A lot of NRIs have shown interest in transferring funds from NRO to NRE since the notification came out on May 7, 2012. However, very few have actually transferred funds. This is mainly due to the lack of awareness or experience in newly issued notification in case of NRIs, Banks as well as Chartered Accountants. Additionally, most of the queries from NRIs have been for the procedural aspects only.
After successfully helping my clients in transferring funds from NRO to NRE, based on my experience, I have summarized the procedures in 4 simple steps as follows:
1. Obtain Chartered Accountant (CA) Certificate in Form 15CB
- Select and Consult a Chartered Accountant
- Explain your situation
- Provide documentation/explanations
- CA will verify the source of funds and whether income tax is deducted and/or paid
- On verification, CA will issue certificate in the prescribed Form 15CB
2. Submit Form 15CA online
- Access www.tin-nsdl.com
- Click “Services” and then “Form 15CA”
- Read Guidelines and familiarize with Form 15CA requirement
- Click “Form 15CA (Online Filing)” in the Forms section
- Fill up all the information as required
- Click “Proceed”
- Please review the details and then confirm to upload the form electronically
- On Confirmation, the form is electronically submitted to the Income Tax Department
- Form 15CA with an Acknowledgement No. is generated
- Print and sign the form
3. Submit documents to Authorized Dealer/Bank where NRE accountis kept
- Form 15CA
- Form 15CB
- Check (cheque) or Demand Draft for the amount
- Request letter or Form as per respective bank’s requirement
- Complete any other document, requirement or formality
4. Transfer: On verification of submitted documents, Bank will process the transfer and credit NRE account.
Timing:
Obtaining CA certificate is the most important and most time consuming step. Each CA will have his/her own procedures to verify the source(s) of funds and whether source is tax exempt and/or income tax is paid. Once you complete Step # 1 (obtain CA certificate in Form 15CB), other steps could be completed within a day and mostly the same day.
Source:
The key thing in verifying the source is determining the sources of funds. For Example, if you have a NRO FD of 3 years maturing on July 31, 2012. Source of fund is not NRO FD matured on which TDS deducted but it consists of 1. Principal when FD was made in 2009 and 2. Interest on the Principal from 2009-2012. Interest on NRO FD is considered current income and is taxable in India. While TDS could be deducted on Interest (current income), it is also important to verify the source of Principal. The CA certificate includes verification of all sources of NRO funds.
Things to consider/remember:
- Every bank’s process and procedure for transferring funds from NRO to NRE is different so it is advisable to inquire, know and understand the procedures of the bank with which you have NRE account.
- Filing Form 15CA is very important as the form is electronically submitted to the Income Tax department. Any error could generate an inquiry from the Income Tax department.
- As Part B of the Form 15CA is filled based on CA Certificate issued by the Chartered Accountant in the Form 15CB, experience of a Chartered Accountant in dealing with NRIs and issuing CA certificate especially for NRO to NRE transfer should also be considered.
- Even though RBI issued the notification allowing transfer from NRO to NRE on May 7, 2012, there is still lack of awareness among bank employees of the procedures and/or requirements. E.g. Bank employees may not know the BSR code of their own branch and could take few hours to a day to respond. Please note that BSR code of bank branch is a basic requirement (more than 3 years old) for any remittance, irrespective of the purpose and to be included in #4 of the Form 15CB whereas this notification came out less than 3 months ago. So, it is important to work with a knowledgeable bank person or have someone to liaison with the bank and/or have patience.
In summary, Nothing should deter you from transferring your funds from NRO to NRE account. My advice is to transfer funds from NRO to NRE as soon as possible to enjoy 5 benefits and reduce tax drag with the help of your experienced Chartered Accountant.
Please note that the rules and forms for the transfer have been revised via CBDT circular 67 dated Sept 2, 2013. For more information, users comments and my answers/explanations, visit my blog “15CA/CB rules revised Again: 15CA/CB May NOT be required for NRO to NRE transfer”
Comments
RBI allows transfer from NRO to NRE account 2: Understand Tax Drag and Why transfer. | Naresh J. Patel & Co, Chartered Accountants
[…] also review “Procedures for transferring funds from NRO to NRE”. […]
Rajesh Mehta
Dear Jigar,
I believe, there is only transfer of funds from NRO to NRE account.
From where is the question of TDS coming into picture?
If you can throw some light on this?
Ca Kalpesh Korat
Dear Mr Mehta,
its not about tds at the time of transfer, but payment of tax before transfer which may or may not be by way of tds, in my view.
Ryan D'Souza
I am an NRI working in UAE, I earn rental income on my property in India, proceeds are deposited into my NRO a/c. Can these funds be transferred to NRE a/c after TDS has been deducted.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
These funds can not be directly credited to NRE account. However, you may transfer the funds to NRE after furnishing details and performing certain procedures in consultation with your CA and your bank. Thanks.
