 Repatriation-NRI |
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The NRI's are permitted to repatriate rupee funds/assets from India as under:
- All types of current income in the nature of Interest, Dividends, Pension, Rent, Mutual Fund distribution is permitted for repatriation.
- NRIs are allowed to repatriate the rupee funds as under:
- to meet expenses in connection with education of their children
- to meet the medical expenses abroad of the account holder or his family members.
- The sale proceeds of property held for more than 10 years.
- Any legacy, Bequest, Inheritance by the NRI.
The remittance on above account is subject to an overall limit of US$ 1 million per year.
- The sale proceeds of the immovable property acquired by the NRI in foreign exchange is allowed to be repatriated up to the value of Purchase consideration paid in Foreign Exchange.
- Any other balances or assets held can be repatriated by obtaining special permission of the Reserve Bank India on the ground of hardship etc. and subject to conditions as specified in the permission.
- NRI / PIO may remit an amount, not exceeding US $ 1million per calendar year, out of the balance held in NRO accounts.
PROCEDURE FOR REPATRIATION
The NRI should make an application to Authorised dealer for repatriation. The Authorised Dealer on satisfying itself with reference to the particulars/documents submitted by the concerned NRI, allow the repatriation of the same.
VIKALPA can help you in complying with the legal and procedural formalities for the purpose of repatriation in most convenient and cost effective manner.
Exemption certificate for tax deducted at source
The rate prescribed for TDS from NRI's income is the maximum rate of tax at which relevant Income is taxable in India. |
Interest 30%*
Capital Gains on equity shares & equity oriented mutual fund units sold on recognized stock exchange.
Short term Capital gains 10%*
Long term Capital gains Nil
Capital Gains on other assets, mutual funds & equity shares other than above
- Short Term Capital Gains 30%*
- Long Term Capital Gains 10%* or 20%
* The above rate is further increased by Surcharge of 10% if income exceeds Rs. 10 lakhs and further by 2 % by way of education cess after enactment of The Finance Bill, 2005. |
However the Actual tax liability is lower than above because |
- No tax on Income up to Rs.1,00,000 and lower rate up to Rs.2,50,000.
- Losses under capital gains and reinvestment of Capital gains.
- Lower rate of taxation under DTAA.
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In order to assist such situation, the Income-tax Act has provided procedure under Section 195 - 197 whereby an NRI can apply to the Assessing officer to issue specific certificate authorising the payer of income to deduct tax at a lower rate or nil rate. |
- By the payee for NIL/Lower rate - Form 13(Sec 197).
- By the payee for NIL tax Sec 195(3)
Form 15- Banking Companies.
Form 15D- other person (for sums other than interest & dividend.
- By the payer if he considers that the whole of the sum/income would not be chargeable for tax so that A.O. may determine the appropriate portion of such sum attracting TDS-Form not prescribed.
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The NRI should estimate his income, tax liability and likely TDS and then apply for partial or complete Tax Exemption Certificate. |
The payer shall deduct tax in accordance with the certificate issued by the Assessing officer |
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