In this guide
NRIs frequently need to transfer Indian money abroad—rent, pension, dividends, interest, investment proceeds, inheritance or money received after selling property. The difficulty is that repatriation is not merely an international bank transfer; FEMA rules, tax compliance and source-of-funds documentation determine how the money can move.
The most important distinction is between current income and capital/assets. The well-known USD 1 million limit does not apply to every NRO remittance.
FEMA Residency and Income-Tax Residency Are Different
FEMA and income-tax law use separate residency tests.
Under FEMA, the 182-day concept operates alongside important exclusions based on why a person leaves or comes to India—for example, employment abroad, business abroad or circumstances indicating an intention to stay outside India for an uncertain period.
Income-tax residential status is calculated separately under the applicable tax law.
It is therefore possible for a taxpayer’s FEMA status and income-tax status to differ. This distinction matters because bank accounts and repatriation are primarily FEMA issues, while taxation follows income-tax law.
NRE vs NRO vs FCNR: Which Account Does What?
A useful comparison is:
| Account | Common use | Repatriation |
|---|---|---|
| NRE | Repatriable rupee funds | Freely repatriable |
| NRO | Indian receipts and other permitted rupee transactions | Current income freely remittable; other eligible balances generally within USD 1 million facility |
| FCNR(B) | Foreign-currency term deposits | Repatriable |
RBI guidance confirms that NRE accounts can receive permitted foreign remittances as well as qualifying current Indian income without losing repatriable character. NRO accounts can also receive inward remittances, legitimate Indian dues and transfers from other NRO accounts.
So the common shorthand “NRE is only for foreign income and NRO is only for Indian income” is useful for beginners but legally incomplete.
Does the USD 1 Million Limit Apply to Rent and Pension?
Generally, no.
RBI permits remittance of current income such as:
- Rent;
- Dividend;
- Pension; and
- Interest
outside India from an NRO account, subject to applicable tax compliance.
The separate USD 1 million per financial year facility primarily becomes relevant to eligible NRO balances and remittance of assets/capital amounts such as qualifying sale proceeds or inherited assets.
Therefore, do not automatically count every year’s rent or pension against the USD 1 million capital-remittance facility.
For NRI tax and return assistance:
Property Sale Proceeds: Source of Purchase Matters
Property repatriation is more nuanced than saying that property purchased through NRE funds is “fully repatriable.”
For residential or commercial property acquired using foreign exchange received through banking channels, FCNR funds or NRE funds, RBI permits repatriation subject to prescribed conditions. However, the directly repatriable amount is linked to the foreign-exchange/NRE/FCNR amount originally used to acquire the property. In the case of residential property, this facility is restricted to not more than two residential properties.
If the property appreciated substantially, the entire sale price is therefore not automatically covered by the original foreign-funding route merely because the purchase was originally made through NRE funds. Depending on the facts, the separate USD 1 million remittance-of-assets facility may become relevant for the remaining eligible amount.
What About Property Bought With Rupee or NRO Funds?
Where eligible assets were acquired using rupee funds, or where money represents qualifying NRO balances, NRIs/eligible persons can generally use the USD 1 million per financial year remittance facility subject to prescribed documentation, taxes and authorised-dealer satisfaction.
The USD 1 million amount is an annual FEMA facility—not a blanket exemption from tax.
Can an NRI Repatriate Inherited Agricultural Land Sale Proceeds?
The statement that an NRI can inherit agricultural land but can never repatriate its sale proceeds is too broad.
An NRI/OCI may inherit agricultural land, plantation property or a farmhouse where FEMA conditions are satisfied. Agricultural land can generally be transferred by the NRI/OCI to a person resident in India.
RBI’s remittance-of-assets framework also provides a USD 1 million annual facility for specified inherited assets, subject to documentation and applicable tax requirements.
The inheritance documents and manner in which the previous owner acquired the property should therefore be examined before concluding whether RBI approval or the general remittance facility applies.
Form 15CA and 15CB Changed From 1 April 2026
This is a major 2026 procedural update.
For remittances made on or after 1 April 2026, the Income Tax Act, 2025 framework applies to the remittance procedure:
- Old Form 15CA → Form 145
- Old Form 15CB → Form 146
The Income Tax Department confirms that Forms 145 and 146 apply to remittances made from 1 April 2026, even where the underlying liability may relate to an earlier period.
Importantly, Form 146 is not automatically mandatory for every foreign remittance exceeding ₹5 lakh.
Broadly, Form 145 has different parts depending on whether the payment is chargeable to tax, its amount and whether an Assessing Officer certificate/order or CA certificate is available. Form 146 becomes relevant to the prescribed Part C situation where the taxable remittance exceeds ₹5 lakh and the CA-certification route is used.
DTAA: Lower TDS Is Not Automatic
NRIs may be able to use a Double Taxation Avoidance Agreement where treaty conditions are satisfied.
For Tax Year 2026-27, Form 41 is the new-law counterpart used for prescribed information supporting DTAA claims; it corresponds to the earlier Form 10F framework. A valid foreign Tax Residency Certificate and the applicable treaty conditions remain important.
Whether a bank can apply a treaty rate at source depends on the particular income, treaty, documentation and withholding provisions. Do not assume every NRO receipt is automatically subject to “30% TDS” or that presenting a TRC automatically produces one universal lower rate.
Do Not Keep Using a Resident Savings Account After Becoming NRI
When a resident Indian becomes a person resident outside India under FEMA, the existing resident account should generally be redesignated as an NRO account.
This is separate from opening an NRE account. A resident account does not automatically become NRE merely because the holder moves abroad.
Practical NRI Repatriation Checklist
Before sending money abroad:
- Establish your FEMA residential status.
- Identify whether the money is current income or capital.
- Confirm whether it has repatriable character.
- Check whether the USD 1 million facility applies.
- Calculate and settle applicable Indian tax.
- Preserve rent agreements, sale deeds, inheritance papers and investment records.
- Use Form 145/146 where required for post-1 April 2026 remittances.
- Keep DTAA/TRC/Form 41 documentation where treaty relief is claimed.
- Submit the authorised dealer bank’s required remittance and source-of-funds documents.
For cross-border compliance:
Frequently Asked Questions
Is every NRO transfer subject to the USD 1 million limit?
No. Current income such as rent, dividend, pension and interest can generally be remitted separately after applicable tax compliance.
Is an NRE account fully repatriable?
NRE funds are generally repatriable, subject to the permitted-credit rules governing the account.
Is Form 146 compulsory whenever I send more than ₹5 lakh abroad?
No. The ₹5 lakh threshold is only part of the Form 145/146 framework. Whether Form 146 is required also depends on whether the remittance is chargeable to tax and which part of Form 145 applies.
Can an NRI buy agricultural land in India?
An NRI/OCI generally cannot purchase agricultural land, plantation property or a farmhouse under the normal FEMA permission, although such property may be inherited subject to the rules.
Can inherited agricultural-property proceeds ever be repatriated?
Potentially yes. Eligible inherited assets can fall within the USD 1 million remittance-of-assets framework, subject to the precise FEMA conditions and documentation.