Vijay Sethi
Sir,
I need 15CB from my CA who is also filing for my tax returns. I am paying regularly for the tax returns being filed.
I want to remit certain amount to USA from my tax paid and declared NRO account. I am going to ask my CA to prepare the 15CB certificate. Am I supposed to pay separately for the certificate(15CB) ?, if so how much ?.
I am not sure and would like a professional opinion.
Thank you in advance.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
As issuing CA certificate in 15CB is an additional work and also a certificate that require CA to go through documents and verify the source as well as taxability of amount to be transferred, CA would charge some fees. However, whether CA charges the fees or not and how much, that would depend on your relationship with the CA, time involved in verification as well as quantum of work / fees paid by you for other services, among many other criteria. The best way to know is to contact your CA and ask him. Thanks.
Nitin
Hi,
Can you please tell if a payment of about 36000 dollars to a university towards fee would require submission of Forms 15CB, CA also.
Thanks.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Just provide the admission letter and fee invoice and bank will make payment. No 15CB/CA required.
Prateek K
Mr. Jigar Patel ,
In your blog you have given very good advice but no contact details. How do i get in touch with you for 15CA/CB forms ? Would you be able to help me ? I need to transfer some funds from my NRE/NRO Account to my account in USA.
Thank You.
Regards,
Prateek
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Please check our contact details in the Contact Us section. Thanks!
Harish
I recently tried to transfer funds from my NRO account to NRE account held with ICICI. Having got the required certificate as mentioned above from my CA and completing all the bank docs, I was told I still cant transfer the funds, as the funds in my NRO account had not originated from the NRE account and hence is not repatriable back to NRE. The funds I have in my NRO, has been from rental income and some through savings before I became an NRI. Can you please advise if the bank was right in their judgement? and
If yes, is there another method to transfer funds either to my NRE or my offshore bank account.
If not, will you be willing to help me with this, or at least direct me to the right person.
Many Thanks in advance.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
There is no such requirement. Both Local and remitted funds can be transferred to NRE account with CA certificate and 15CA acknowledgement. There may be some issues relating to how 15CB/15CA have been filled/filed.
Vikas
Dear Mr. Patel,
I recently remitted funds from USA to my ordinary account in India by mistake. Now, I want to transfer it to my NRE account. The source of fund is USA and is already tax paid in the US.
I wanted to know if this transfer will cause any additional tax liability in the US or India?
Thanks in advance,
Vikas.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
No additional tax liability. Tax liability is on income. If your funds in NRO earned any income, you would pay tax on it. Assuming your income in USA while you were a NRI, generally not taxable in India.
Gautam
I closed my NRO FD three months back and transferred the sum to my Mother so as to avoid filing returns every year. Only recently I found out about NRO -NRE transfer. Is it possible now to go back and transfer the funds back to NRE.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Yes, it is possible. But, you will need to follow all related procedures.
Ankit Chhajer
I have two questions.
1. I have moved money from NRE to NRO account in error. As I was not aware of the 30% tax. Now if I want to move that money back into NRE will I have to first pay tax and then transfer it back.
2. I purchased some Silver by trasnferring money from UK to NRE account. Now If I want to sell the silver again in India with little profit can i get that money back into my NRE account or it will have to sit in NRO account?
Looking forward to your guidance.
Thanks
Ankit
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. There is no tax on transfer. You would pay tax on the interest, which I would think deducted as TDS. No more tax to be paid.
2. Profit from ANY investments can not be credited to NRE. Any profit needs to be credited to the NRO only and then after payment of tax (or after TDS) can be transferred to NRE account.
nitin
whether it is mandatory to give 15cb even when funds were transferred from nre to nro and now want to transfer back to nro ( only the principle portion)
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Yes, Currently it is required. However, CBDT has changed the rules effective October 1, 2013 and you may not require the 15CB certificate or file 15CA online to Income tax department. Please see my blog at http://nareshco.com/blog/?p=909 for details. Thanks.
Sandesh
Dear Jigar
I am selling a apartment which I purchased 8 years back in India and buyer will pay the amount to my NRO account.
I would like to tranfer this amount to NRE FD , please let me know what kind of tax I have to pay and what will be the procedure ?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
If you bought the apartment from NRE funds, you can credit funds (upto cost price) to NRE account for maximum of 2 apartments. All gain will be credited to NRO account. If not, all amount will be credited to NRO account. You will need to calculate the tax on the transfer and buyer would have to deduct TDS and only the balance amount will be credited to NRO account. Once taxes paid, funds can be transferred from NRO to NRE and you can create the NRE FD with the bank. Thanks.
