Fund transfer to NRI

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:

1. 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.

2. 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.