Home >Money >Personal-finance >NRE account funds freely repatriable outside India

I am a permanent resident of UK. I live in London as well as India but make money only in India. Is it okay to remit from my Indian bank account to a UK account? How do I remit? Are there any restrictions or tax implication?

—Khush Ranjan

Usually Indians residing abroad keep a non-resident external (NRE) or a non-resident ordinary (NRO) accounts in India. Funds in NRE account are mostly freely repatriable outside India. You are allowed to receive income from investments in India in your NRE account and remit them outside India. Remittances from NRO accounts are allowed based on limits prescribed by the Reserve Bank of India (RBI). You are allowed to remit a maximum of $1 million in one financial year. A certificate from a chartered accountant must accompany such a remittance; it is required to be submitted by you to the bank.

Tax as applicable in India must have been paid on all incomes that are proposed to be remitted. Do note that even though your residential status is likely that of an NRI, income earned by you from sources in India, is highly likely to be taxable in India. Therefore, before preparing to make any remittance, you must make sure that you have filed an income tax return in India and paid taxes as due from your income earned in India.

Remittances made outside India are usually heavily monitored and, therefore, you must exercise due caution in making them and do full compliance.

What are the tax implications and other financial implications (both for India and the US) of a US-based NRI who is the “second holder" in an Indian demat account, mutual fund accounts and other financial accounts?


RBI has allowed NRIs to be joint account holders in resident bank accounts on “either or survivor" basis. The NRI must be a close relative, as defined in Section 6 of the Companies Act, 1956, to the main account holder who is an Indian resident. Even though these accounts will have an NRI joint holder, it will be treated as resident account for all purposes. Cheques, instruments, remittances, cash, card or any other proceeds belonging to the NRI shall not be eligible for credit to this account. Therefore, if any income is credited to this account, the resident holder will bear tax on such income. The NRI who is a close relative shall operate such an account only for and on behalf of the resident for domestic payment and not for creating any beneficial interest for himself. The close relative is the main account holder. Where due to any eventuality, the NRI account holder becomes the survivor, it shall be categorised as an NRO account. These rules shall apply to all types of resident accounts.

Archit Gupta is founder and chief executive officer, ClearTax. Queries at mintmoney@livemint.com

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