Tax & Repatriation
How does repatriation work for NRIs?
April 12, 2023, 3 min read
How does repatriation work for NRIs?
Investing in India can be a great way for Non-Resident Indians (NRIs) to build wealth and achieve their financial goals. However, one of the most important considerations for NRIs who invest in India is how they can repatriate their investments when the time comes.
Repatriation of funds is the process of transferring money from one country to another. Here’s what NRIs need to know about repatriation of funds from India:
Eligible Investments
Only certain types of investments are eligible for repatriation. These include investments made through Non-Resident External (NRE) accounts, Foreign Currency Non-Resident (FCNR) accounts.
NRE and FCNR accounts have no repatriation limits where as Non-Resident Ordinary (NRO) accounts allow repatriation upto $1Mn per financial year, but only for current income.
Documentation Required for Repatriation
The documentation required for repatriation varies based on the investment instrument you choose. For example, if you invest in mutual funds, you need to provide a copy of your Permanent Account Number (PAN) card, a declaration form, a passport copy, and an Overseas Address Proof.
If you need to move your money from NRO to NRE account, you also need additional documents for the same:
- A signed cheque for the transfer of funds from NRO to NRE account
- FEMA declaration
- Documentary evidence of source of funds
- Form 15CA
- Form 15CB - It is a form certified by the CA. It contains details regarding the payment like the TDS rate, deductions and the applicability of DTAA.
The last two forms are to ensure that you are transferring the funds after you have paid the relevant taxes on them.
Tax Implications on Repatriation
When you repatriate your funds, you need to pay taxes on the gains you’ve earned in India. For example, if you’ve invested in stocks and made a profit, you need to pay tax on the gains at the applicable rate.