Repatriation Rules for NRIs/ Indians Overseas

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.