Earning money has been one of the vital reasons for Indians shifting base to other countries. However, every NRI is keen to repatriate his current income and assets to India or to hold it as convertible Forex in India. The Indian Government has liberalized provisions as to repatriation for all the assets either acquired as NRI from Forex or Rupee Funds or which was acquired as a resident in India.
The government of India and the RBI has set up certain directives to facilitate NRI repatriation to India.
The NRIs are permitted to repatriate rupee funds/assets from India as under:
-
All types of current income
in the nature of Interest, Dividends, Pension, Rent, Mutual
Fund distribution is permitted for repatriation.
-
NRIs are allowed to repatriate the rupee
funds as under:
a. to meet expenses in connection with education of
their children
b. to meet the medical expenses abroad of the
account holder or his family members.
c. Sale proceeds of property held for more
than 10 years.
-
Any legacy, Bequest, Inheritance by
the NRI.
The remittance on above account has an overall limit of US$
1 million per year
-
Current Income Repatriation
All incomes 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.
-
Immovable Property
-
The sale proceeds of the property
is permitted for repatriation as under:
1. Exempted from RBI permission
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.
The sale proceeds of the immovable property acquired by the
NRI in foreign exchange is allowed to be repatriated up to the
value of Purchase consideration paid in Foreign Exchange.
-
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.
-
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.
-
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. medical expenses abroad of the account holder or his family
members up to USD 100000.
Although, this individual limits 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.
NRIs are eligible to apply for repatriation of Income for
all the years from 1996-97 onwards.
The NRI BONDS, 1988 and
NRI BONDS (Second Series) issued by the State Bank
of India were issued without repatriation right as to principle
as well as interest. It was subsequently permitted by the Reserve
Bank of India for repatriation of the maturity value comprising
interest on the bonds being in the nature of current income. NRIs
can still exercise the right to repatriate the income on maturity
of these bonds. Reparability works out to about 30% of the maturity
value.
