Last month, a Dubai-based IT professional reached out to our Belong WhatsApp community with a question that stopped me in my tracks.
"Ankur, I've invested ₹2 crore in Indian mutual funds over 8 years. Now I want to move everything to my Emirates NBD account.
My bank says I can only send USD 1 million per year. Is this true? Nobody told me this when I started investing."
Yes. It was true. And he was far from alone.
At Belong, we help NRIs navigate the complex world of India investments daily. This question about repatriation limits comes up in almost every conversation. The painful part? Most NRIs discover these rules only when they try to move money out.
This guide explains everything about repatriable and non-repatriable investments. The rules, the limits, the tax implications, and most importantly, the mistakes that cost NRIs lakhs every year.
Whether you're just starting to invest in India or planning your exit strategy, this is the one article you need to understand how money flows between India and your country of residence.
What Does Repatriable and Non-Repatriable Actually Mean?
Let's cut through the jargon. These terms describe one simple thing: can you take your money back abroad, or is it stuck in India?
Repatriable investment means you can transfer the entire amount, including principal and profits, back to your foreign bank account without any limit. Think of it as money that can freely cross borders.
Non-repatriable investment means your money faces restrictions when leaving India. You cannot send it abroad freely. There are annual limits, documentation requirements, and tax obligations before any transfer happens.
The source of your funds determines which category your investment falls into. Money earned abroad and brought to India typically stays repatriable. Money earned in India (rent, dividends, property sales) falls under non-repatriable rules.
👉 Tip: Before making any investment in India, ask yourself: "Will I eventually want to send this money abroad?" Your answer determines which account and investment structure you should use.
The Foundation: NRE vs NRO Accounts
Every NRI investment decision starts with choosing the right account. This single choice determines your repatriation freedom for years to come.
NRE Account (Non-Resident External)
This account holds your foreign earnings in Indian rupees. The key features that matter for repatriation:
- Fully repatriable: Both principal and interest can be sent abroad anytime. No limits, no special forms, no waiting.
- Tax-free in India: Interest earned faces zero Indian tax. No TDS (Tax Deducted at Source) deducted.
- Funded from abroad: You deposit money earned outside India.
An NRE account is your passport to freely moving money between India and your current country. Investments made through this account inherit its repatriable status.
NRO Account (Non-Resident Ordinary)
This account manages income you earn within India. Think rental income, dividends, pension, or proceeds from selling Indian assets.
- Limited repatriation: USD 1 million per financial year, maximum. This limit covers all your NRO accounts combined.
- Taxable: Interest earned is taxable at 30% plus applicable surcharge. Banks deduct TDS automatically.
- Funded from Indian income: Rental income, sale proceeds, dividends, and pension go here.
The NRO account is essential for managing Indian income. But the repatriation limit catches most NRIs off guard.
👉 Tip: Open both NRE and NRO accounts. Use NRE for investments you might want to repatriate freely. Use NRO for Indian income management. Compare features using Belong's NRI account comparison resources.
The USD 1 Million Annual Limit: What Most NRIs Miss
This single rule causes more frustration than any other. Let me explain exactly how it works.
As per RBI's Foreign Exchange Management Act (FEMA) guidelines, NRIs can repatriate up to USD 1 million per financial year from their NRO accounts. This limit applies to:
- Sale proceeds from property
- Fixed deposit maturity amounts
- Mutual fund redemptions
- Stock market gains
- Any other income earned in India
The limit resets every April 1. Any unutilised portion does not carry forward.
Here's what catches people:
The limit is cumulative across ALL your NRO accounts, not per account. If you have NRO accounts with HDFC, ICICI, and SBI, the combined repatriation from all three cannot exceed USD 1 million in one financial year.
Real scenario from our community: Vivek sold two apartments in Mumbai, generating ₹3.5 crore (approximately USD 4.2 million at current rates). He could repatriate only USD 1 million in FY 2025-26. The remaining ₹2.67 crore stayed stuck in his NRO account for the next 3+ years of gradual repatriation.