Somayaji
Dear sir,
I have gifted my son who is NRI an amount of 1Lakh recently and is credited to his NRO account. Can he transfer this amount to his NRE account without paying tax at source?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Gift from father to son is not taxable in India. Also, transfer from one account (NRO) to another account (NRE) also does not attract any taxes. So, your son may be able to transfer funds from NRO to NRE without paying any taxes. Thanks.
Kuber Singh Chauhan
I have money in ICICI Bank, Jaipur Branch. I have both NRO & NRE account in ICICI Bank. Money has been sent to NRO account from USA ib Dollars. Can you please help us in transfer of money fron NRO to NRE Account.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
From October 1, 2013, 15CB/CA required ONLY for taxable transfer. I think your transfer won’t be taxable as TDS, if any, on the NRO FD would have been deducted.Please refer to my related blog at http://nareshco.com/blog/?p=909. Please contact the ICICI bank in Jaipur and explain your situation. They will be able to transfer the funds just by your request letter and declaration/undertaking. Good luck and share your experience. Thanks.
Vishal
Dear Mr. Jigar,
I have read all your blogs with interest and appreciate your effort in providing professional and clear answers to who require clarifications or who might not have a good grasp of accounts, investments, rules & regulations.
My query is:-
I have purchased some years ago thru online ICICI direct website shares in ICICI bank. By some mistake of my own the shares have been purchased as NRO. How do I transfer these shares back to NRE?
Kindly advise.
Regards.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
You can not transfer the shares back to NRO as your shares would have been credited in NRO-Demat account and purchased from NRO-PIS account. When you sell, proceeds would be credited to NRO account and you may be able to transfer the funds from NRO to NRE and then buy shares from NRE. Thanks.
c.b.desai
Dear Sir,
I am a senior citizen having income below taxable limit. If tomorrow I decide to become N.R.I. can the Sav. & f.d a/c be transferred directly into n.r.e. a/c. or that I have to transfer first in n.r.o. a/c & then into n.r.e. a/c.?
I wish u could reply on my e mail a/c.
Thanks for providing valuable information.
Yours Sincerely,
cbdesai
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
If you become NRI under FEMA, your resident account would be converted to NRO account and not NRE account. The credits to NRE are restricted and that is the reason it enjoys additional benefits such as tax-free interest and full repatriability. Once your funds are in NRO, you may transfer the same to NRE after performing certain procedures and furnishing information in 15CB/15CA. Thanks.
Gopal Agrawal
Sir,
One of our client want to transfer the whole amount from NRO account to NRE account. The money available in NRO is completely towards rental income, capital gain & interest income of last 4-5 years. TDS has been correctly deducted on all the income credited in NRO account. Please tell me the procedure.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
First, please determine if the nature of transfer is included in the “Specified List” as per the revised CBDT circular. If yes, you may not need to furnish any information or submit 15CB/15CA. If not, please consult your CA and he will help you complete the procedures and transfer your funds from NRO to NRE. Thanks.
Aseem
sir you are doing nice job.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Thank you. We really appreciate your support and comments. Do keep visiting our blog and posting your comments. Thanks.
Shailesh Jain
Dear Jigar,
I transferred funds from my NRE account to Savings bank account in India. Also I opened few fix deposites from my savings bank account but the source of fund is NRE account.
My question is: Can I transfer the principal amount back to my NRE account? Do I need to pay any tax? You blog says that there is no need to fill form 15CA and 15CB after October 1st. So How we can initiate this transfer?
Thanks,
Shailesh
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
If you transferred your funds from NRE account that is enough proof that the source of funds is from out of India as only those funds can be credited to the NRE account as per FEMA. You may not need to pay tax on the principal amount originally transferred from NRE account. However, you may have to pay tax on any additional income/gain amount. Most probably, TDS would have been deducted; you would need the certificate in Form 15CB and submit 15CA. You also need to determine if nature of transfer is included in the “Specified List”. If yes, then you may not need to furnish information or file 15CB/CA. Thanks.
Dr Manu jeyam
Hi
My husband who is an NRI lost his mum, she has left him 60 lakh in her joint account in Indian Bank at chennai. We have a joint NRO account in Canara Bank in chennai. How can we reptriate the money to UK.
Would be grateful for some advice as really struggling.
Many Thanks
Manu
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Any amount received as inheritance is not taxable in India. The money can be transferred by giving a copy of the death certificate. Unfortunately, inspite of CBDT circular of requiring CA certificate for only taxable transfer, you may need to furnish the information. Please coordinate with your bank and CA. Thanks.
