Transfer of Funds From India to UAE

Transfer of Funds From India to UAE: Globally, most countries employ foreign exchange controls to check both the outflow and inflow of currency from one place to another. As such, in India, the Foreign Exchange Management Act (FEMA) of 1999 and the Directions issued by the Reserve Bank of India are the foreign currency controls. So if you are residing in the UAE and a non-resident of India willing to transfer funds from India, this article can help you with it. There is no need for prior approvals from authorities except for the ones being listed in this article. The current article gives you a glimpse about the regulatory procedures for remitting funds from India to the United Arab Emirates.

Fund remittance from NRO accounts

As per Regulation 3.2(i) of the FEMA (Remittance of Assets) Regulations of 2016, the Indian government allows remittance of up to USD 1 million a financial year from an NRO’s account. The individuals are expected to submit Form 15 CA and 15CB for remittance from an NRO account. This is to ensure that any tax liability on the funds is extinguished before remittance. This is to make sure such tax liabilities are eased as Indian authorities would find it challenging to pursue tax liabilities if the funds are transferred abroad. Form 15 CA deals with the undertaking by the individual to remit funds. At the same time, 15CB is the certification of such undertaking by an authorized chartered accountant. The disclosures in both forms are the same. In case of the remittance amount being lesser than 15 lakhs, Form 15 CB is not required.

One can submit Form 15CA online at the Indian Tax Information Network Website (www.tin-nsdl.com). The individual will be provided with an acknowledgment of submission and is expected to retain that as it would be needed constantly. Upon submission of the Form 15CA, the individual appointed Chartered Accountant must fill in Form 15CB, certifying that all tax liabilities are fulfilled. The nature of funds to be remitted, which may be through interest, dividends, proceeds of the sale, etc., is also specified in the form. In this stage, the Chartered Accountant makes sure if the individual falls under any Double Taxation Avoidance Agreement. A Double Taxation Avoidance Agreement allows individuals to come under a lower tax slab and is deducted from the money to be remitted. The general rate that applies is 30%. Even though the procedure is online, it is difficult to do so from outside India as form filling and filing requires consultations with Chartered Accountants along with signature of the individual in the hard copies of the Forms.

Remittance proceedings from a property sale

The Regulation 4(2) of the FEMA (Remittance of Assets) Regulations, 2016 allows individuals to remit amounts as far as USD 1 million from the sale of properties inherited through succession. The following procedures mentioned above should be followed. In case of a property purchased by the NRI earlier and being disposed now, the Regulation 5(A) of the FEMA (Acquisition and Transfer of Immovable Property in India) Regulations, 2000 applies, which requires the following conditions to be met.

• The individual should have acquired the property in par with the foreign exchange law in force at the time of acquisition or the provisions of these regulations
• The repatriated amount should not exceed

1. The amount paid during acquisition in foreign exchange and paid through normal banking channels
2. Amount paid from funds in foreign currency Non-Resident Account
3. Equivalent to foreign currency as on the date of payment and made from the funds held in Non-Resident External account for the acquisition of the property

• The repatriation of sale proceeds is restricted to two in the case of residential properties.

The NRI is also expected to seek approval from the RBI before remitting any proceeds from India’s sale of purchased properties.

Money Remittance by Foreigners who are not NRIs/PIOs

In case the individuals remitting money out of India are not Non-Resident Indian or a Person of Indian Origin, only a particular class of foreigners are allowed to remit funds outside India as of Regulation 4 of the FEMA (Remittance of Assets) Regulations, 2016. Such individuals should be

• retired personnel from employment in India

(or)

• has inherited property in India

(or)

• a non-resident widow/widower who has inherited assets from the deceased spouse, who was an Indian citizen

Even then, the remittance by such individuals should not exceed USD 1 million. This is not limited to sale proceeds of assets held on a repatriation basis. In case of remittance in installments, it should be routed through the same bank that carries the first remittance.

Conclusion

The Foreign Exchange Controls in India monitors the inflow and outflow of funds leading to the tedious process of fund remittance outside India. The assistance of those with knowledge in the relevant procedure and regulations is often required. In recent days almost all nations are concerned about the funds leaving their country compared to fund inflow. Hence it is always advisable for individuals to take help from qualified professionals to navigate through the regulatory processes in case of fund transfer across countries.

Originally posted 2021-09-29 05:49:16.