FEMA India Rules for NRI
Three questions cover most of it: what can be invested in India, what can be held, and what can be sent back out.
For an NRI, FEMA governs what can be invested in India, what can be held, and what can be repatriated. Investment in Indian companies is permitted on either a repatriation or a non-repatriation basis under the Non-Debt Instruments Rules, immovable property other than agricultural land, plantation property and farmhouses may be acquired, and balances in an NRO account can generally be remitted abroad within the limit of USD 1 million per financial year, supported by Forms 15CA and 15CB.
What our NRI advisory covers
Investment, property, accounts and remittance, treated together.
- Determining residential status under FEMA and under the Income-tax Act
- NRE, NRO and FCNR account structuring and permitted credits
- Investment in shares, mutual funds and unlisted companies
- Acquisition, holding and sale of immovable property in India
- Repatriation within the USD 1 million limit, with Forms 15CA and 15CB
- Inheritance, gifts and transfer of assets between residents and non-residents
The four areas NRIs ask about
Where the rules actually bite.
Bank accounts
NRE for freely repatriable foreign-sourced funds, NRO for India-sourced income, and FCNR for foreign currency deposits.
Investments
Repatriable investment under the general FDI framework, or non-repatriable investment which is treated on par with domestic investment.
Immovable property
Residential and commercial property may be acquired; agricultural land, plantation property and farmhouses may not.
Repatriation
Remittance of current income and eligible sale proceeds from an NRO account, within the annual limit and with tax certification.
Our process
How we work through an NRI's position.
Status determination
Establishing residential status under FEMA, which is not the same test as under the Income-tax Act.
Asset mapping
Listing what is held in India, how it was acquired and which account it sits in.
Structuring
Deciding repatriable or non-repatriable routes for new investment, and correcting anything misclassified.
Remittance execution
Preparing Forms 15CA and 15CB and coordinating with the bank for the transfer.
Where NRIs commonly go wrong
What sets our approach apart.
Resident status is tested twice
FEMA determines residence by intention and duration of stay, while the Income-tax Act uses day counts; a person can be non-resident under one and resident under the other.
Old resident accounts are not converted
On becoming an NRI, existing resident savings accounts and demat accounts must be redesignated; continuing to operate them as resident accounts is a contravention.
Sale proceeds have their own rules
Repatriating the proceeds of property sold in India depends on how the property was originally acquired and paid for, not merely on the sale being complete.
FEMA India Rules for NRI questions answered
What people ask before engaging us.
Moved abroad, or moving back?
We will map your Indian assets against your FEMA status and tell you what needs to change.
