FAQ RELATING TO REPATRIATION

1. Can an NRI remit money outside India?

Ans. NRIs and PIOs (other than citizens of Pakistan and Bangladesh) can remit their money under following circumstances:

a. For any bonafide purpose (other than sale proceeds of immovable property);

b. Sale proceeds of immovable property acquired out of rupee sources (when resident or from the NRO account);

c. Sale proceeds of immovable property acquired by inheritance / legacy;

d. Sale proceeds of immovable property acquired out of funds remitted from abroad/NRE/FCNR accounts;

e. Maintenance of close relatives abroad by citizens of foreign states (other than Pakistan) employed in India, who are not permanently resident in India;

f. Foreign student/trainee (other than citizen of Nepal or Bhutan or a person of Indian origin);

g. Foreign tourists from NRO account;

h. Current income (Rent, dividend, pension, etc.) out of NRO account.

2.What is the procedure required for remittance of money out of India?

Ans. In order to remit money outside India, an NRI is required to obtain a certificate from a Chartered Accountant, which has to be submitted to RBI along with an undertaking, which will be signed by the individual himself or by any other person authorized by him.

3.Can proceeds on sale of shares be repatriated out of India?

Ans. An NRI should authorize only one branch of only one bank in India for the Portfolio Investment Scheme (PIS). Power of attorney should be granted in favour of a resident Indian/relatives to carry out the various formalities. The dividend and the capital originally invested along with the capital gains thereon, be repatriated only after he obtain a certificate from a Chartered Accountant declaring that proper tax has been paid or satisfactory arrangements have been made to pay it in proper time or if the NRI so wishes a no-objection certificate can be obtained from the Income-tax Department.

On receiving such NOC or Chartered Accountant’s certificate, the proceeds would be repatriated or credited to the NRE/FCNR account of the NRI (which is equivalent to repatriation).

4.What are the provisions regarding repatriation of sale proceeds on sale of immovable property?

Ans. In the event of sale of immovable property by a PIO, the sale proceeds may be repatriated outside India, provided —

The immovable property was acquired by the PIO in accordance with the provisions of the foreign exchange law in force at the time of acquisition by him or FEMA. There is no lock in period for the sale of such acquired properties.

The amount to be repatriated does not exceed the amount paid for acquisition of the immovable property in forex and in case of residential property the repatriation of sale proceeds is restricted to not more than two such properties. There is no restriction on the repatriation of number of commercial properties.

5.Can income earned in India repatriated from India?

Ans. PIO can freely rent out their immovable property, whether purchased through the application of forex or otherwise, without seeking any permission from the RBI. The rental income being a current account transaction is repatriable outside India, only if proper tax has been paid on the same. The AD is empowered to arrange for such repatriation.

6.What are the rules pertaining to investments by NRIs in shares and debentures of Indian Cos., on repatriation?

Ans. NRIs can invest in shares & debentures of Indian companies on repatriation basis as per general permission granted by RBI provided,

a. The investee company is not engaged in any activity outside the automatic route of RBI

b. Subject to sectoral caps on investment as prescribed by RBI

c. Funds for investment are received through foreign inward remittance or to the debit of NRE/FCNR accounts.

d. Upon disinvestments on a recognized stock exchange in India, through a stockbroker at ruling market prices the proceeds can be repatriated net of Indian Taxes.

7.Can NRI place deposits with companies on repatriation basis?

Ans. Yes, provided the company accepts the deposits under public deposit scheme for the period not exceeding 3 years and has obtained necessary ratings etc.

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