His options were limited:
- Wait multiple years to repatriate everything
- Invest the surplus in Indian assets
- Apply for special RBI permission (granted only for medical emergencies, education, or specific real estate purchases abroad)
👉 Tip: If you're selling high-value Indian assets, plan the sale timing across financial years. Sell one property before March 31 and another after April 1 to utilise two years' limits.
FCNR Deposits: The Often Forgotten Repatriable Option
Foreign Currency Non-Resident (FCNR) accounts offer a middle path that many NRIs overlook. Here's why they matter:
- Currency protection: Deposits stay in foreign currency (USD, GBP, EUR, etc.). No rupee depreciation risk.
- Fully repatriable: Both principal and interest can be transferred abroad without limits.
- Tax-free interest: No Indian tax on interest earned.
The catch? FCNR requires a minimum one-year tenure. If you withdraw early, you lose all interest earned.
FCNR works brilliantly for NRIs who want safety, dollar exposure, and full repatriation freedom. Compare current rates across banks using Belong's FCNR deposit comparison tool.
Repatriable vs Non-Repatriable: Quick Comparison
Feature | Repatriable (NRE/FCNR) | Non-Repatriable (NRO) |
|---|---|---|
Annual Limit | No limit | USD 1 million |
Documentation | Simple form | Form 15CA, 15CB, CA certificate |
Tax on Interest | Tax-free | 30% TDS |
Processing Time | 1-3 days | 7-21 days |
Best For | Foreign earnings | Indian income |
Property Sale Proceeds: Special Repatriation Rules
Property sales deserve special attention because the rules differ based on how you purchased the property.
Scenario A: Property bought with NRE/FCNR funds
If you purchased property using money from your NRE or FCNR account, you can repatriate the entire sale proceeds. But there's a lifetime limit: maximum two residential properties.
For the third property onwards, even if purchased with NRE funds, proceeds are subject to the USD 1 million annual limit.
Scenario B: Property bought with NRO funds or before becoming NRI
Sale proceeds are non-repatriable beyond USD 1 million per year. This applies regardless of how many properties you sell.
Documentation Required
For property sale repatriation, banks require:
- Original sale deed
- Proof of original purchase (to verify fund source)
- Capital gains computation
- TDS certificates (buyer deducts TDS at 12.5% for long-term gains or 30% for short-term gains, as per Income Tax Department guidelines)
- Form 15CA and 15CB (for NRO repatriation)
Learn more about NRI property sale rules and tax implications.
👉 Tip: Keep all property purchase documents safely. Banks require proof that you bought the property with NRE funds to allow full repatriation. Lost documents mean your proceeds become subject to NRO limits.
Form 15CA and 15CB: The Documentation Barrier
These forms are mandatory for repatriating money from NRO accounts exceeding ₹5 lakh in a financial year. Understanding them saves weeks of delay.
Form 15CA is a declaration you file with the Income Tax Department. It confirms you're aware of tax obligations on the money being sent abroad.
Form 15CB is a certificate issued by a Chartered Accountant (CA). The CA verifies that all taxes have been paid on the amount being repatriated.
How the Process Works
- Gather documents: Source of funds proof, tax payment challans, bank statements
- Engage a CA to prepare Form 15CB (cost: ₹3,000-10,000 depending on complexity)
- CA files Form 15CB on the Income Tax portal
- You file Form 15CA online, referencing the 15CB acknowledgment
- Submit both forms to your bank along with Form A2
- Bank processes the repatriation
Timeline: 7-15 working days if documents are ready. Can stretch to 30+ days if documentation is incomplete.
For detailed step-by-step instructions, read our guide on filing Form 15CA and Form 15CB online.
When You Don't Need These Forms
Form 15CA/15CB is NOT required for:
- Transfers from NRE accounts (fully repatriable)
- Transfers from FCNR accounts
- NRO repatriation below ₹5 lakh per year
- Transfers covered under Rule 37BB exemptions
👉 Tip: Start the Form 15CB process immediately after receiving funds in your NRO account. Don't wait until you want to repatriate. CA verifications take time, and missing documents discovered mid-process cause painful delays.