ANIL SHETTY
Hello Sir,
i am NRI for the past 13 years, i have kept around Rs. 50 lakhs FD’s under my parents name, since they are senior citizens they enjoy extra 1% FD rates, these FD’s are there since 2005 or so, till now TDS was not imposed on FD’s as we are regularly giving Form 15H for my parents, currently i have transfered entire amount (principal and interest earned) to my NRO account, can i transfer complete amount to my NRE accouunt, i have NRO and NRE account in ICICI bank, same branch, your advise will be appreciated
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. NRI can remit upto US $ 1 million per year out of the NRO account outside India, including transfer to NRE account. So, you can transfer the complete amount from your NRO to NRE account, subject to the rules and procedures are followed.
2. For Income tax or any law, you and your father are two different person. you need to determine that transfer from your parents to you e.g. gift, loan, etc. FEMA has different rules and regulation for loan that is repatriable/non-repatriable.
As I mentioned, while you can transfer the entire amount from NRO to NRE, I would recommend that you determine the nature of transfer, seek your CA’s advice, contact bank for the procedures, provide all info. as requested. Thanks.
Sanjay
Hello,
I recently moved to US in January 1, 2014 and submitted PF withdrawal form in India before my departure. I got my PF money today in my NRO account, how can i transfer it to my NRE account? As i understand the credit balances and interest earned on NRO account is subject to Income tax. OR can i transfer to my father as a gift to a normal savings account ? Will it have any tax implication on him or me?
Looking forward to your response.
Thanks in advance.
Sanjay
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. You can transfer the funds from NRO to NRE. Please contact your bank. For more information, please check my 5 blogs related to NRO to NRE transfer (select category “NRO to NRE Transfer”) and 250+ comments. You will get your answer.
2. As per US tax laws, you can give gift of $14000 per calender year to anyone, including your father without attracting gift tax. As per Indian tax laws, you can give gift of ANY amount to your father. Please understand gift tax and income tax of both countries. As a recipient of gift, your father can deposit in the normal saving account. While there may not be any tax on the transfer but any interest/income from the amount may be taxable for your father. Thanks.
Keyur
I am NRI and having own business in SA. I am director of one of Indian company and I am getting salary from that company which I deposit in my Indian Rupee Saving Bank Account (normal). I get salary from the company because I help company to execute some of its work here in SA, for which company earns nice revenues. Two Question: (1) Can I keep Saving Account being NRI. If I want to close this account and transfer this amount to NRE account whats a procedure. I dont have NRO account. Since Indian company has already deducted tax (192) from my salary do I need to pay any extra tax on that? (2) Can I remit this money from India to My business entity in SA as a loan/capital? whats a procedure?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. NRI can not keep resident saving account. You would just tell your bank that you are a NRI and your saving account will be converted into NRO account. Once funds in NRO, you may be able to transfer the funds to NRE. There is no extra tax for transfer. You can transfer the funds net of tax to NRE. You may have to complete the 15CB/15CA requirements.
2. Once your funds are in NRE account, you can remit abroad to SA. No extra procedures required. Just initiate the wire transfer out of NRE to your SA account. Once funds in your SA bank account, you can give loan or invest as a capital or do whatever as per Indian laws. Please check the SA laws. Thanks.
Prakash Swaroopa
Dear Jigar,
I had resident bank account in ICICI Bank, India before moving to US. I have been remitting US dollars into that Indian resident savings a/c legally between my banks at USA and in ICICI bank, India. Now my status has changed and I am US citizen. My most of the deposits in resident a/c are remittances of US Dollars. Those remitted Dollars is not my Income in India and TDS is being deducted as per rules.
I have now opened a NRE a/c in HDFC Bank. My questions are:
1) Can I transfer only those remitted US Dollars into my NRE a/c from resident a/c? What is the procedure or I can simply transfer them online into NRE a/c?
2) How can I transfer entire amount including gain of interest etc. into NRE a/c? What is the current procedure?
3) Since I have resident a/c in ICICI Bank, which bank would be more convenient for me, ICICI or HDFC in terms of transfer of fund to NRE a/c?
Thanks & Regards
Prakash
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. Yes. you can transfer funds from NRO to NRE.
2. If funds were in ICICI all along and FDs in ICICI and TDS deducted, you may be able to transfer the funds with just a request and a form. No need for 15CB/15CA.
3. ICICI bank would be more convenient. Once in NRE account of ICICI bank, you can transfer to NRE account of HDFC bank or any other bank.
Do post your comment once it is resolved and contact us if any problem. Thanks.
Prakash Swaroopa
Dear Jigar,
Thanks for prompt reply and advice. I am going to contact you for your services once NRE is opened at ICICI.
My Indian resident a/c with ICICI has not yet been converted into NRO.
What are your your suggestions/comments:
1) As of now the TDS was deducted from my resident a/c applicable to Indian resident i.e. 10%. Do I need to pay extra taxes on the income as interest?
2) Should I convert my resident savings a/c into NRO first and then open NRE at ICICI?
