NRI repatriation: Meaning, types & documents required

NRI Repatriation is a crucial aspect of the financial planning and management of non-resident Indians (NRIs) living abroad. Whether it's for investment in property, supporting family, or any other personal reason, understanding the nuances of repatriation can make a significant difference.

What is the meaning of NRI repatriation?

NRI repatriation refers to the process of transferring funds from a Non-Resident Indian's bank account in a foreign country to an account in India. This process can involve both the principal amount and any interest earned on it, depending on the type of account used.

The RBI has established specific ceilings and conditions for repatriation, particularly concerning NRO (Non-resident Ordinary) accounts. For instance, NRIs are allowed to repatriate up to USD 1 million per financial year from their NRO account. This limit encompasses the repatriation of both the principal and the interest amount, after the payment of applicable taxes.

For NRE (Non-Resident External) and FCNR (Foreign Currency Non-Resident) accounts, the regulations are more lenient. There is no upper limit on the repatriation of funds, including both the principal and the accrued interest.

Types of repatriable NRI Accounts

Understanding the different types of NRI accounts is essential for effective fund management and repatriation. Here's a deeper dive into each type:

NRO (Non-Resident Ordinary) Account: This type of account is tailored for NRIs who have earnings in India, such as rental income, dividends, or pensions. The repatriation from NRO account is subject to RBI regulations, which currently permit the repatriation of up to USD 1 million per financial year, after clearing all applicable taxes. It's worth noting that the interest earned on the NRO account is taxable in India, making it essential for account holders to consider the tax implications.
NRE (Non-Resident External) Account: The NRE account is a perfect choice for NRIs looking to park their foreign earnings in India, maintaining the income in Indian Rupees. The standout feature of NRE account repatriation is its flexibility, allowing for the free movement of funds, including both the principal and the interest, without any caps. Additionally, the interest earned on NRE accounts is exempt from tax in India, making it an attractive option for savings and investments.
FCNR (Foreign Currency Non-Resident) Account: Designed for those NRIs who prefer to keep their savings in foreign currency, the FCNR account safeguards against exchange rate risks by allowing deposits in currencies like USD, GBP, EUR, etc. This account type stands out for its full repatriation capabilities of both principal and interest, without facing any ceiling limits or tax implications on the interest earned.

At Axis Bank, the NRE Savings Account allows NRIs to deposit their overseas income into a Rupee denominated account, earning tax-free interest in India, while the NRO Savings Account is ideal for managing and accessing income earned in India, like dividends and pensions. Additionally, Axis Bank’s FCNR Deposit provides a secure investment opportunity with assured returns in six major foreign currencies and flexible tenure options, safeguarding against currency risks and enhancing your financial portfolio.

Documents required for repatriation

For seamless repatriation from India, NRIs need to furnish specific documents as part of the regulatory compliance set by the Reserve Bank of India under FEMA guidelines.

NRE / FCNR Account Repatriation requirements:

Copy of the NRI’s passport showing their identity and address.
Bank statements as proof of the existence of the NRE/FCNR accounts.
A declaration form stating that the funds to be repatriated are eligible for transfer and comply with FEMA regulations.

NRO Account Repatriation requirements:

Application for Remittance Abroad (ARA) form or a request letter for repatriation.
Photocopy of the passport and valid visa or residence permit.
Bank statements as proof of the existence of the NRO account.
Form 15CA, a self-declaration regarding the remittance of funds from India.
Form 15CB, a certificate from a Chartered Accountant verifying the payment of all due taxes.

Also Read: Can I convert my Savings Account to NRE Account?

FEMA rules governing NRI repatriation

FEMA, or the Foreign Exchange Management Act, sets the legal framework for governing the repatriation of funds for NRIs from India. According to FEMA, NRIs are allowed to repatriate up to USD 1 million per financial year from their NRO accounts, which may include their incomes such as rents, dividends, or pension from India after appropriate tax compliance.

For funds in NRE and FCNR accounts, FEMA rules allow for full repatriation of both the principal and interest without any upper limit, and these transfers are not taxable in India. Furthermore, FEMA mandates that NRIs need to have an account with an authorised dealer bank in India to facilitate repatriation and must comply with documentation such as Forms 15CA and 15CB for tax clearance.

Disclaimer: This article is for information purpose only. The views expressed in this article are personal and do not necessarily constitute the views of Axis Bank Ltd. and its employees. Axis Bank Ltd. and/or the author shall not be responsible for any direct / indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information. Please consult your financial advisor before making any financial decision.