Tax Implications: What You Actually Pay
Tax treatment differs dramatically between repatriable and non-repatriable investments.
NRE/FCNR (Repatriable)
- Interest income: Completely tax-free in India
- No TDS: Banks don't deduct any tax
- Capital gains: If investments were made through NRE account, gains are taxable as per normal capital gains rules, but with no repatriation restrictions
NRO (Non-Repatriable)
- Interest income: Taxable at your slab rate, with 30% TDS at source
- Capital gains: Fully taxable in India before repatriation
- Rental income: TDS of 30% deducted by tenant (for rent exceeding ₹50,000/month)
DTAA Relief
If your country has a Double Taxation Avoidance Agreement (DTAA) with India, you might get tax relief. UAE has a DTAA with India that can reduce withholding tax rates on certain income types.
To claim DTAA benefits:
- Obtain Tax Residency Certificate from your country of residence
- Submit Form 10F to the bank
- Provide self-declaration of eligibility
This can reduce TDS from 30% to as low as 10-15% on some income types. Learn more about claiming DTAA benefits.
The 7 Costly Mistakes NRIs Make
Having helped hundreds of NRIs through our advisory services and WhatsApp community, we've identified patterns. Here are the mistakes that cost the most money and stress:
Mistake 1: Using the Wrong Account Type
Investing foreign earnings through NRO instead of NRE. This immediately makes your investment non-repatriable beyond USD 1 million annually.
Fix: Route foreign earnings through NRE. Use NRO only for managing Indian-source income.
Mistake 2: Ignoring the USD 1 Million Limit Until Exit
Many NRIs don't learn about this limit until they want to leave India permanently or need large funds abroad.
Fix: Plan your India investment strategy with repatriation in mind. If your portfolio might exceed USD 1 million, use repatriable channels from day one.
Mistake 3: Missing Form 15CB Before Wanting to Repatriate
Starting the CA certification process only when urgently needing funds abroad causes weeks of delay.
Fix: If you have significant NRO balances, keep Form 15CB documentation ready before you need it. File ITR regularly even if not mandatory, as it simplifies CA verification.
Mistake 4: Not Updating Bank About NRI Status
Continuing to use resident savings accounts after becoming NRI violates FEMA regulations. This creates complications during repatriation.
Fix: Convert resident accounts to NRO within 3-6 months of becoming NRI. Open NRE account for new foreign income. Understand the difference between NRE and NRO accounts.
Mistake 5: Property Purchase Funding Source Not Documented
Using cash or informal transfers to buy property, then being unable to prove NRE funding during sale repatriation.
Fix: Always purchase property through proper banking channels. Keep clear paper trail showing NRE account as funding source.
Mistake 6: Letting NRO Balances Accumulate Beyond Limits
Collecting rental income, dividends, and other Indian income in NRO without periodic repatriation. The balance grows beyond what can be moved in one year.
Fix: Repatriate NRO income annually rather than letting it accumulate. Read more about repatriation rules after selling investments.
Mistake 7: Not Considering Currency Risk
Investing foreign earnings in rupee-denominated NRE deposits, then watching rupee depreciate 3-4% annually against the dollar.
Fix: Consider FCNR deposits or GIFT City USD fixed deposits for dollar protection alongside your rupee investments.
GIFT City: The Modern Alternative to Traditional NRI Accounts
Here's something many NRIs don't know: there's now a way to invest in India while avoiding most of these repatriation headaches.
Gujarat International Finance Tec-City (GIFT City) is India's International Financial Services Centre. For NRIs, it offers a fundamentally different structure:
How GIFT City Changes the Game
- USD-denominated: Investments stay in dollars. No rupee conversion, no currency risk.
- Fully repatriable: Transfer money back to your foreign account without the USD 1 million limit, without Form 15CA/15CB.
- Tax-free in India: Interest on GIFT City fixed deposits is completely tax-free. You pay tax only in your country of residence.