Thanks & Regards
Prakash
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. You are required to file your income tax return if your income is more than 2,00,000. If it is less, it is recommended to file tax return as you would get the tax deducted refunded to you.
2. I don’t think it matters. Just contact your ICICI bank relationship manager and he will do it. By the time you will be able to open NRE, your resident account would be NRO. It hardly takes a day or two. It is not converted but kept in the same form, just re-designated as NRO. You do not have to transfer but in the system and for you it would be now known as NRO instead of Resident account. While you would get checkbook with “NRO” written, you may still use your resident checkbook to withdraw from NRO. It is that simple.
Thanks.
Prakash Swaroopa
Thank You Jigar & will contact you if required.
SA
Hello Jigar !
Thanks for your advise on this site. I have been living outside India and have transferred amount to my NRE account and have a statement regarding the transfers. Subsequently, being a mandate holder, my father withdrew some amount and invested in chit funds. The chit funds are on my name.These amount would mature and finally would be put it into my NRO account. My questions are :
1. Can I transfer this amount from NRO to NRE.
2. For proof of source of Income, can I show the statement from the bank which I have used to transfer the amount.
3. Is it better for my father to transfer it from my NRO account to his domestic account and do a wire transfer to my foreign account.
I am looking for the best way for repatriating such funds. Please advise.
Thanks,
Sudhakar
Anurag
Dear Sir,
I am NRI with NRE and NRO accounts.
My dad in India wants to gift me INR 40 Lakh.
Can I transfer the money to NRO account and then transfer it to NRE account? Any tax that i need to pay?
Thanks in anticipation,
Kind regards
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
There is no need to transfer gift to your NRO account. Your father, who is a resident in India, can give gift of 40L from his bank account to your account in foreign country. He just have to make a declaration to bank that it is a gift. That’s it. No need to transfer funds in your NRO and then complete the procedures for NRO to NRE transfer. Thanks.
Anurag
Thanks Jigar, really appreciate your response.
One small question, as you mentioned in your response above, what is meant by declaration to bank? what is to be done for that?
Many thanks
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
An application and/or signing a form informing a bank for the purpose of transfer. Usually, banks have a standard procedures/forms to be signed for remitting funds as a gift to relatives. Thanks.
Nakul
Dear Mr Jigar,
Am a NRI, staying in Dubai. I Have NRO account maintained with an Indian Bank. The source of money is sale of Property (situated in India) around 20-25 years back and interest earned on it. Capital Gain taxes (as applicable) have been paid. The transaction went through bank accounts.
Now have to transfer it to NRE account.
All the documents of the transaction are lying in India. The amount at which transaction took place, & the amount currently lying now in the account, is not tallying as it all happened 25 years back.
Do I have to pay any tax on it?
Please guide…
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
If TDS on the interest for all the years have been property deducted, no additional tax is required to be paid. Thanks.
R Shah
Hello Jigar,
I apologize in advance if this question has been answered before but here is my situation and I would like to seek your advice.
1) I have funds transferred as US Citizen (USD-INR) to my Mother as Gift in India our last several years, which is in FD and any Interest earned has Taxes paid in full in India.
2) Now I would like to get those funds in to my NRE Account back as Gift and here is my question :
a) What is the best way to do this transactions ?
b) What is limit’s for Transactions?
Everything I have read so far tells me that I can have my Mom Gift me all the funds Original + Interest (INR) into my NRO account (INR) and then from NRO a/c I can transfer to my NRE Account ? (INR)
Could you please confirm is this permissible by RBI Rules and if so what’s process and best way to handle this ?
My end goal is keep funds in INR under my NRE A/c so it can be Reparable anytime and I can pay Taxes in US on Interest.
Thank you
R Shah
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Gift to NRI close relative is limited to US$ 125,000 (limit increased from $75,000 to $125,000). The transfer can be made from your mother’s resident account to NRO account. Remittance of gift out of India is also allowed; so you may receive the funds in your US account from your mother’s resident account. Or you may also be able to convince your bank to credit your NRE account from your mother’s resident account. Good luck.
Ananda Bhakat
Hi,
I recently sold my flat and deposited whole of the amount to my NRO account. Now I would like to transfer the fund to my bank in USA. Can you please guide me how can I get this done.
Thanks.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
If TDS had been deducted @ 20% on principal or on the gain, you can get the 15CB/15CA and transfer the funds to USA. If not, you would need to compute the tax on the sale of property, pay the tax, obtain form 15CB from a Chartered Accountant and file form 15CA online to the income tax department, submit all the documents to the bank (purchase deed, sale deed, request letter, 15CB/15CA) and then bank would remit the funds. Let us know if you want any help with the transfer. Thanks.
Amita
Dear Mr Mehta,
I’m an NRI holding an NRE account in India
3 yrs back I transferred funds from my NRE account to my wife’s local account and now I want to transfer these funds back to my NRE account.
