NRIs CORNER - REMITTANCE OF FUNDS / ASSETS OUTSIDE INDIA

Non Resident Indian are permitted to remit outside India various incomes and principal amount which were hitherto non repatriable. These are :

01.

Foreign Exchange Regulations Act, 1973 had clear instructions and procedures laid down for repatriation of almost all incomes arising in India which were classified as non-repatriable. These included rental income, interest from firms, share of partnership firms, interest on debentures etc. 

02.

Foreign Exchange  Management Act, 1999 has not provided for a specific clause in this regards, although the provisions of "Permissible Debits" under Foreign Exchange Management (Deposit) Regulations, 2000 clearly mention "remittance outside India of  current income in India of the account holder net of applicable taxes". 

03.

Hon'ble Finance Minister while presenting the Union Budget, 2002-03 in his Budget Speech has proposed that " NRIs will be free to repatriate in foreign currency their current earnings in India such as rent, dividend, pension, interest and the like based on appropriate certification.

04. 

Subsequently, the Reserve Bank of India [ RBI ] vide Circular dated. 14th May, 2002 has clarified / instructed bankers to allow repatriation of  NRIs current income like rent, dividend, pension, interest etc. of  out of NRO account and / or credit of such income into NRE account and in case of NRIs who may not be maintaining NRO account , the RBI has prescribed for the bankers to obtain :

(i) 

Appropriate certificate of Chartered Accountant certifying eligibility of proposed remittance, and

(ii)

Further, certifying that applicable taxes have been paid / provided for.

.01

Sale proceeds of house property hitherto were repatriable to the extent of   foreign exchange equivalent of purchase price / cost of acquisition, provided, an NRI had purchased such property and held such property for 3 years and purchased the same out of balances held in Non Resident External (NRE) / Foreign Currency Non Repatriable (FCNR)  or by way of foreign exchange remittance from abroad, provided such property was held for a minimum period of 3 years.

.02

The RBI has removed the requirement of minimum holding period of 3 years.

Accordingly, every case of sale of house property irrespective of period of holding will be eligible for repatriation benefits subject to restrictions of repatriation of 2 residential properties only. 

.01

Hitherto the principal amount of deposit held in Non Resident Non Repatriable (NRNR) account was non-repatriable.

.02

The interest amount enjoyed  the benefits of tax exemption as also full repatriation.

.03

With effect from 1st April, 2002, entire balances in NRNR account has been granted the benefit of repatriation. 

.04

Accordingly, proceeds of deposits maturing on or after 1st April, 2002 may be credited to NRI account holder's Non Resident External account (NRE) which may be retained as such or be transferred to Foreign Currency Non Resident account or remitted / repatriated abroad.

.01

NRIs are allowed to repatriate  / remit abroad amount upto US$ 1 mn per financial year out of balance held in Non Resdient Ordinary account [ NRO ] which is per se non-repatriable.

.02

Such balance should have been created out of genuine transactions  permitted at the relevant time under the foreign exchange law applicible being Foreign Exchange Regulations Act ,1973, [ FERA ] Foreign Exchange Management Act, 1999 [ FEMA ],

.03