How to transfer money abroad from NRO a/c and the sale of property in India

(Look here for repatriation of money abroad from the Sale of property purchased from funds remitted from overseas OR NRE/ FCNR accounts, Sale of property purchased from Rupee Source (while resident in India), Sale of property acquired through inheritance, etc, and permissible sources of funds for an online/offline transfer abroad from an NRO Account .)

An NRI (Non-resident Indian) can open, hold, and maintain (i) an NRE account, (ii) an FCNR (B) account, and (iii) an NRO account with an authorized dealer in India i.e. a bank authorized to deal in foreign exchange. The amount maintained in NRE and FCNR(B) accounts by an NRI is freely repatriable without limit. However, the amount held in the NRO account can be repatriated only up to USD 1 million (or equivalent in other currencies) in a financial year subject to satisfying certain documentation requirements. The balance in the NRO account up to USD 1 million can be transferred to your NRE account or overseas bank account. Repatriation of funds above USD 1 million requires RBI permission.

 For all remittances abroad from the NRO account, the source of funds and the amount from each source to be remitted require self-attested documentary proof. Your bank might have fixed a maximum limit for one transaction. This is for security reasons. For example, ICICI Bank has a fixed USD 25,000 (twenty-five thousand) equivalent per transaction. All remittances are subject to payment of tax applicable in India and Authorised Dealers are to convince themselves of this aspect before releasing the payment.

Before the Budget 2023, for foreign equity investments under the Liberalised Remittance Scheme, the TCS was levied at the rate of 5% for remittances exceeding Rs 7 Lakh. The remitting entity deducts this income tax before transferring the funds overseas. Starting October 1, 2023, any personal remittances above 7 lakh rupees annually will incur a 20% TCS rate on the amount exceeding this threshold. Here, it is crucial to note that sending money doesn’t only mean sending it to someone. It could even imply touring abroad, shopping, investing abroad, purchasing assets, etc. However, medical treatment or education transfers remain exempt from TCS.  However, TCS collected by the bank can be claimed back as an income tax refund while filing IT returns. Alternatively, you can avail of credit while filing the ITR/calculating your advance taxes.

Permissible sources of funds for an online/offline transfer abroad from an NRO Account are as follows:

1. Dividend Income
2. Gift from a Close Relative
3. Income Tax Refund
4. Insurance Policy Claims or Maturity Proceeds
5. Interest (Earned on Eligible Lending)
6. Interest (Earned on NRO Account)
7. Interest on Other Securities
8. Maturity of Debentures/ Bonds
9. Post Office Savings
10. Public Provident Fund (PPF) Balances
11.  Rental Income
12.  Salary/ Gratuity/ Provident Fund (PF)/ Final Settlement by Employer
13.  Unutilised Foreign Funds including funds transferred from NRE SB/ FD
14.  Sale of property purchased from funds remitted from overseas OR NRE/ FCNR accounts
15.  Sale of property purchased from Rupee Source (while resident in India)
16.  Sale of property acquired through inheritance
17.  Funds from Cancellation or Refund of application for Purchase of Property
18.  Sale of shares OR mutual funds
19.  Repayment of loan from close relative
20.  Repayment of loan from other than a close relative (individual)
21.  Repayment of loan from entity incorporated or otherwise in India
22.   Authorised Dealers can allow remittance/s up to USD 1 million, of balances in NRO accounts/of sale proceeds of assets on the production of an undertaking by the remitter together with a certificate issued by a Chartered Accountant as prescribed by the Central Board of Direct Taxes (CBDT). In the case of repatriation of sale proceeds of immovable property by NRIs/PIOs, Authorised Dealers (ADs) can allow repatriation thereof even if the immovable property was held by the NRIs/PIOs for less than 10 years provided the cumulative period of holding of the immovable property in India and retention of the sale proceeds of the property in the NRO Account is not less than 10 years.

Note: Cash deposits are not eligible for NRO repatriation.

 Banks will verify the source of funds from the following:

• Bank account statement showing credit of selected source of funds
•  Supporting documents – as per the selected source of funds
• Form A2 cum FEMA declaration [As per RBI guidelines, “Where the remittance is to be made from the balances held in the NRO account, the Authorised Dealer should obtain an undertaking from the account holder stating that the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”]
•  Form 15CA and Form 15CB, as applicable (No forms 15CA & 15CB will be required to be furnished by an individual for remittance which does not require RBI approval under Liberalised Remittance Scheme. Form No. 15CB will only be required for payments made to non-residents, which are taxable, and if the payment exceeds Rs. 5 lakhs. The formats of 15 CA & 15CB and submission details are available on the website of the Income Tax Department).

