Quick answer: Repatriation means you can take money out of India (send it to your overseas account). Non-repatriation means the money generally stays in India; exits are limited and usually routed via an NRO account. NRE/FCNR funds are fully repatriable; NRO balances are partly repatriable (with rules), and some investments are deliberately “non-repatriable.” (Reserve Bank of India, Income Tax India)
Last updated: August 15, 2025
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What do these terms mean?
- Repatriation (freely repatriable): Money (and eligible investment proceeds) can be transferred overseas without an annual cap, after taxes if applicable. Typical sources: NRE and FCNR(B) accounts; investments made on a repatriation basis. (Reserve Bank of India)
- Non-repatriation: Sale/redemption proceeds must be credited to NRO and are not freely repatriable. Transfers abroad are allowed only under specific facilities (see below). Typical sources: NRO balances and investments made on a non-repatriation basis (Schedule IV under FEMA NDI Rules, 2019). (MEA India, Income Tax India)
Where does this show up for NRIs?
1) Bank accounts
- NRE account: Principal + interest are fully repatriable. Interest is exempt from Indian tax under Section 10(4)(ii). Use for foreign-income parking and overseas transfers. (Reserve Bank of India, Income Tax India)
- FCNR(B) deposit: Fully repatriable foreign-currency term deposits; interest is tax-free in India for NRIs. (SBI, Income Tax India)
- NRO account: Designed for Indian-source income (rent, dividends, pension). Current income is remittable without limit after tax; other NRO balances/sale proceeds can be remitted up to USD 1 million per financial year with prescribed documentation (Form 15CA/15CB). (Reserve Bank of India)
2) Investments under FEMA
- On a repatriation basis: NRIs/OCIs can buy eligible instruments; sale/redemption proceeds (net of tax) are repatriable. (Income Tax India)
- On a non-repatriation basis (Schedule IV): You can invest, but exit money must be credited to NRO and is subject to NRO remittance rules (i.e., current-income remittance + USD 1 million facility). (MEA India)
Snapshot: Repatriation vs Non-Repatriation
| Feature | Repatriation (NRE/FCNR; Repatriable investments) | Non-Repatriation (NRO; Schedule IV) |
|---|---|---|
| Exit to overseas account | Yes, freely (no annual cap) | Restricted; credit to NRO first, then use permitted remittances |
| Annual limit | None (subject to tax where applicable) | USD 1 million per FY for non-current balances/sale proceeds; current income has no monetary cap (after tax) |
| Tax on interest | NRE/FCNR interest exempt u/s 10(4)(ii) | NRO interest taxable (TDS applies) |
| Typical funding | Foreign income/inward remittance | Indian income, gifts, sale proceeds |
| Key forms | Bank forms; 15CA/15CB if required | Bank forms + 15CA/15CB (CA certificate) |
| Common use-cases | Parking foreign earnings; repatriable MF/stocks | Rental income; non-repatriable MF/stocks/private investments |
(Reserve Bank of India, Income Tax India)
Formula (quick math):
Net Repatriable Amount = Sale/Redemption Proceeds − (Tax + Surcharge + Cess + Bank/FX charges)
Special rule: Real estate sale proceeds
- If a residential property was purchased with foreign exchange/NRE/FCNR funds, you can repatriate up to the original foreign-exchange amount, for not more than two residential properties. Any excess fits under the USD 1 million NRO facility (net of taxes). (Reserve Bank of India)
How the remittance actually works (step by step)
- Identify the route
- NRE/FCNR or repatriable investment → direct remittance abroad.
- NRO or Schedule IV investment → credit to NRO, then remit as current income (no cap) or under USD 1 million facility. (Reserve Bank of India)
- Compute net amount (see formula above) and ensure taxes are paid/withheld.
- Documentation
- Form 15CB (CA certificate) confirming tax compliance and Form 15CA (remitter’s declaration) as applicable; banks rely on these to process outward remittances. (Reserve Bank of India)
- Purpose code & bank processing
- Your AD-bank tags the remittance (e.g., dividend, redemption, sale proceeds) and sends funds via SWIFT.
Practical India-centric scenarios
A) Mutual fund redemption
- Funded from NRE (repatriation basis): Redemption proceeds (net of MF taxation) are repatriable. (Income Tax India)
- Funded from NRO (non-repatriation basis): Money comes to NRO; you can remit current income freely after tax and other balances up to USD 1 million per FY. (Reserve Bank of India)
B) Equity shares bought on a non-repatriation basis
- On sale, proceeds must credit NRO; overseas transfer follows NRO rules (current income vs USD 1 million). (MEA India)
C) Selling an apartment in Mumbai
- If bought with NRE/FCNR/foreign funds, repatriate up to the original forex amount (max two residential properties). Extra amounts use the USD 1 million facility via NRO after tax. (Reserve Bank of India)
Decision checklist: Which route should you choose?
- Will you need the capital back abroad soon? Choose repatriation basis (use NRE/FCNR). (Reserve Bank of India)
- Is your inflow Indian income (rent/dividends/pension)? Receive in NRO; repatriate current income after tax, and other balances within USD 1 million. (Reserve Bank of India)
- Are you okay with India-locked capital (estate planning, INR use)? Non-repatriation may be fine (often used for family expenses/investments). (Income Tax India)
FAQs
1) Is “current income” from NRO really without limit?
Yes. Rent, dividends, pension, interest etc., are repatriable without a monetary cap (after tax). Banks may still ask for 15CA/15CB for compliance. (Reserve Bank of India)
2) What’s the USD 1 million limit on NRO?
It covers non-current balances/sale proceeds (e.g., maturity of deposits, asset sale proceeds) per financial year, subject to documentation and tax compliance. (Reserve Bank of India)
3) Can I exceed USD 1 million?
Beyond USD 1 million, prior RBI approval is required in specified cases; otherwise, you wait for the next FY or structure under applicable rules. (Reserve Bank of India)
4) Are NRE/FCNR interest earnings taxable in India?
No, they’re exempt for NRIs under Section 10(4)(ii) of the Income-tax Act. (Taxation in your country of residence may still apply.) (Income Tax India)
5) For stock/MF investments, how do I choose the basis?
If you want a clean exit abroad, invest on a repatriation basis (fund from NRE/FCNR/inward remittance). If you’re fine with India-locked capital and periodic remittances, non-repatriation works (fund from NRO). (Income Tax India)
Key takeaways for Indian NRIs & HNIs
- NRE/FCNR = fully repatriable; best when overseas exit flexibility matters. (Reserve Bank of India)
- NRO = partial repatriation; current income is free after tax; other balances capped at USD 1 million/FY with 15CA/15CB. (Reserve Bank of India)
- Investments on non-repatriation basis deliberately lock the principal to India; proceeds go to NRO. (MEA India)
- Property sales have special caps (up to original forex amount; two residential properties). (Reserve Bank of India)
Compliance note: FEMA, RBI Master Directions/Circulars and tax provisions change. Before moving large sums, confirm with your AD-bank and a Chartered Accountant using the latest rules and forms (15CA/15CB). (Reserve Bank of India)