Please advice on how I can transfer these funds.
Regards,
Amita
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. I am not sure who you are referring to but I will reply.
2. Transfer to spouse has always been controversial in India as they both are separate person for income tax and FEMA.
3. While you may convince the bank to transfer the funds into your NRE account. Bank may not do it and you may have to transfer the funds into your NRO and then NRO to NRE after providing documentation/certificate/information required by the bank. In short, either you convince them (bank) or they convince you. Thanks.
Mandeep Singh
Dear Jigar,
I am an NRI with NRE and NRO accounts in India. I am working in India and drawing salary every month. I have accounts in HDFC and HSBC. My salary gets deposited into my NRO account. HSBC does not transfer my salary from my NRO to NRE account as they say salary is not allowed to be transferred as per RBI guidelines. Whereas, HDFC bank will transfer my salary from NRO to NRE by taking Form 15CA/CB. I use the transferred NRO-NRE funds for maintenance of my family abroad.
Can you please advise why there is a discrepancy in the rules between HDFC and HSBC, when RBI as per their circular dated May 2012 it has confirmed that NRO to NRE transfer is allowed?
Thanks
Mandeep
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. As you are working in India, you are a resident as per FEMA in India and as a result, you are not allowed to keep NRO or NRE account but only resident savings account in India. The banks – HDFC or HSBC would have opened the NRO account before you started working or on your declaration that you are a NRI. You would also become a resident in India as per Income Tax act if you stay in India for 182+ days.
2. RBI has authorized banks for ensuring FEMA provisions are complied with. It is the ban’s responsibility so different banks may have different requirements. However, unfortunately, the bank’s personnel may not be aware of the rules, regulation and requirements resulting in unnecessary requests for documentation/procedures that are not required and unpleasant experience or delays by NRIs. You may also ask them to show/tell you the RBI guideline that does not allow remittance abroad. I bet they would not be able to tell you.
3. That being said, you should not be barred from transferring money abroad for maintenance of your family. It is only the procedures that you would need to follow and may differ between banks. Thanks.
Sachin Gandhi
I read through previous comments and noticed that an Indian resident can gift to other person’s foreign currency account with just gift declaration to bank. Can you please comment whether following scenario is feasible and provide as an alternative to NRO to NRE transfer?
1. I gift an X amount to my mother from my NRO account to her indian resident account.
2. She then gifts the X amount to my UK account in GBP.
Am I missing something? Thanks.
Regards,
Sachin
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. Yes. RBI/FEMA allows an Indian close relative resident to remit funds outside India as a gift upto a limit.
2. A gift is transfer of funds without consideration or expectation of getting it back. The scenario you mentioned is not a gift but is an arrangement to circumvent the law. Please note that RBI as well as the income tax department tracks the funds transfer and an immediate transfers may raise a flag.
3. As a NRI, you are allowed and can easily remit up to an equivalent of US$ 1 million. I would recommend to it officially from your account. Thanks.
HEMANSHI JAIN
Mr.Jigar
I am working with partnership firm, with effect from FY 2013-14 one of partner retired from Partnership firm who is NRI from FY 2014-15 , now his capital is converted into loan.
My question is
1) Whether remitting to an NRI (former Partner) his capital in firm now consider as a loan requires certificate from CA ie 15CA/CB?
2) He holds resident saving a/c , now which he is closing , proceeds of which will be transferred to NRO a/c mandate us to take form 15CA/CB ?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. The 15CB/15CA is required only for any payment that is a taxable transfer and that too, out of India.
2. There is no requirement of 15CB/15CA for any domestic transfer i.e. transfer within India. So you may write a cheque in his name from the firm, which he can deposit where he has NRO account. Thanks.
Stan
Dear Mr. Jigar
I am a non resident. I have recently sold my property in India to my brother. I have an nre and nro account in India. I understand my brother who lives in India can only transfer the funds to my nro account. I want to transfer the funds outside India. When I spoke to the bank manager in India he says I can transfer the funds from nro to foreign currency after submitting an A2 form.
Not sure what is the procedure.
Thank you in advance for your advise.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Form A2 is a declaration. I would think as the payment is in the nature of sale of property and is taxable as capital gain, you would also require Form 15CB and 15CA. Actually, your brother should deduct TDS on the payment made to you for the purchase of property. Please contact your CA and follow up with your bank. Thanks.
Stan
Thanks Mr. Jigar.
Nitin Kulkarni
My parents want to send me some funds as a gift. It is less than $100K.
Apart from getting the 15CB and 15CA forms, what else needs to be done.
I am a US citizen with OCI card, Do I need a PAN card ?
Thanks much
NK
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
There is no need for 15CB/15CA for gift. Your parents just need to contact their bank and sign a declaration and the bank will transfer the funds. While foreign gifts are not axable in USA, you would need to disclose the gift received to IRS. Thanks.
