Guidelines governing repatriation for Non-Resident Indians (NRI’s), Overseas Citizens of India (OCI’s) & Persons of Indian Origin (PIO)
Repatriation of funds from India by NRIs on sale of property in India
NRIs are allowed to repatriate an amount up to USD one million, per financial year (from April to March), out of balance held in their NRO account / sale proceeds of assets/ assets acquired in India by way of inheritance/ legacy.
Remittance out of India except certain remittances covered under the RBI’s exemption list) requires a CA certificate in the Form 15CB and a self-declaration by the remitter in Form 15CA. The AD Bank will demand these forms to be submitted online before effecting remittance. This is done to ensure that the funds being remitted are sourced through legal means and the taxes due thereon are duly deducted and paid prior to effecting remittance.
Repatriation of proceeds from sale of property in India
NRI’s, OCI’s & PIO’s may repatriate outside India, the sale proceeds from residential property provided:
- The immovable property was acquired by the seller in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him
- The amount for acquisition of the immovable property was paid in foreign exchange received through banking channels or out of funds held in FCNR(B) account or NRE account [In case an immovable property in India has been purchased out of housing loans (being compliant with extant FEMA guidelines), and the repayments for such loans are made out of remittances received from abroad through banking channels or by debit to the NRE/ FCNR(B) account of such person, such repayments may be treated as equivalent to foreign exchange received]
- The remittance in a given year is capped under the abovementioned limit of USD 1 million and is limited to the sale proceeds of up to two immovable properties held by NRIs/PIO.
- Repatriation of proceeds from sale of property acquired out of rupee funds is available subject to the condition that the property should have been held for a minimum period of 10 years. If property acquired from rupee funds is sold after being held for less than 10 years, remittance can be made if sale proceeds have been held by NRI/ PIO for the balance period in NRO accounts/ any other eligible security, provided such investment is traced to the sale proceeds of the property.
Compliance requirement for repatriation
Remittance out of India except certain remittances covered under the RBI’s exemption list) requires a CA certificate in the Form 15CB and a self-declaration by the remitter in Form 15CA. The AD Bank will demand these forms to be submitted online before effecting remittance. This is done to ensure that the funds being remitted are sourced through legal means and the taxes due thereon are duly deducted and paid prior to effecting remittance.
Repatriation is subject to submission of necessary documentary evidence with the AD Bank and tax compliance in respect of the sums being repatriated.