Repatriation vs Non-Repatriation Basis
Whether money can leave India is decided when it comes in. Here is the split, side by side.
Repatriation means converting rupees back into foreign currency and sending them out of India. Under FEMA, a non-resident's money in India is either repatriable (free to go back out, principal and income) or non-repatriable (it stays in India, except for current income and a capped annual allowance).
Which one applies is decided at the point the money enters: foreign exchange brought in through banking channels keeps its right to leave; rupee money earned or held in India does not. Every account and investment choice an NRI makes follows from that.
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Repatriable vs Non-Repatriable
Typical source
Repatriable
Inward remittance from abroad, or transfer from another NRE or FCNR(B) account
Non-repatriable
Rupee income and assets in India: rent, pension, dividends, sale proceeds of assets bought from rupee funds
Accounts
Repatriable
NRE (rupee) and FCNR(B) (foreign currency)
Non-repatriable
NRO (rupee)
Principal
Repatriable
Freely repatriable
Non-repatriable
Repatriable only within USD 1 million per financial year, after tax
Current income
Repatriable
Repatriable
Non-repatriable
Repatriable, net of applicable tax
Investments on this basis
Repatriable
Sale proceeds and income can go abroad
Non-repatriable
Schedule IV investments by NRIs and OCIs are deemed domestic investment; proceeds go to NRO
Moving between them
Repatriable
NRE balances can move to other NRE or FCNR(B) accounts
Non-repatriable
NRO to NRE only within the USD 1 million limit
| Point | Repatriable | Non-repatriable |
|---|---|---|
| Typical source | Inward remittance from abroad, or transfer from another NRE or FCNR(B) account | Rupee income and assets in India: rent, pension, dividends, sale proceeds of assets bought from rupee funds |
| Accounts | NRE (rupee) and FCNR(B) (foreign currency) | NRO (rupee) |
| Principal | Freely repatriable | Repatriable only within USD 1 million per financial year, after tax |
| Current income | Repatriable | Repatriable, net of applicable tax |
| Investments on this basis | Sale proceeds and income can go abroad | Schedule IV investments by NRIs and OCIs are deemed domestic investment; proceeds go to NRO |
| Moving between them | NRE balances can move to other NRE or FCNR(B) accounts | NRO to NRE only within the USD 1 million limit |
Key Terms
- Repatriation basis
- An investment or deposit funded from abroad or from NRE/FCNR(B), whose proceeds and income may be sent out of India.
- Non-repatriation basis
- An investment or deposit funded from rupee sources in India. Under Schedule IV of the Non-debt Instruments Rules, NRI and OCI investment on this basis is treated as domestic investment by residents.
- Current income
- Recurring income such as rent, dividend, pension and interest. It can be remitted from NRO once tax is deducted, paid or provided for.
- USD 1 million route
- The remittance-of-assets facility that lets NRIs and PIOs take NRO balances and sale proceeds abroad, per financial year, subject to tax.
Which money can leave India, and how. No signup.
Property: The Case That Mixes Both
Property shows the rule clearly. If an NRI bought a flat with foreign exchange through banking channels or from NRE or FCNR(B) funds, the sale proceeds can be repatriated up to the foreign exchange paid, for at most two residential properties. If the flat was bought with rupee funds, or inherited from a resident, the proceeds go to NRO and leave only through the USD 1 million route.
The same flat can therefore be partly repatriable: up to the foreign exchange originally paid leaves on the repatriation basis, and anything above that cannot use it.
How CCFE Tests This
Questions name an account or a source of funds and ask whether it can go abroad. The common trap is treating NRO as fully blocked: NRO money can leave, as current income net of tax and up to USD 1 million a year of capital. The reverse trap is assuming any NRI money is repatriable; rupee income credited to NRO is not, until it uses one of those two routes.
FAQs
What is the difference between repatriable and non-repatriable?expand_more
Repatriable money (NRE, FCNR(B), investments funded from abroad) can be converted and sent out of India freely. Non-repatriable money (NRO, investments from rupee funds) stays in India except for current income and up to USD 1 million a year after tax.
Is an NRO account repatriable?expand_more
Partly. Current income such as rent, dividend, pension and interest can be remitted net of tax, and other balances up to USD 1 million per financial year under the remittance-of-assets rules.
Can I move money from NRO to NRE?expand_more
Yes, within the USD 1 million per financial year limit under the remittance-of-assets rules, and subject to tax.
What does investment on a non-repatriation basis mean for an NRI?expand_more
The investment is treated as domestic investment by a resident. Sale proceeds are credited to the NRO account, not remitted abroad directly.
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