Anil Pore
Dear Mr. Jigar Patel,
I am NRI and OCI card holder. Before coming to US, I had some savings & amts deposited in PPF A/C. I made Bank FD’s from the savings and was filing IT Returns and also paid tax, if any, on the interest income from these sources.
When matured in this Financial Year, we intend to credit the Bank’s FD proceedings and the permissible withdrawals from PPF A/C to our NRO a/c and would like to request the bank to transfer the principal amt from NRO to NRE a/c.
If I can establish to the Bank source of funds by producing the FD receipts & PPF passbook (and or if the amts are deposited in the same Bank Whose FD’s are matured), to me it appears, to the extent of principal amounts not being income and such funds will not attract any tax liability, as per the new amended rule, even the procedure in Form 15CA & CB is not required for such transfer to NRE A/C.
Is my understanding correct?
I would appreciate your advice.
With Best Regards,
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
In the perfect world, what you said would work. However, you may have to give a CA certificate (whether in Form 15CB or other) for the transfer from NRO to NRE. Please contact your bank to convince without CA certificate. If not, please contact your CA for the certificate. Thanks.
Suman
Hello.
I understand the NRE and FCNR accounts are both tax free in India. But how does the tax procedure work in USA? 1. Will I receive a 1040 end of each year for the interest earned on these accounts? 2. And then do I file it along with my yearly tax return? 3. Is the interest taxed as a 1099 or W2 earning?
How does the interest acquired on NRE account gets calculated for tax filing? Say I deposited $10,000 in NRE account when the dollar rate was 60 rupees @ 10% yearly interest. And within the same year say the rupee depreciates or appreciates to 70 or 50. So that means for that year, I will be taxed on $857 or $1200 (interest converted to dollars)?
sorry for the silly questions. Trying to determine if investing in NRE account is a good option.
Thank you very much.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. Only foreign banks e.g. Citi will issue 1040. Indian private and nationalized banks do not issue 1099.
2-3. You would ask Indian bank to provide a certificate for the interest on the deposits and report the interest in the Schedule related to income from interest in dividend.
4. Interest on NRE would be in INR only. You would need to convert the total interest received during the year at an exchange rate on December 31 of that year, which is published by the US Treasury department.
5. NRE FD is always a good option as you get 9% return. Even after assuming 4% INR depreciation, your USD return would be 5%, way more than meager 1% in the USA. Even after 30% tax, you would get 5 times your after tax return in the US.
6. Let us know if you need help with NRE FD and liaison with bank for better exchange rate and higher FD rates. Thanks.
dinesh
I have one query hope you can give your views.
I have few long term NRE FDs (10 yrs.) of significant amounts . As I plan to return India for good next year then my status will be changed to resident. As interest on these FDs is tax free as of now. once status is changed from Non resident to Resident , then interest on these NRE FDs will be taxable. In such a situation what is your opinion in order to save tax. Do I need to break these FDs prematurely and invest in mutual funds in order to save tax . What are options for me in such senario . What is your opinion.
I was told that these NRE FDs can not continue to be as NRE FDs once status is changed from non resident to resident and interest earned on these FDs will be taxable. Kindly also confirm this information from your contacts as I am getting conflicting information on this issue.
Thanks
Dr. Saksena
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
1. As per FEMA regulation, NRE accounts may not be continued on your permanent return to India and need to close. Any interest on NRE account would be exempt from tax.
2. You have an option to transfer funds to your RFC account or your resident account. Any interest on RFC account would be exempt from tax provided your status is either Non Resident or Not Ordinary Resident. The interest on resident account would be taxable.
3. If you have significant amounts, tax is a very important consideration. Please check our blog on Tax drag to understand effect of Tax on your investment in long term at http://nareshco.com/blog/?p=229.
4. India have many investments that generate taxfree returns. However, planning and selection of options are crucial.
5. I would suggest to seek professional advise from your CA or investment advisor or any other expert who knows FEMA, Income Tax as well as Investments before making decision about NRE FDs as it could materially affect your return. If interested, you may also contact us with your detailed situation and we will be happy to help. Thanks.
RP
Dear, Jigar,
A friend of mine has some stocks that he bought 40 some years ago He is a an NRI. He has opened a pis account. If he sells the stocks, the money will be deposited in his NRO account. There is no tax for long term investment. Can this money be converted to NRE?
Thansk
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Yes. He can. Thanks.
Deep
One of my friends withdrew some cash (<10 lakhs) from his HDFC NRE account a couple of weeks ago thinking it was needed for an emergency. But t so happens that it was/is not required. Would the bank allow the money to be deposited back to his NRE account?
Thanks..
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
I doubt it but you can try. If bank doesn’t allow, deposit it in NRO account and transfer from NRO to NRE.
