NRI Repatriation
NRIs remit their earnings to India from their savings abroad but would like to enjoy the flexibility of repatriating the same in case of adversity. With this in view, the government of India has provided for repatriation of funds from the non-resident's forex or rupee funds.
RBI directives with respect to repatriation of funds from India:
The government of India and the RBI has set up certain directives to facilitate NRI repatriation to India.
1.
Current Income Repatriation
All income either in the nature of interest, dividends,
rent, MFund distribution from any type of deposit,
investment or properties is allowed for repatriation net of
income tax in India. This includes income earned from
business in India by a NRI as proprietor, partner or joint
venture entity.
2.
Immovable Property
The sale proceeds of the property is permitted for
repatriation as under:
1. Exempted from RBI permission
1. Property held for more than 10 years: NRIs/PIOs are permitted to repatriate the funds held in their NRO A/c up to US$ 100,000 a year where sale proceeds of immovable property held by them for period of not less than 10 years is subject to payment of taxes.
I. The property was acquired by the seller in accordance with the provisions of foreign exchange law in force at the time of acquisition.
II. If the property is sold after 3 years of date of Purchase Deed or final payment of Purchase consideration which ever is later. However, the above lock in period of 3 years is not applicable in case of such property sold by NRI/PIO on or after 19.08.2002
III. Further exemption from RBI permission comes only up to the value of purchase consideration paid in Foreign Exchange.
2.
RBI permission essential
For NRI who had acquired immovable property in India, and
who is not eligible under clause I above. Sale proceeds of
such immovable property can be repatriated by obtaining
special permission of the RBI on the ground of adversity.
3.
Inheritance, Legacy or Bequest
The sale proceeds or realization of assets can be allowed
for repatriation only under the following grounds.
I.
Exempted from RBI Permission:
NRIs/PIOs will be able to remit up to US$100000 per calendar
year out of the assets in India acquired by them by way of
inheritance/legacies. This has been enhanced to an overall
limit (including remittances of proceeds of immovable
property held for more than 10 years, remittance for
education and medical purposes) of US$ 1 million.
II.
RBI permission essential:
Besides the clause I seeking exemption from RBI permission
and for any other assets, repatriation is allowed only after
obtaining special permission of the Reserve Bank India on
specific reasons such as adversity and subject to conditions
as specified in the permission.
4.
Other assets (Without repatriation Rights)
The sale proceeds or realization of NRI assets is permitted
for repatriation as follows:
- Deposits with Banks/Firms/Companies.
- P.F/Superannuation Balance
- Life Insurance Maturity income/claims
- Sale proceeds from shares & securities
- Any other assets/Immovable Property
NRI repatriation is allowed only by obtaining special
permission of the RBI on the ground of adversity etc. and
subject to conditions as specified in the permission.
5.
NRIs/PIOs are allowed to repatriate the funds held in their
NRO A/c for:
i. education of their children, where they can spend up to
USD 30000 per academic year.
ii. the medical expenses abroad of the account holder or his
family members up to USD 100000.
Although, this individual limit has been enhanced to an overall limit of US$ 1 million, as effective from 13 January 2003 subject to further review by RBI. This can be considered aggregate of remittances of proceeds of immovable property held for more than 10 years, proceeds of inherited property, remittance for education and medical purposes.
Bank balance and investments in India are entitled to be repatriated to funds abroad, subject to certain guidelines issued by the Reserve Bank of India. Accordingly:
· Current income earned from interest on deposits, dividends, rent, mutual fund distribution from any type of deposit, investment or properties is allowed for repatriation net of income tax in India. This includes income earned from business in India by a NRI as proprietor, partner or joint venture entity.
· Proceeds of sale from immovable property are repatriable as per the following norms:
a) without permission from the RBI
Sale proceeds from property,
upto a maximum of USD 100,000 per annum can be repatriated,
after payment of tax. However, the property should have been
acquired in accordance with the provisions of foreign
exchange laws in force at that time.
The proceeds from the sale of upto 2 residential properties
only are allowed. The balance is repatriable through an NRO
Account.
Further exemption is permitted from the RBI up to the value
of purchase consideration paid in foreign exchange
Furthermore, refund of application or earnest money from
property seller in case of non-allotment of flat or plot;
and cancellation of booking for purchase of residential or
commercial properties, together with interest, net of taxes,
provided original payment is made out of NRE/FCNR(B)
account/inward remittances is allowed.
b) with RBI permission
For NRIs who had acquired immovable property in India, and
who are not covered under clauses discussed above, the
proceeds of the sale of such immovable property can be
repatriated with special permission from the RBI only on the
grounds of adversity.
The sale proceeds or realization of assets in India from inheritance, legacy or bequest can be allowed for repatriation only up to USD 100, 000 per calendar year, under general RBI permission. This has been enhanced to an overall limit, including remittances of proceeds of immovable property held for more than 10 years, remittance for education and medical purposes, of upto USD 1 million.
However, RBI permission is mandatory on grounds of adversity in cases not covered by general permission of the RBI.
Other assets
permitted for repatriation under
special permission of the RBI
are:
Bank and company deposits, provident fund and
superannuation., LIC claims, sale of mutual fund units,
non-convertible debentures, stocks and shares held in Indian
companies under FDI and Portfolio Investment Scheme, and
debt instruments of the Government of India
In addition, repatriation from the NRO account can be made
to meet
· educational expenses of their children, upto USD 30,000 per annum
· medical expenses for self or family upto USD 1,00,000
Returning NRIs/ PIOs can continue to hold property they invested in abroad, and income from such an asset can be remitted to NRE and FCNR (B) accounts. Proceeds of sale of assets held outside India can be credited to RFC account