For ages Non-Resident
Ordinary accounts were balances in banks to be retained and utilized in India
which earned nominal interest which was subject to much forgotten tax
deduction at source at flat rate of 30%.
Those days are gone and now Reserve Bank of India permits repatriation / remittance out of balances held in NRO account to the extent of US$ 1 mn per year.
2. Even if an NRI does
not wish to repatriate funds, it is advisable to remit the funds and re-invest
the same into NRE / Foreign Currency Non Resident (B) (FCNR) or Foreign
Currency Plan ( FCP ) account to take advantage / reap the benefits
of :
.01 Interest on NRE /
FCNR / FCP deposits is tax free, whereas interest on NRO account is liable to
tax in India.
.02 Tax at source @
30% is deducted from NRO interest. As NRE / FCNR / FCP interest is tax
free, TDS is not applicable.
3. The repatriation /
remittance facilities are available for and as under :
(I) Repatriation of
sale proceeds of immovable property:
1. RBI has permitted
remittance upto US$ 1 mn. per year out of sale proceeds of immovable property
2. Repatriation is permissible provided :
.01 the property was
purchased in accordance with Foreign Exchange Regulations Act, 1973.
.02 repatriation is
permissible even in cases where the purchases was made while the NRI was
a resident in India i.e. before migration.
.03 the balance is held
in an NRO account with a bank in India.
(II) Repatriation of
Legacy :
1. RBI has permitted
remittance upto US$ 1 mn. per year out of legacy received in India.
2. Remittance is
permissible , provided :
.01 the NRI is a lawful
beneficiary of legacy in India ,
.02 the legacy is supported
by necessary documents and
.03 the balance is held
in an NRO account with a bank in India.
(III) Remittance
towards educational expenses :
1. RBI has permitted
remittance upto US$ 1 mn per year out of NRO account towards educational
expenses , provided :
.01 Remittance is
to meet expenses in connection with education of children.
.02 the balance is
held in an NRO account with a bank in India.
(IV) Remittance
towards medical expenses :
1. RBI has
permitted remittance upto US$ 1 mn per year out of NRO account towards
medical expenses , provided :
.01 Remittance is
made to meet medical expenses of the account holder or
.02 to meet medical expenses of account holders' family
members and
.03 the balance
is held in an NRO account with a bank in India.
(V) Remittance of
Non-repatriable current income :
1. Reserve Bank of
India has permitted remittance out of / repatriation of entire current income
arising out of non-repatriable investments.
.01 All kinds of hitherto non-repatriable
income such as, interest from NRO account, interest from firms / company
deposits, rent, dividend, interest on debentures, pension, etc. other than
capital gains are fully repatriable since 1996-97, subject to payment of tax
in India.
.02 For the year
1994-95 amount upto US$ 1000 and one-third of balance income and
.03 For the year
1995-96 an amount of US$ 1000 and two-third of the balance income are also repatriable.
2. An NRI can seek
repatriation for the current year income as also income accumulated for earlier years.
3. We at
nribanks.com
provide a complete package, which includes advisory services,
documentation and necessary certification for repatriation / remittance
out of NRO balances.
If you wish to avail
our services, please contact us at :
keynote@nribanks.com or keynote@femaonline.com or call Keynote Corporate Counseling Pvt. Ltd.
(91 - 281 ) 2464099 /
2463367
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