The Foreign Exchange Management Act (FEMA) governs all financial transactions between Indian residents and non-residents. For NRIs investing in India — whether in property, shares, mutual funds, or bank deposits — FEMA compliance is non-negotiable. Violations attract civil penalties up to three times the violation amount.
NRI Bank Accounts: NRE vs NRO vs FCNR
NRE (Non-Resident External): Maintained in Indian Rupees. Both principal and interest are freely repatriable. Interest is fully exempt from Indian income tax. Ideal for parking overseas earnings. NRO (Non-Resident Ordinary): For income earned in India (rent, dividends). Repatriation limited to USD 1 million per year after tax. Interest taxable at 30%. FCNR (Foreign Currency Non-Resident): Maintained in foreign currencies (USD, GBP, EUR etc.). Protects against rupee depreciation. Interest tax-free. Fixed deposits only.
Repatriation of Funds
NRIs can repatriate up to USD 1 million per year from NRO account balances after paying all applicable taxes and obtaining a CA certificate in Form 15CB and filing Form 15CA online. For sale proceeds of immovable property, additional documentation and sometimes RBI approval may be required. Our CA handles the complete 15CA/15CB process and coordinates with your bank.
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