NRI Special Episode Transfer Money Out Of India How To Do It Legally ?

Summary

In this episode of Expert PE, Dr. Chra discusses the legal intricacies of money transfer from India for NRIs and residents. Chartered accountant CA Sri Rra explains the $1 million remittance scheme for NRIs, detailing its conditions, exceptions, and documentation requirements. The conversation clarifies misconceptions about taxes and the necessity of PAN for remittances, emphasizing the importance of adhering to FEMA regulations and the role of authorized dealer banks in ensuring compliance.

Takeaways

• 📚 The video discusses legal ways for NRIs and residents to transfer money outside of India for various purposes like education, health, property, and business.
• 🏦 Chartered accountant CA Srira explains the regulations and steps for money remittance, emphasizing the importance of following legal procedures.
• 💼 NRIs have the right to remit money from India if the funds are from non-prohibited sources and taxes have been paid, but certain regulations must be followed.
• 🚫 Capital account transactions usually require prior permission from the RBI, while revenue account transactions like dividends and rental income can be remitted freely under the automatic route.
• 💵 The $1 million scheme allows NRIs to remit up to $1 million per person per year without prior RBI permission, but with certain exceptions and conditions.
• 🏠 The $1 million scheme does not apply to remittances of funds from NRE or FCNR accounts, as these are considered already outside of India for FEMA purposes.
• 🚫 The scheme cannot be used to transfer money to third parties; it is meant for transferring to one's own foreign account for personal use.
• 💼 Remittance under the $1 million scheme does not require an additional 20% tax or TCS, unlike the Liberalized Remittance Scheme for residents.
• 📄 For remittance, NRIs must have a PAN card and may need to provide documentation to the bank for due diligence, but form 15CA/CB is not required under FEMA.
• ✅ The video promises a follow-up episode to address the remittance process for resident Indians, indicating the complexity and need for guidance in this area.

Q & A

What is the main topic discussed in the video?

The main topic discussed in the video is the legal and procedural aspects of transferring money outside of India, particularly for Non-Resident Indians (NRIs) and Resident Indians.

Who is the expert being interviewed in the video?

The expert being interviewed in the video is Chartered Accountant Srira, a practicing chartered accountant who specializes in direct taxes and income tax litigations.

What are the two types of transactions mentioned in the video that affect fund remittances?

The two types of transactions mentioned are Capital Account Transactions, which involve modifications of assets or liabilities, and Revenue Account Transactions, which involve income like dividends, interest, or rental incomes.

What is the significance of the $1 million scheme for NRIs mentioned in the video?

The $1 million scheme allows NRIs to remit up to $1 million per person per year from India without requiring prior permission from the Reserve Bank of India (RBI), provided the funds are not sourced from prohibited transactions.

Does the $1 million scheme apply to both NRIs and Resident Indians?

No, the $1 million scheme is specifically for NRIs and Overseas Citizens of India. Resident Indians have a separate Liberalized Remittance Scheme with a limit of $250,000 per financial year.

Can an NRI use the $1 million scheme to transfer money to a friend outside of India?

No, the $1 million scheme is only for transferring money to the NRI's own account outside of India. Transfers to third parties do not qualify under this scheme.

Are there any tax implications when an NRI remits money under the $1 million scheme?

There is no additional tax like TCS (Tax Collected at Source) applicable for remittances under the $1 million scheme once the applicable taxes in India have been paid.

What is the role of an Authorized Dealer (AD) Banker in the remittance process?

An Authorized Dealer (AD) Banker is the bank through which an NRI can remit funds outside of India. An NRI can only use one AD Banker for remittances in a financial year.

What documents are typically required for remittances under the $1 million scheme?

Typically, forms prescribed by the RBI, declarations, and documentary evidences proving the source and purpose of remittance are required. The exact documents can vary based on the nature of the funds being remitted.

Is it necessary for an NRI to have a PAN card to remit money under the $1 million scheme?

Yes, an NRI must have a PAN card to remit money from India to outside of India under the $1 million scheme.

What is the purpose of forms 15CA and 15CB in the context of remittances?

Forms 15CA and 15CB are requirements under the Income Tax Act, not the Foreign Exchange Management Act. They are not typically required for remittances to an NRI's own account outside of India but may be requested by the banker for due diligence purposes.