The guidelines for transfer of
assets outside India by a person whether resident in India or not are given
in the Notifications No. FEMA 13/2000-RB and FEMA 21/2000-RB both dated May
3, 2000 and the amendments issued thereto from time to time.
According to the above Notifications,
remittance of capital assets in India held by a person whether resident in or
outside India would require approval of the Reserve Bank except to the extent
provided in the Act or Rules or Regulations made under the Act.
1. Remittance of assets by
a foreign national of non-Indian origin
1.1. A foreign national of non-Indian
origin who has retired from an employment in India or who has inherited assets
from a person resident in India or who is a widow of an Indian citizen resident
in India may remit an amount not exceeding USD one million, per calendar year,
on production of documentary evidence in support of acquisition/ inheritance
of assets, an undertaking by the remitter and certificate by a Chartered Accountant
in the formats prescribed by the Central Board of Direct Taxes vide their Circular
No.10/2002 dated October 9, 2002.
1.2. These remittance facilities
are not available to a citizen of Nepal and Bhutan.
1.3. The remittance facility in
respect of sale proceeds of immovable property is not available to a citizen
of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
2. Remittance of assets by NRI/PIO
2.1 A Non-Resident Indian (NRI)
or a Person of Indian Origin (PIO) may remit an amount upto USD one million,
per calendar year, out of the balances held in his Non-Resident (Ordinary) Rupee
(NRO) account/sale proceeds of assets (inclusive of assets acquired by way of
inheritance or settlement), for all bonafide
purposes, to the satisfaction of
the authorized dealer, on production of an undertaking by the remitter and certificate
by a Chartered Accountant in the formats prescribed by the Central Board of
Direct Taxes vide their Circular No.10/2002 dated October 9, 2002.
2.2 NRI/PIO may remit sale proceeds
of immovable property purchased by him out of Rupee funds or as a person resident
in India as indicated in para 2.1 above, provided such a property was held by
him for a period not less than ten years. If such a property is sold after being
held for less than ten years, remittance can be made, if the sale proceeds were
held for the balance period in NRO account (Savings/Term Deposit) or in any
other eligible investment, provided such investment is traced to the sale proceeds
of the immovable property to the satisfaction of the authorized dealer.
2.3 In respect of remittance
of sale proceeds of assets acquired by way of inheritance or legacy or settlement
for which there is no lock-in period, NRI/PIO may submit documentary evidence
in support of inheritance or legacy of assets, an undertaking by the remitter
and certificate by a Chartered Accountant in the formats prescribed by the Central
Board of Direct Taxes vide their Circular No.10/2002 dated October 9, 2002.
2.4 It is clarified that settlement
is also a mode of inheritance from the parent, the only difference being that
the property under the settlement passes to the beneficiary on the death of
the owner/parent without any legal procedures/hassles and helps in avoiding
delay and inconvenience in applying for probate, etc
2.5 The remittance facility
in respect of sale proceeds of immovable property is not available to a citizen
of Pakistan, Bangladesh, Sri Lanka, China, Afghanistan, Iran, Nepal and Bhutan.
3. Repatriation of sale proceeds of residential
property purchased by NRIs/PIO out of foreign exchange
3.1 There is no lock-in period
for sale of residential property purchased by NRI/PIO
out of foreign exchange. However, repatriation of sale proceeds of residential
property purchased by NRI/PIO out of foreign exchange is restricted to not more
than two such properties.
3.2 Authorized dealers may permit
repatriation of amounts representing the refund of application/earnest money/purchase
consideration made by the house building
agencies/seller on account of non-allotment of flat/plot/cancellation of bookings/deals
for purchase of residential/ commercial property, together with interest, if
any (net of income tax payable thereon), provided the original payment was made
out of NRE/FCNR account of the account holder, or remittance from outside India
through normal banking channels and the authorized dealer is satisfied about
the genuineness of the transaction. Such funds may also be credited to the NRE/FCNR
account of the NRIs/PIO, if they so desire.
3.3 Authorized dealers may allow
repatriation of sale proceeds of residential accommodation purchased by NRIs/PIO
out of funds raised by them by way of loans from the authorized dealers/housing
finance institutions to the extent of such loan/s repaid by them out of foreign
inward remittances received through normal banking channel or by debit to their
NRE/FCNR accounts.
4. Remittance of current income
4.1 Remittance of current income
like rent, dividend, pension, interest etc. of NRIs/PIO who do not maintain
NRO Account is freely allowed, on the basis of appropriate certification
by a Chartered Accountant certifying that the amount proposed to be remitted
is eligible for remittance and that applicable taxes have been paid/provided
for.
4.2 NRIs/PIO have the option
to credit the current income to their Non-Resident (External) Rupee account,
provided the authorized dealer is satisfied that the credit represents current
income of the non-resident account holder and income tax thereon has been deducted/provided
for.
5. Facilities for students
5.1. Students going abroad
for studies are treated as Non-Resident Indians (NRIs) and are eligible
for all the facilities available to NRIs under FEMA.
5.2. As Non-Residents, they
will be eligible to receive remittances from India (i) upto USD 100,000
from close relatives in India on self declaration towards maintenance, which
could include remittances towards their studies also and (ii) upto USD 1
million out of sale proceeds of assets/balances in their account maintained
with an AD in India. Restriction in respect of remittance of sale proceeds
of immovable property as indicated in para 2.2 above shall apply.
5.3 All other facilities available
to NRIs under FEMA are equally applicable to the students.
5.4 Educational and other loans
availed of by them as residents in India will continue to be available as per
FEMA regulations.