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.
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 :
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.
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