As a Non-Resident Indian (NRI), financial transactions between your country of residence and India are an essential part of managing wealth, supporting family, or maintaining investments. Whether you’re sending money to India or bringing funds back abroad (repatriation), understanding the legal, tax, and procedural differences is critical.
This guide explores both directions—sending money to India and repatriating funds abroad—so you can make informed, compliant, and cost-effective decisions.
Understanding the Basics
Sending money to India typically involves transferring funds from your foreign bank account to a beneficiary in India, which could be family, an investment account, or your own NRO/NRE accounts.
Repatriating funds abroad means transferring money from your Indian bank account (usually NRO or NRE) to your foreign account in countries like the USA, UK, Canada, or the UAE.
Key Regulatory Framework
Sending money to India is generally straightforward for NRIs. Transactions are governed by FEMA (Foreign Exchange Management Act). Funds can be sent to:
- NRE accounts (freely repatriable)
- NRO accounts (repatriation allowed with limits and documentation)
- An Indian resident’s bank account
Repatriating funds abroad is regulated by the Reserve Bank of India under the Liberalised Remittance Scheme (LRS) and FEMA. You can freely repatriate:
- Funds from NRE and FCNR accounts, including principal and interest
- Up to USD 1 million per financial year from NRO accounts, with proper documentation
Tax Implications
When sending money to India, there is usually no tax imposed in India on either the sender or the receiver, provided it’s a genuine gift or family support. However, in countries like the USA, transfers above a certain threshold must be reported for gift tax purposes. In India, if the receiver is not a close relative, gifts above ₹50,000 may be taxable.
Repatriation from NRO accounts may attract tax. Interest earned is subject to tax in India, with a TDS of 30% unless a tax treaty applies. NRE and FCNR interest is tax-free in India for NRIs. Form 15CA and 15CB are often required to verify tax compliance before funds can be repatriated.
Required Documentation
For sending money to India, you will need:
- Valid ID (such as a passport)
- Beneficiary account details (name, account number, IFSC code)
- Reason for transfer
For repatriating funds abroad, you may need:
- PAN card
- Form 15CA (filed online)
- Form 15CB (issued by a Chartered Accountant)
- Proof of source of funds (such as sale deed or investment records)
- Recent bank statements
- Tax returns, if applicable
Common Use Cases
Sending money to India is often used for family support, investments, real estate purchases, education, or medical expenses. Repatriation is used when NRIs sell property in India, receive rental income, or wish to transfer unused balances abroad.
Best Practices for Both Directions
Compare exchange rates and transfer fees before choosing a service. Maintain proper records for every transaction. Follow all compliance rules to avoid penalties. Stick to bank transfers or digital platforms and avoid cash-based transfers. Ensure all necessary forms are filled accurately, especially during repatriation.
Conclusion
Sending money to India is usually quick and easy, while repatriating funds abroad involves additional documentation and tax clearance. Both directions are important for NRIs and require a clear understanding of the process, regulations, and tax implications. With proper planning and trusted transfer services, you can move funds securely, legally, and cost-effectively.