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Transfer from savings bank to nro/nre

Shri (M.Com) (129 Points)

14 January 2017

Hello,

My brother who is an NRI had loaned me 20 lakhs for the construction of my house 4 years ago. Now, I need to return back the money. Is it possible for me to transfer it to his NRO/NRE account.

What is the procedure for the same. Are the rules different from NRO and NRE account.

Can i transfer from my SB A/c or give a cheque/draft?

Thanks.

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12 Replies

Shubham Gupta (Student) (76 Points)
Replied 14 January 2017

Yes,
you transfer amount his NRO/NRE account.
there are also different rules for NRO/NRE account.

Suresh Pai S (Tax Consultant) (1029 Points)
Replied 15 January 2017

We don't see any potential hindrance on transfer. However there is a limit of transfer of 10 lakhs. You need to do it in two transfers. That will do.

Vip (SM) (24 Points)
Replied 15 January 2017

You could transfer INR into NRO

INR transfer into NRE is not allowed

david (Student CFA) (40 Points)
Replied 19 January 2017

When you say inr transfer to née is not allowed should I buy foreign exchange to transfer.

also, what is the threshold for transfer? Can you point me where it has been mentioned 10 lakhs at a time.

Abhinav (CA) (397 Points)
Replied 25 January 2017

As per FEM (Borrowing and Lending in Indian Rupees) Regulations, you can repay the funds to your brother ONLY in his NRO account (not in his NRE account). Further, your NRI brother cannot repatriate these funds out of India.

Shri (M.Com) (129 Points)
Replied 25 January 2017

Thanks for your response. Can i do a gift to my brother. If so, How much i can do it? In that way, can he repartriate it back..

Averin Biotech (Owner) (24 Points)
Replied 25 January 2017

Yes Me too have same issue checking with people as how to transfer the money.
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Abhinav (CA) (397 Points)
Replied 26 January 2017

That will be a circumvention of the FEMA guidelines and can lead you to a problem not only under FEMA but also the ITA. I will not advise it.

What is the issue crediting it in NRO account of your brother?

Averin Biotech (Owner) (24 Points)
Replied 26 January 2017

Thanks Need check these with doing multiple transfers
www.averinbiotech.com
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Abhinav (CA) (397 Points)
Replied 27 January 2017

Averin Biotech - Why are you posting links? Is this something like a backlinking strategy for SEO?

Shri (M.Com) (129 Points)
Replied 29 January 2017

Thanks for the response. There is no problem in crediting to NRO account. However, I am worried that it can't be repartriable.

I read somewhere that you can send it through LRS... therefore, i wanted to know the pros and cons... I thought that i can directly credit it to NRE. which i think is not the case.

Abhinav (CA) (397 Points)
Replied 30 January 2017

Yes, the money will not be repatriable. You can also not use the LRS scheme for repayment as that would be in conflict with the Borrowing and Lending regulations.

Yes, your brother could have otherwise done an NRO to NRE transfer - but in my view, CA should NOT issue a certificate because FEMA says that money is non repatriable - so, even if it is proper tax paid money and all, it should not be allowed to be repatriated out of India.

Your brother can use the funds from NRO account to make investments in India. He can see if a lower TDS rate can be applied via DTAA.

This is my opinion, you can also check with other CAs - if a CA is ready to give your brother Form 15CB, then no problem.