You may keep self-attested scanned copies of the above documents ready to be uploaded if you are submitting the documents online:

In the following case, prior permission of RBI is required for the release of funds for repatriation.

• a)  on account of legacy, bequest, or inheritance to a citizen of a foreign state, resident outside India; and b) by NRIs/ PIOs out of the balances held in NRO accounts/ sale proceeds of assets/ the assets acquired by way of inheritance/ legacy.
• Hardship will be caused to a person if remittance from India is not made to such a person.

Procedure for transfer of funds abroad from your bank:

Firstly, you’ll need a PAN card, even if you’re a Person of Indian Origin (PIO) or were born and brought up in another country. If you’re a foreign citizen, you don’t need to link your Aadhaar card with your PAN card. Additionally, you’ll require a visa or an OCI (Overseas Citizen of India) card and a passport.

When you approach your bank for repatriation of balance in the NRO account, you need to give the details such as your account no., Beneficiary’s Name, Beneficiary’s Address, Beneficiary’s Account Number, Beneficiary’s Bank Name, Beneficiary’s Bank Branch Name, Beneficiary’s Bank Branch SWIFT (or ISO 20022 code), Beneficiary Bank’s Correspondent Bank’s Name, Beneficiary Bank’s Correspondent Bank’s SWIFT (or ISO 20022 code), and Purpose of Remittance.

Documents required by your bank for evidencing the following sources of funds:

Source of funds	Supporting documentation
Dividend Income	Dividend Warrant / Intimation OR Form 16A (TDS Certificate)
Gift from a Close Relative	Gift Deed OR Declaration signed by both parties stating the details of the gift
Income Tax Refund	Income Tax Refund letter OR Supporting documents e.g. Cheque copy
Copies of the PPF Passbook	Insurance Policy Claims or Maturity Proceeds
Interest (earned on Eligible Lending)	Foreign inward remittance statement (for a loan received through inward remittance) or Bank statement or passbook evidencing debit to NRE/ FCNR account or Form 16A (TDS Certificate) AND Loan agreement OR written consent from the borrower and lender specifying the amount, date, period, and terms of the loan
Interest earned on NRO account	TDS certificate (16A) for tax deducted on interest credited to NRO account
Interest on Other Securities	TDS certificate (16A) for tax deducted or interest warrant
Repayment of loan from a close relative	Loan agreement/ written consent from borrower and lender specifying the amount, date, period, and terms of the loan.[ Minimum maturity period of the loan is one year (Loan should be free of interest,  the amount of loan is received by the borrower through inward remittance in free foreign exchange through normal banking channels or debit to the NRE/ FCNR account of the non-resident lender. Copy of bank statement or passbook evidencing debit to NRE / FCNR account of the non-resident lender.
Repayment of loan from other than a close relative (individual)	Copy of the certificate or  Demat statement OR Letter from the issuing company
Maturity of Debentures/Bonds	Copies of the PPF Passbook
Post Office Savings	Post Office Savings Account passbook
Public Provident Fund (PPF) Balances	Copies of PPF Passbook
Rental Income	Rent agreement or rent receipts or Form 16A (TDS Certificate)
Salary/ Gratuity/ Provident Fund (PF)/ Final Settlement by Employer	Salary slip OR gratuity/ PF/ final settlement letter by Employer
Sale of property purchased from funds remitted from overseas OR NRE / FCNR Accounts	Copy of the registered sale deed for the sale of property  Copy of the registered purchase deed for the acquisition of property  Bank statement showing the debits for payment for the property (for payments from NRE / FCNR accounts or the loan repaid by debits to such accounts) If the property was acquired out of loan funds, loan statement or release letter from the lender Foreign Inward Remittance Statement (FIRS) – required if the property acquired out of funds remitted from overseas or loan repaid out of funds from overseas (not required in case remittances processed through ICICI Bank). Property acquisition declaration in the prescribed format.
Sale of property purchased from Rupee Source (while resident in India)	Copy of the registered sale deed for the sale of property  Copy of the registered purchase deed for the acquisition of property  Property acquisition declaration in the prescribed format.

If all the transactions related to the NRO account are done through an account of the same bank it can be internally verified and therefore bank statement/passbook is not required. In case of assets acquired by inheritance or legacy, in addition to the respective document mentioned above (which would be in the name of the deceased legator, also obtain any one of the following:

• Copy of the Will
• Death certificate of the asset owner.
• Succession Certificate
• Legal Heirship Certificate

Originally posted on July 12, 2021, edited and reposted on 22.07.2024

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