NRI Repatriation from India: NRE, NRO and the USD 1 Million Route
For non-residents, moving money out of India is less about permission and more about documentation. The rules are settled; the delays come from paperwork that does not match.
Three account types, three different roles
- NRE (Non-Resident External) — funded from foreign earnings, maintained in rupees. Both principal and interest are freely repatriable, and the interest is exempt from Indian income tax.
- NRO (Non-Resident Ordinary) — for income arising in India: rent, dividends, pension, proceeds from selling property. Interest is taxable and TDS applies. Repatriation is subject to an annual limit.
- FCNR (B) — a term deposit held in foreign currency, which removes exchange-rate risk on the principal and is freely repatriable.
Choosing the wrong account is the most common structural error. Indian rental income deposited into an NRE account is a problem; foreign salary parked in an NRO account needlessly complicates repatriation later.
The USD 1 million scheme
Balances in an NRO account — including the sale proceeds of property and other assets — may be remitted abroad up to USD 1 million per financial year, subject to payment of applicable taxes and the required certification. The limit is per person per financial year, so a couple holding assets jointly has more headroom than is often assumed.
Certain current-account remittances sit outside this limit, and inherited assets follow their own documentary requirements.
Form 15CA and 15CB
Before the bank remits, you generally provide:
- Form 15CB — a certificate from a chartered accountant confirming the nature of the payment, the taxability of the amount, and the rate at which tax has been deducted, including any treaty relief
- Form 15CA — your own declaration filed on the income tax portal, referencing the 15CB where required
Not every remittance needs both; certain categories and small-value payments are exempt. But where the bank asks, the forms must be consistent with each other and with the underlying transaction, or the remittance stalls.
Property sales in particular
Selling Indian property as a non-resident brings its own sequence: TDS is deductible by the buyer at rates applicable to non-residents, which are considerably higher than the resident rate and are applied to the sale consideration rather than the gain. Where the actual capital gain is lower than the amount implied by that TDS, apply for a lower or nil deduction certificate under Section 197 before the transaction. Recovering excess TDS afterwards through a refund claim takes far longer.
Treaty relief
India's Double Taxation Avoidance Agreements can reduce the rate on interest, dividends and capital gains. Claiming relief requires a Tax Residency Certificate from your country of residence and Form 10F. Banks will ask for these; having them ready before the remittance is the difference between a same-week transfer and a month of correspondence.
Planning a remittance, a property sale, or need Form 15CB certification? Talk to Kunal P Shah & Co — we advise NRIs on FEMA and cross-border tax matters.