some point. Let us read more about whether you can send money back from all types of accounts and the documents you will need.
Repatriation means the ability of funds to be transferred freely across countries by converting to foreign currency. Once you become an NRI, you will need to open an NRO, NRE or FCNR-B account in India. While NRO accounts are meant for funds earned in India, NRE accounts hold your foreign income. When you move money from your NRO account into your NRE account or to an account in your country of residence, it is called repatriation. To know more about NRE accounts, click here. Now let us take a look at what qualifies as repatriable income.
Types of Income Sources
We can broadly group all the income sources of these accounts into the following categories:
- Funds held when you moved abroad
- Inheritance in the form of money
- Funds from overseas remittances made to India for investments or other purposes
- Income earned through Indian assets or investments
What and How Much Can You Repatriate[1]?
| Type of Income | Repatriation Limit |
|---|---|
| Current Income: This includes salary, investments, interest, profits of any business or proprietorship deposited in an NRE account. |
Without limit |
| Movable Assets: Balance held in your NRO account, sale proceeds of assets in India acquired by way of inheritance, legacy or under a settlement deed by parents or a close relative. |
USD 1 million per financial year |
| Immovable Assets: Sales proceeds from a residential property bought in India according to the Foreign Exchange Management Act-FEMA, 1999. (FEMA does not allow you to purchase agricultural land, a farmhouse or plantation as an NRI). |
USD 1 million per financial year |
FEMA Rules Governing Repatriation[1]
- There are income tax implications in India each time you repatriate funds
- You can cumulatively repatriate current income earned in any year in that year itself or the subsequent years
- You can transfer or repatriate funds from your NRE account freely without any limit
- Your NRO account balance should hold legitimate dues receivable in India and not through borrowing from another person or funds transfer from another NRO account
- In case of residential property, you can repatriate sale proceeds of up to two such properties
Can You Cross the Repatriation Limit?[2]
Yes, the RBI does allow you to repatriate funds higher than the preset limits only after explicit approval. The situations in which you may request for increasing the permissible limit include medical emergencies, children’s education or to purchase property back in your country of residence.
Final Note: Repatriation through your NRE account is faster and with no limits. If you do decide to send money back to your country of residence from an NRO account, you need to be aware of the limits. Another important point to consider is that the limit of USD 1 million for your NRO account is valid for one financial year. Which means, if you transfer less than this amount, you will not be able to utilise the balance in the next financial year.
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