Income repatriation rules relaxed for NRIs back in India
19 October 2011
Non-resident Indians who have returned to India for permanent settlement can use income and sale proceeds of assets held abroad for investments and acquisition of assets in those countries under the liberalised remittance scheme announced by the Reserve Bank of India (RBI).
The RBI has also allowed dealer banks to accept foreign exchange in all convertible currencies.
The Liberalised Remittance Scheme follows the recommendations of a committee appointed to review the facilities for individuals under the Foreign Exchange Management Act, 1999 (FEMA). The committee in its report has suggested that necessary clarifications may be issued clarifying the position that income and sale proceeds of assets held abroad by NRIs who have returned to India for permanent settlement and income and sale proceeds of assets held abroad through remittances under LRS need not be repatriated.
Accordingly, a person resident in India is free to hold, own, transfer or invest in foreign currency, foreign security or any immovable property situated outside India if such currency, security or property was acquired, held or owned by such person when he was resident outside India or inherited from a person who was resident outside India, RBI said in a notification today.
Under the Liberalised Remittance Scheme, an investor can retain and reinvest the income earned on investments made.
FEMA rules require that persons resident in India should realise and repatriate any amount of foreign exchange that is due or has accrued overseas within such period and in such manner as may be specified by the RBI.