An individual can remit up to $1 million from an NRO account in a financial year. The remittance can be done all at once or across multiple increments. But, you need a chartered accountant to certify that the repatriated amount is taxed.
A Brief on NRO Accounts
An NRO account could be recurring or fixed, current, or saving. The Reserve Bank of India updates the guidelines and interests applicable to these accounts. These updates are communicated through newspapers as well as on the RBI website.
Repatriating from NRO Accounts
An NRI/PIO can remit up to $1 million in a financial year. These remittances include your NRO account remittances and sale proceeds of your assets. Proceeds from inherited assets are also included in the $1 million annual remittance limit. For this article, we will focus on outward remittance from NRO accounts.
For outward remittances, the remitter should provide the necessary documents that prove the source of the funds. A chartered accountant should also certify the documents in a prescribed format.
Outward Remittance from NRO Balance
For all outward remittances from your NRO balance, the Authorized Dealer Bank (AD) will ask you for an undertaking.
The undertaking tells the bank that the money to be transferred is from a legitimate source. It also confirms that the remitter is remitting his or her own money and has not borrowed from outside sources.
You cannot transfer money from another NRO account for such remittances.
The Indian income-tax law stipulates that the remitter should submit Form 15CA and Form 15CB on the income tax department website. Form 15CB should have a chartered accountant’s attestation.
Penalty Under FEMA
The government can penalize you under the Foreign Exchange Management Act if you have breached the AD undertaking.
The penalty for contraventions is three times the amount of the dubious transaction. If the amount cannot be ascertained, then the penalty is ₹200,000. For persistent transactions, the authorities can penalize up to ₹5,000 per day from the first day of the breach.
Penalty for Failure to File Forms 15CA and 15CB
If you fail to submit Income Tax Forms 15CA and 15CB for an outward remittance, the assessing income tax officer may ask you to pay up to ₹1 lakh in fines.
