Fund transfer to NRI

J. Biswas (1 Points)

15 February 2024

A private limited company wants to transfer INR 10000 to an NRI.

What are the implications from FEMA point of view.

1. If the bank account is a domestic one

2. If the bank account is NRO/NRE one.

Thanks

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2 Replies

sabyasachi mukherjee (26132 Points)
Replied 16 February 2024

Funds to be transferred to an nri.

Yasaswi Gomes new (Finance ) (4486 Points)
Replied 23 February 2024

As per FEMA regulations, let’s discuss the implications of transferring INR 10,000 from a private limited company to an NRI in different scenarios:

If the bank account is a domestic one:
- If the NRI has a regular domestic bank account (not an NRO/NRE account), the following implications apply:
  - The transfer is subject to the Liberalized Remittance Scheme (LRS) limit.
  - The company must ensure compliance with the LRS limit (currently USD 250,000 per financial year).
  - The NRI can receive the funds in their regular savings account.
If the bank account is NRO/NRE one:
- If the NRI has an NRO/NRE account, the implications are as follows:
  - The transfer is allowed without any specific limit.
  - The funds can be credited to the NRO (Non-Resident Ordinary) or NRE (Non-Resident External) account.
  - The NRI can freely repatriate the funds from the NRE account.