Remittance Facilities
for Non-Resident Indians / Persons of Indian Origin / Foreign Nationals
1.
Remittance facilities for Non-Resident Indians (NRIs)/ Persons of Indian Origin
(PIO) and Foreign Nationals.
The
Regulations for transfer of assets outside India by a person, whether resident
in India or not, are given in the Notification No. FEMA 13/2000-RB dated
May 3, 2000, as amended from time to time. Accordingly, remittance
of funds from the sale of capital assets in India held by a person, whether
resident in or outside India, requires approval of the Reserve Bank except to
the extent provided in the Foreign Exchange Management Act, 1999 (FEMA) or
Rules or Regulations made there under.
2. Definition of NRI/ PIO
In terms of
Regulation 2 of FEMA Notification No.13 dated May 3,
2000, Non-Resident Indian (NRI) means a person resident outside
India who is a citizen of India. Person of Indian Origin (PIO) means a citizen
of any country other than Bangladesh or Pakistan who had (a) at any time held
Indian passport or (b) he or either of his parents or any of his grandparents
was a citizen of India by virtue of the Constitution of India or the
Citizenship Act, 1955 or (c) the person is a spouse of an Indian citizen or a
person referred to in (a) or (b).
3. Remittance of current income
3.1
Remittance outside India of current income like rent, dividend, pension,
interest, etc., in India, of the account holder is a permissible debit to the NRO
account. Authorised Dealer banks may also allow repatriation of current income
like rent, dividend, pension, interest, etc. of NRIs who do not maintain an NRO
account in India, subject to payment of applicable taxes as prescribed by
Central Board of Direct Taxes.
3.2 NRIs/
PIO have the option to credit the current income to their Non Resident
(External) Rupee account, provided the Authorized Dealer bank is satisfied that
the credit represents current income of the non-resident account holder and
income tax thereon has been deducted / provided for.
3.3 Foreign
nationals who come to India on employment and become residents in terms of
section 2 (v) of FEMA, 1999, and are eligible to open/ hold a resident savings
bank account, are permitted to re-designate their resident account maintained
in India as NRO account on leaving the country after their employment to enable
them to receive their legitimate dues subject to certain conditions.
4. Remittance of assets by a foreign
national of non-Indian origin
4.1 A foreign
national of non-Indian origin who has retired from an employment in India or
who has inherited assets from a person referred to in section 6(5) of the Act
or who is a widow of an Indian citizen who was resident in India, may remit an
amount not exceeding USD one million, per financial year (April-March), subject
to the satisfaction of the Authorised Dealer bank, on production of documentary
evidence in support of acquisition/ inheritance of assets and payment of
applicable taxes in India, if any.
4.2 These
remittance facilities are not available to citizens of Nepal and Bhutan.
4.3 When a
person resident in India leaves India for a country (other than Nepal or
Bhutan) for employment/business/vocation outside India or with an intention to
stay outside India, AD Category-I banks may permit such foreign nationals to
re-designate their resident account maintained in India as NRO account on
leaving the country after their employment to enable them to receive their
pending bona fide dues, subject to the following conditions:
a.
AD Category-I bank should obtain the full details
from the account holder about his legitimate dues expected to be received into
his account.=
b.
AD Category-I bank has to satisfy itself as regards
the credit of amounts which have to be bona fide dues of the account holder
when she / he was a resident in India.
c.
The funds credited to the NRO account should be
repatriated abroad immediately, upon subject to the AD Category-I bank
satisfying itself regarding the payment of the applicable Income tax and other
taxes in India.
d.
The amount repatriated abroad should not exceed USD
one million per financial year.
e.
The debit to the account should be only for the
purpose of repatriation to the account holder’s account maintained abroad.
f.
There should not be any other inflow / credit to
this account other than that mentioned at point (a) above.
g.
AD Category-I bank should put in place proper
internal control mechanism to monitor the credits and debits to this account.
h.
The account should be closed immediately after all
the dues have been received and repatriated as per the declaration made by the
account holder mentioned at paragraph (a) above.
5. Remittance of assets by NRI/PIO
5.1 A
Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit an
amount up to USD one million, per financial year, out of the balances held in
his Non- Resident (Ordinary) Rupee (NRO) account / sale proceeds of assets
(inclusive of assets acquired by way of inheritance or settlement), for all
bona fide purposes, subject to payment of applicable taxes in India, if any.
5.2 NRI/PIO
may remit sale proceeds of immovable property purchased by him out of Rupee
funds (or as a person resident in India) as indicated in paragraph 5.1 above
without any lock-in-period.
5.3 In
respect of remittance of sale proceeds of assets acquired by way of inheritance
or legacy or settlement for which there is no lock-in period, NRI / PIO may
submit to the Authorised Dealer documentary evidence in support of inheritance
or legacy of assets, an undertaking by the remitter in the prescribed formats.