Please note that cash deposit of Rs. 10 lakhs+ in a bank account during the year is reported to the Income Tax department so while it does not exceed 10L now, make sure it does not exceed 10L during the whole year or be ready if Income tax department issues the notice. Thanks.
Navin
Hai Sir,I am an NRI working in UAE.I want to transfer a little big amount to my brothers indian local bank account.Shall i need to pay tax for that and what maximum amount I can tranfer ?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Gift received from NRI brother is not taxable in India. You can transfer any amount. However, it is recommended to have a Gift deed/letter and your brothers need to communicate in the income tax return of the gift received. Thanks.
Elizabeth
Hai, I need help……..i having nre and nro a/c with icici bank. I invested some money into icici prudential life insurance from my nre a/c.Recently I closed that investment, unfortunately I submitted my nro a/c statement by mistake. What is the procedure for transfer my fund from nro to nre?
Kindly help me
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Please try to convince the bank to transfer the funds without 15CB/15CA. If not, contact your CA to issue 15CB/15CA to transfer the funds. Thanks.
Arjun
Hello.
I am a resident of USA and had sent money to my sister a while back. That amount (50 lac rupees) is currently in my sister’s account (resident of India) and I am the beneficiary/nominee on that account.
Now with the growing age, I am trying to determine how the money can go to my kids (residing in USA) after our demise (sister and me).
Is any of the following an option:
1. Make a living will to say that money go to my kids after the my sister’s and my demise?
2. Open a NRO account under my name, ask my sister to transfer the amount to my account and then I add my kids as a nominee on my account.
3. Can my sister gift me the money in US dollars (less than 100K) in one transaction? Will I be taxed on this gift amount? I will be loosing lot of money with this option though because earlier I got converted $ to 40 rupees…..but willing to consider this option if available.
I appreciate your advice on this matter.
Thank you,
Arjun
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
All three options are available to you. Any foreign gift is not taxable in USA and any gift from close relative is not taxable in India. However, I would suggest you to contact your CA or advisor for the same. Thanks.
sachin shangarpawar
Dear Jigar Bhai,
When i went to my CA to get a 15 CB/CA he asked me for foreign amount. He and my bank could not comprehend a concept of transferring INR from NRO to NRE without currency conversion.
When I look at the 15 CB and CA it asks for foreign currency and amount. Thus prima facie even income tax procedures also do not support INR transfer from NRO to NRE.
Is this by accident or currency conversion is a must for NRO to NRE transfer?
All I want to do is move the funds from NRO to NRE account and then from there in repatriable MFs ( to allow future ease of money movement).
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
There is no conversion required for NRO to NRE transfer. In your case (NRO to NRE transfer), foreign currency is also INR. Thanks.
Smita
Dear Mr. jigar,
My CA advised me that I need to be present in India at the time of initiating NRO to NRE transfer. Is this really true?
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
No. You don’t. Your signatures would be required on Form 15CA, which can be emailed to you and then you can email it to the bank. Thanks.
ever
Dear Mr. jigar,
Few years ago i have transferred my 8 lacs from NRE account to Normal saving account (Not NRO). Is it possible now to transfer same 8lacs saving account to nre account ? Without paper work, straight way can i transfer it through netbank? Appreciate your advise
Thanks
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Your resident account needs to be redesignated as NRO. While you can try to convince your bank to transfer from NRO to NRE without 15CB/15CA, if they are not convinced, you would need to do all the paperwork. Thanks.
Soniya
Dear Sir,
Please let me know whether there is any tax applicable on transfer of NRO to NRE account. There is no FD in NRo account . No interst income .
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
There is no tax on transfer. Tax is on the source of funds. If no interest, what is the source of principal or the amount that you want to transfer. Whether taxable or not. If not, why not; if yes, whether tax is paid. Please follow up with your bank and/or your CA for the transfer. Thanks.
S N Sharma
Till AY 2014-15, I was a resident Indian. But from 1st a April 2014 I am an NRI, all my resident sb and fdrs are now converted to nro, can I transfer funds from the nro accounts to nre
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
Yes.
Madhavi
Hi.
Your website has been very helpful for guidance to NRIs. I had one query though. We are trying to do NRO TO NRE transfer and wanted to know what would be the COUNTRY TO WHICH REMITTANCE IS MADE. since the tranafer is INR TO INR, I think the country of remittance will be India though the remittee address is an overseas address. My CA feels it should be our overseas country and the bank branch has no clue. So I thought this would be tge best forum to ask this question. Request you to please reply , so we can proceed.
Thanks and please keep up the good work.
Jigar Patel, CFA (USA), MBA-Finance (USA), CPA (USA), CA (India)
You may use India and write a note that it is a NRO to NRE transfer. Thanks.