Tranfer of fund by nri out of receipt of sale property

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Querist : Anonymous

Querist : Anonymous (Querist)

02 May 2015 How to transfer the fund received by a NRI from sale of property and limit prescribed under FEMA?

Whether there are any provision to transfer the beyond the limit and procedure of the same.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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02 May 2015 Legal method to repatriate money from India.
The Reserve Bank of India has delegated powers, to authorized dealers of foreign exchange to process applications and effect repatriation. There are certain guidelines that need to be followed, when it comes to transferring money that is received from the sale of property abroad.In case the property was purchased, with money received from inward remittance or debit to NRE/FCNR/NRO account, then the principal amount can be repatriated outside India. Example: 250,000 US$ are sent from abroad by an NRI to purchase property in India. Suppose the property is sold for a sum that is equivalent to US$350,000.The principal amount of US$ 250,000, can be repatriated immediately. The balance would be deposited in an NRO account.Previously there was a lock in period of three years; this has now been removed by RBI. In case the property was purchased out of Rupee resources, then the money from the sale of property can be credited to the NRO account of the NRI/PIO. NRIs are allowed to repatriate an amount up to USD one million, per financial year, from their NRO account. Such transfers are allowed, subject to tax compliance. The limit of US dollars 1 million includes sale proceeds of up to two immovable properties held by NRIs/PIO.How to repatriate money from sale of property To be able to transfer money, received in India from the sale of your property, it is important that the payment for the property is accepted through legal banking channels. Documentary proof showing source of money will be required when transferring money abroad. In order to transfer the money it must first be deposited in an NRO bank account.Step by step guide - transfer money abroad from India1. To start the repatriation process, the first step is to get a certificate from a Chartered Accountant (CA) in India. Read on to see what CA certificate is and why it is required.CA Certificate InformationThe certificate required from a chartered account, is actually issued in a form that is called 'Form 15CB'. This form can be downloaded by simply logging on to the Indian government tax website, and downloading it. The website page to access the form is: https://www.tin-nsdl.com/download/Form15CB.pdfThe CA will fill in the form and sign it. Basically the form is to verify that the money being sent abroad, has indeed been acquired from legal sources such as, from the sale of your property and all taxes that were due, have been paid. The CA will verify and sign the form for you.2.Once you have the completed CA certificate on 'Form 15CB' the next step involves filling a Form called Form 15CA.

What is Form 15CA? This is a form that is filed online with the tax department. Form 15CA can be accessed from the tax department website at https://onlineservices.tin.nsdl.com/TIN/JSP/tds/enterForm15CA.jsp (The link provided works currently; in case it is changed then you can find the form from the tax website) Indian Tax Department website address is: www.tin-nsdl.comOnce you access the form, fill in the required information. You will need some of the information provided by your CA, on Form 15CB.Fill the form carefully and submit it online by clicking the submit/proceed button. The form is uploaded to the tax authorities, and a system acknowledgement number is automatically generated, and displayed. Take a printout of the filled undertaking form 15CA showing the system generated acknowledgement number and sign it.3.The final step, involves taking the signed undertaking along with the CA certificate on Form 15CB, to the bank where you have your NRO account. Your bank will transfer your money abroad. No further permission is required by banks as RBI has authorized dealers to submit funds once the above mentioned documents are provided.Documents bank will require 1.Form 15CA. 2.Form 15CB in duplicate signed by the Chartered Accountant3.Form A2 - Your bank should supply you with this form, a sample form A2 is included in this book. 4.Application for foreign exchange- this form would also be supplied by the bankTo verify that the person who is sending the money abroad, did have legal ownership of the property sold and the transmission of funds are the sale proceeds of property; banks may want to see documentary proof such as:1.Copy of the sale document of the property.2.If the property had been inherited then copy of the WILL, legal heir certificate, death certificate on whose death the property has been inherited.

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