24 July 2021
When a person becomes Non Resident Indian under Foreign Exchange Management Act 1999 (FEMA), the investments/assets held by him in India could be of different nature depending upon the mode of acquisition of such investments/assets. The same can be broadly classified as Repatriable investment or Non-Repatriable investment.
Transactions in connection with non-repatriable investments/assets are effected through a Non Resident Ordinary (NRO) account. NRO Account is one of the permissible accounts to be held by Non-Residents denominated in Indian Rupees for crediting their legitimate receivables in India. There are times when Non-residents want to remit money outside India from NRO Account – to relatives as gifts, for education/medical purposes, investments etc or simply transfer surplus funds to their own account in the country of residence. In this article, we are covering the essential aspects for NRIs remitting funds abroad from their NRO account.
Following are the documents that need to be submitted with the AD bank:
The above procedure is to be followed for all the remittances made outside India from the NRO account as well as for transfer of funds from NRO account to Non-Resident External (NRE) Account even though the funds are not getting transferred outside India.
India’s remittance procedures require significant documentation and certain knowledge of relevant laws due to which remitting funds outside India may be challenging task for the remitter. It is essential that while making the remittances, the remitter complies with the above procedure and adheres to the regulations of FEMA and Indian income tax laws to avoid penalties in the future.
The information contained in this write up is to provide a general guidance to the intended user. The information is based on our interpretation of various prevailing laws, rules, regulations, pronouncements as on date mentioned below. The information should not be used as a substitute for specific consultations. The information has been provided in simplified manner for general reference of the public which can lead to interpretation not intended under law. Hence, we recommend that professional advice is sought before taking any action on specific issues before entering into any investment or financial obligation based on this Content.
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