Sending Money Abroad from India: A Practical Guide for NRIs and PIOs

 

When it comes to sending money out of India, most Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs) find themselves tangled in a web of rules, paperwork, and fine print. Thankfully, the Reserve Bank of India (RBI), through FEMA (Foreign Exchange Management Act), has laid down a clear framework to help you navigate the remittance process-whether you’re selling a property, transferring rental income, or repatriating inherited assets.

Let’s simplify it.

What Is ‘Remittance of Assets’?

In plain terms, it refers to transferring money from India to abroad, particularly when it’s related to:

• Sale of property
• Inherited wealth
• Shares and securities
• Insurance maturity proceeds
• PF or superannuation funds
• Or even just funds in your NRO (Non-Resident Ordinary) account

Under FEMA rules, NRIs/PIOs can remit up to USD 1 million per financial year from their NRO account. This cap resets every 1st April and applies per individual. The remittance can be made in installments but must go through the same Authorised Dealer (AD) bank and be backed by documentary evidence.

Selling Property in India? Know This First

NRIs/PIOs often sell property in India and wish to take the proceeds abroad. Here’s how it works:

1.  If the property was purchased with foreign funds(via NRE/FCNR(B) account or remitted from abroad), you may repatriate the proceeds without limit, but only for up to two residential properties in your lifetime.

2.  If the property was inheritedor purchased while you were a resident of India, then you can repatriate proceeds within the USD 1 million annual cap. Anything above that needs prior RBI approval.

3.  Sale of agricultural land, plantation property, or farmhouse? Sorry, remittance is not permittedin most cases.

Income Like Rent or Dividends? Freely Repatriable

Good news! Income like rent, pension, interest, and dividends is freely repatriable without any limit. These are treated as current account transactions, not remittances of assets. Just ensure:

• Taxes have been paid or provided for
• Certification by a Chartered Accountant is in place (Form 15CA/15CB)

Tax Compliance is Non-Negotiable

Even if RBI and FEMA are on your side, the Income Tax Department will want its due. Remittances must comply with Section 195 of the Income-tax Act. Here’s the must-do list:

• Form 15CA: A declaration of remittance details
• Form 15CB: A Chartered Accountant’s certificate on taxability of funds

Depending on the nature and amount of remittance, different parts of Form 15CA (A to D) apply. Failing to file accurately could attract a penalty of ₹1 lakh under Section 271-I.

Beware of Practical Hiccups

Even if you tick all legal boxes, real-world execution can be messy:

• Form Confusion: Many NRIs are unsure which Form 15CA/CB applies to them. Get CA help.
• Joint Property: Banks often demand No-Objection Certificates (NOCs) from co-holders.
• Power of Attorney Limits: Your resident POA can’t remit sale proceeds-only current income.
• Online Filing Glitches: Errors on the income tax portal can delay processing.
• Document Collection: Sale deeds, PAN, TRC, Form 10F-missing even one can stall your transfer.

When Do You Need RBI’s Nod?

Automatic remittance works most of the time, but RBI approval becomes mandatory in the following scenarios:

• You wish to remit more than USD 1 millionin a financial year
• The remittance causes hardshipif not processed
• The property was acquired under Section 6(5) of FEMA(i.e. while you were a resident or by inheritance)
• The case is ambiguous or beyond the scope of AD banks (e.g. disputed assets, unclear ownership)

Even Students Studying Abroad Qualify as NRIs

A useful nugget: students going abroad for studies are treated as NRIs from the day they leave India. That opens the door to the USD 1 million remittance limit and other NRI benefits-even if their stay is temporary.

Final Word

Sending money out of India as an NRI/PIO is not a maze-but you do need a map. Plan ahead, keep your documents in order, comply with tax laws, and consult a professional when in doubt. With proper guidance, even million-dollar remittances can be smooth, legal, and stress-free.