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Capitalizing the 1 Million Dollar Scheme: Transfer of Non-Resident Funds from India to Abroad
Understanding the $1 Million Dollar Scheme for Repatriation of Funds from India to Abroad
Understanding the $1 Million Dollar Scheme for Repatriation of Funds from India to Abroad
The $1 Million Dollar Scheme, formulated by the Reserve Bank of India (RBI) under the FEMA Regulations, serves as a pivotal avenue for the repatriation of funds exclusively for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs), and Foreign Nationals. This scheme outlines a framework for the seamless transfer of Indian assets amounting to $1 million, approximately 8.3 crores in Indian rupees as of February 2024, within a given financial year. It is important to note that this scheme does not apply to Indian residents, thereby emphasizing its exclusivity to non-residents. Furthermore, any amount exceeding USD 1 million per financial year requires prior permission from the RBI for remittance.
Key Takeaways:
1. The $1 Million Dollar Scheme is designed for the repatriation of funds from India to abroad, exclusively for NRIs, PIOs, OCIs, and Foreign Nationals.
2. The scheme allows the transfer of various assets, including proceeds from the sale of securities or immovable properties, superannuation or PF benefits, maturity proceeds of insurance policies, gifts received from resident individuals, bank balance savings, and other assets held in India in accordance with FEMA, 1999.
3. No Tax Collected at Source (TCS) is applicable during the repatriation of funds under this scheme, and borrowed funds are ineligible for repatriation.
4. Repatriation of funds is exclusively facilitated through the Non-Resident Ordinary Rupee Account (NRO Account), and taxes on income earned in India must be duly paid before repatriation.
5. A comprehensive set of documents is required to initiate the repatriation process, including documentary proof of the sources of funds, FEMA Declaration and Transfer Request, Form 15CA, Form 15CB, and any other documentary proof as requested by the Authorized Dealer (AD) Bank.
Synopsis:
The $1 Million Dollar Scheme, formulated by the Reserve Bank of India (RBI) under the Foreign Exchange Management Act (FEMA) Regulations, serves as a pivotal avenue for the repatriation of funds exclusively for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs), and Foreign Nationals (referred to as “NRI/POI/OCI/Foreign Nationals”) [1] . This scheme outlines a framework for the seamless transfer of Indian assets amounting to $1 million, approximately 8.3 crores in Indian rupees as of February 2024, within a given financial year. It is important to note that this scheme does not apply to Indian residents, thereby emphasizing its exclusivity to non-residents. Furthermore, any amount exceeding USD 1 million per financial year required prior permission from the RBI for remittance.
Under this scheme, individuals falling under the purview of NRI/POI/OCI/ Foreign Nationals are granted the privilege to repatriate various assets of India which are as follows:
• Proceeds from the sale of securities or immovable properties
• Superannuation or PF benefits
• Maturity proceeds of insurance policies
• Gifts Received from Resident Individuals
• Bank Balance savings that you may have, previous income, savings in India Any other asset held in India in accordance with the provisions of FEMA,1999, or rules/regulations made thereunder.
• Beneficiaries of this scheme must consider the following points:
• No Tax Collected at Source (TCS) is applicable during the repatriation of funds under this scheme.
• Borrowed funds are ineligible for repatriation under this scheme.
• Repatriation of funds is exclusively facilitated through the Non-Resident Ordinary Rupee Account (NRO Account).
• Taxes on income earned in India must be duly paid before repatriation.
• Funds must be transferred solely to the individual’s overseas bank account, because third-party transfers are prohibited.
A comprehensive set of documents is required to initiate the repatriation process, including:
1. Documentary proof of the sources of funds and payment of applicable taxes.
2. FEMA Declaration and Transfer Request.
3. Form 15CA – Self-declaration by the remitter of funds (NRI).
4. Form 15CB – Chartered Accountant’s certificate certifying the appropriateness of taxes deducted/paid.
5. Any other documentary proof as requested by the Authorized Dealer (AD) Bank.
By adhering to the guidelines outlined within the $1 Million Dollar Scheme, NRI/PIO/OCI/Foreign Nationals can effectively leverage this scheme for the transfer of funds from India to abroad easily. This scheme not only facilitates ease of transfer but also enables the above-mentioned individuals to save the TCS implications on such remittances, ensuring compliance with optimizing the financial prospects.
FAQ
Q1: Who is eligible for the $1 Million Dollar Scheme?
A1: Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs), and Foreign Nationals are eligible for this scheme.
Q2: What are the key assets that can be repatriated under this scheme?
A2: Proceeds from the sale of securities or immovable properties, superannuation or PF benefits, maturity proceeds of insurance policies, gifts received from resident individuals, bank balance savings, and other assets held in India in accordance with FEMA, 1999.
Q3: What are the key considerations for beneficiaries of this scheme?
A3: No Tax Collected at Source (TCS) is applicable during the repatriation of funds, borrowed funds are ineligible for repatriation, and repatriation of funds is exclusively facilitated through the Non-Resident Ordinary Rupee Account (NRO Account).
Q4: What documents are required for the repatriation process?
A4: Documentary proof of the sources of funds, FEMA Declaration and Transfer Request, Form 15CA, Form 15CB, and any other documentary proof as requested by the Authorized Dealer (AD) Bank.