- No NRE/NRO required: Invest directly from your foreign bank account.
GIFT City Investment Options
USD Fixed Deposits: Rates of 4.5-6% annually, with tenures as short as 7 days. Compare this to FCNR's minimum one-year lock-in. Check current rates using Belong's NRI FD comparison tool.
Mutual Funds: Access to GIFT City mutual funds including global equity options like DSP Global Equity Fund and Tata India Dynamic Equity Fund.
Alternative Investment Funds (AIFs): For high-net-worth investors, GIFT City AIFs offer tax-efficient access to private equity, real estate, and structured debt.
For UAE-based NRIs, the tax benefit is remarkable. UAE has no capital gains tax. Combined with India's GIFT City tax exemptions, your returns can be entirely tax-free. Learn more about GIFT City tax benefits for NRIs.
👉 Tip: If you're starting fresh with India investments and flexibility matters, consider routing through GIFT City instead of traditional NRE accounts. You'll thank yourself when repatriation time comes.
Choosing the Right Investment Path: A Decision Framework
Given everything above, here's how to think about your options:
Choose NRE if:
- You're investing foreign earnings
- You want full repatriation freedom
- You prefer rupee-denominated investments
- You're comfortable with currency risk
Choose NRO if:
- You're managing Indian income (rent, dividends, pension)
- You don't plan to repatriate large amounts (under USD 1 million)
- You need to comply with FEMA regulations for India-source income
Choose FCNR if:
- You want dollar protection
- You can lock money for at least one year
- Full repatriation is important
- You prefer guaranteed, safe returns
Choose GIFT City if:
- You want dollar-denominated investments
- You want full repatriation without documentation hassles
- Tax efficiency is a priority
- You're building long-term wealth in India
For personalised guidance based on your specific situation, download the Belong app or join our WhatsApp community where fellow NRIs and our team discuss these decisions daily.
What Happens When You Return to India?
Your investment classification changes when you become a resident Indian. Here's what you need to know:
- NRE accounts must be redesignated as resident accounts or RFC (Resident Foreign Currency) accounts
- NRO accounts convert to regular resident savings accounts
- FCNR deposits can continue until maturity, then convert to RFC or INR
- Repatriation rights change as you're no longer an NRI
The transition period offers special RNOR status for 2-3 years, allowing certain tax benefits during your adjustment phase.
Plan your return carefully. Consider repatriating funds before returning if you want to keep them in foreign currency abroad. Read our comprehensive guide on financial checklist for NRIs returning to India.
Quick Compliance Checklist
Use this checklist to ensure your investments are properly structured:
- [ ] NRE account for foreign earnings
- [ ] NRO account for Indian income
- [ ] Bank updated about NRI status
- [ ] Property purchases documented through proper banking channels
- [ ] Annual ITR filed (even if not mandatory)
- [ ] Form 15CB documentation ready for NRO balances
- [ ] DTAA tax residency certificate obtained
- [ ] Repatriation planned across financial years if exceeding USD 1 million
For a comprehensive compliance review, use Belong's Compliance Compass tool designed specifically for NRIs.
Conclusion: The Key Takeaway
The difference between repatriable and non-repatriable investments comes down to one thing: where did the money come from?
Foreign earnings through NRE or FCNR accounts give you full freedom. Indian earnings through NRO accounts face the USD 1 million annual ceiling.
Most NRIs learn this too late. They accumulate investments without thinking about exit. Then they discover limits, documentation requirements, and tax implications when they most need their money.
Don't be that NRI.
Start with the end in mind. Structure investments based on your eventual repatriation needs. Use the right accounts. Keep documentation ready. Consider GIFT City for hassle-free investing.
At Belong, we've built our entire platform around making India investments simpler for NRIs. Our FD comparison tool, mutual fund explorer, and residential status calculator are designed to answer exactly these questions.
Have questions about your specific situation? Join our WhatsApp community where NRIs across the UAE, UK, US, and beyond share their experiences. Or download the Belong app to explore your investment options.
Your money should work as hard as you do. Don't let it get stuck.
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