Settlement is also a mode of inheritance from the parent, the only difference
being that the property under the settlement passes to the beneficiary on the
death of the owner/parent without any legal procedures/hassles and helps in
avoiding delay and inconvenience in applying for probate, etc. If the property
is received by NRI/PIO by way of settlement without the settler retaining life
interest, it may be reckoned as transfer by way of gift and the remittance of
sale proceeds of such property would be guided by the extant instructions on
remittance of balance in the NRO account.
5.4 (a) A
person or his successor who has acquired immovable property in accordance with
Section 6(5) of FEMA, 1999 cannot repatriate sale proceeds of such property
outside India except with prior permission of the Reserve Bank.
(b) The
facility of remittance of sale proceeds of other financial assets is not
available to citizens of Pakistan, Bangladesh, Nepal and Bhutan.
6. Remittance of Salary
6.1 A
citizen of a foreign State, resident in India, being an employee of a foreign
company or a citizen of India, employed by a foreign company outside India and
in either case on deputation to the office/ branch/ subsidiary/ joint venture/
group company in India of such foreign company may open, hold and maintain a
foreign currency account with a bank outside India and receive the whole salary
payable to him for the services rendered to the office/ branch/ subsidiary/
joint venture/ group company in India of such foreign company, by credit to
such account, provided that income tax chargeable under the Income-tax Act,1961
is paid on the entire salary as accrued in India.
6.2 A
citizen of a foreign state resident in India being in employment with a company
incorporated in India may open, hold and maintain a foreign currency account
with a bank outside India and remit the whole salary received in India in
Indian Rupees, to such account, for the services rendered to the Indian
company, provided that income-tax chargeable under the Income-tax Act, 1961 is
paid on the entire salary accrued in India.
[The term
‘company’ will include a ‘Limited Liability Partnership’ as defined under the
LLP Act, 2008]
7. Repatriation of sale proceeds of
residential property purchased by NRIs / PIO out of foreign exchange *
7.1
Repatriation of sale proceeds of residential property purchased by NRI / PIO is
permitted to the extent of the amount paid for acquisition of immovable property
in foreign exchange received through banking channels. The facility is
restricted to not more than two such properties. The balance amount can be
credited to the NRO account and can be remitted under USD one million facility
as mentioned in paragraph 5.1.
7.2
Authorised Dealer banks may permit repatriation of amounts representing the
refund of application / earnest money / purchase consideration made by the
house building agencies / seller on account of non-allotment of flat / plot /
cancellation of bookings / deals for purchase of residential / commercial
property, together with interest, if any (net of income tax payable thereon),
provided the original payment was made out of NRE/ FCNR (B) account of the
account holder, or remittance from outside India through normal banking
channels and the Authorized Dealer bank is satisfied about the genuineness of
the transaction. Such funds may also be credited to the NRE / FCNR (B) account
of the NRI / PIO, if they so desire.
7.3
Authorised Dealer banks may allow repatriation of sale proceeds of residential
accommodation purchased by NRIs/ PIO out of funds raised by them by way of
loans from the authorized dealer banks / housing finance institutions to the
extent of such loan/s repaid by them out of foreign inward remittances received
through normal banking channel or by debit to their NRE / FCNR(B) accounts.
*Definition
of PIO for this purpose will be as stated in Notification No. FEMA 21/2000-RB dated
03.05.2000.
8. Facilities for students
8.1 Students
going abroad for studies are treated as Non- Resident Indians (NRIs) and are
eligible for all the facilities available to NRIs under FEMA.
8.2 As
non-residents, they will be eligible to receive remittances from India up to
(i) limits prescribed under the Liberalized Remittance Scheme which would
include remittances from close relatives in India towards maintenance and
remittances towards their studies. However, for the purpose of studies, the
limits would be as demanded by the university abroad; and (ii) USD 1 million
per financial year, out of sale proceeds of assets / balances in their NRO
account maintained with an Authorised Dealer bank in India.
8.3 All
other facilities available to NRIs under FEMA are equally applicable to the
students.
8.4
Educational and other loans availed of by them as residents in India will
continue to be available as per FEMA regulations.
9. Income-tax clearance
The
remittances will be allowed to be made by the Authorized Dealer banks on
production of an undertaking by the remitter in the formats prescribed by the
Central Board of Direct Taxes, Ministry of Finance, Government of India from
time to time. Reserve Bank of India will not issue any instructions under FEMA,
1999 clarifying tax issues. It shall be mandatory on the part of Authorised
Dealers to comply with the requirement of tax laws, as applicable.
10. International Credit Cards
Authorised Dealer banks have been permitted to issue International Credit
Cards to NRIs/ PIO, without prior approval of the Reserve Bank. Such
transactions may be settled by inward remittance or out of balances held in the
cardholder’s FCNR (B) / NRE/ NRO accounts.
Ref: RBI/2015-2016/80-Master Circular No.8/2015-16July 01
