The $1 Million Scheme: A Guide for NRIs to Repatriate Funds from India

As an NRI (Non-Resident Indian), one common concern is how to repatriate money from India to their destination abroad. Read our article on the LRS (Liberalised Remittance Scheme) for resident Indians, in this article we will explore the $1 Million Scheme specifically designed by RBI (Reserve Bank of India) under FEMA (Foreign Exchange Management Act) regulations, allowing NRIs, OCIs (Overseas Citizens of India), PIOs (Persons of Indian Origin), and foreign nationals to remit assets situated in India outside of the country.

Understanding the $1 Million Scheme

The $1 Million Scheme permits NRIs and other eligible individuals to remit up to $1 million in a financial year (April to March) outside of India. The term "assets" in this context includes various types of funds and holdings, such as bank deposits, non-resident ordinary accounts, provident fund accumulations, superannuation fund accumulations, maturity proceeds of insurance policies, sale proceeds of shares, mutual funds, immovable properties, and more.

Who can Utilize the Scheme?

The $1 Million Scheme is exclusively available for NRIs, OCIs, PIOs, and foreign nationals under FEMA. Resident Indians are NOT eligible to use this scheme.

Types of Assets Eligible for Repatriation

Any assets that were accumulated by the individual while residing in India can be considered for repatriation under this scheme. However, there are certain restrictions, such as the prohibition on repatriating lottery winnings, windfall gains, or agricultural/plantation property bought while being an NRI.

Restrictions on Borrowed Funds

Funds obtained as loans from Indian residents cannot be repatriated under this scheme. Only the individual's own funds, accumulated through legal means, can be remitted.

Gifts Received by NRIs

NRIs can repatriate funds received as gifts from specified relatives (as defined under the Companies Act) in India. Such funds held in the NRO account can be repatriated without any restrictions under FEMA.

NRIs Accounts (NRE/FCNR)

Funds held in NRE (Non-Resident External) or FCNR (Foreign Currency Non-Resident) accounts can be freely repatriated without any limit. These accounts are considered external accounts, and their funds can be repatriated whenever needed, separate from the $1 million scheme.

Tax Implications

Unlike the LRS scheme, the $1 Million Scheme does not attract Tax Collected at Source (TCS). The only charges that may apply are bank charges for processing the transaction.

Documentation and Process

To repatriate funds under the $1 Million Scheme, individuals need to approach an Authorized Dealer (AD) banker, which can be a bank or an exchange house. The following documentation is generally required:

• Specific forms under FEMA as per the nature of remittance.

• A declaration stating that the funds being transferred are the individual's own funds and not prohibited under FEMA.

• Forms 15CA and 15CB may be applicable, depending on the nature and amount of the remittance.

Conclusion

The $1 Million Scheme offers NRIs and eligible individuals a straightforward way to repatriate up to $1 million annually from India to their destination abroad. By adhering to the required documentation and following the guidelines, NRIs can efficiently transfer their assets and fulfill their financial needs outside of India. Remember to seek professional advice or consult a Chartered Accountant for a smooth and hassle-free process.