In this article
Regulatory position reviewed as at 22 October 2026.
An NRI can repatriate eligible money from an NRO account through an authorised dealer bank, subject to the applicable FEMA rules, the source of the money, Indian tax compliance and documentary requirements.
The USD 1 million per financial year facility applies to specified NRO balances and eligible assets. It is not a universal ceiling on every remittance of current income.
Having ₹50 lakh in your NRO account does not automatically mean you can transfer ₹50 lakh abroad under any chosen remittance category.
The bank sees an account balance. FEMA asks what the money represents and which permission applies. Income-tax law asks whether the underlying receipt has been correctly treated and whether remittance reporting is required.
These questions must be answered separately.
Can you transfer money from an NRO account to a foreign bank account?
Yes. An eligible Non-Resident Indian (NRI) or Person of Indian Origin (PIO) may use the applicable remittance facility. For this purpose, the RBI definition of PIO includes an Overseas Citizen of India (OCI) cardholder who is a person resident outside India and otherwise satisfies the applicable FEMA conditions.
An NRO, or Non-Resident Ordinary, account is an Indian rupee account used by persons resident outside India for permitted Indian transactions. It commonly receives Indian rent, interest, dividends, pension payments, sale proceeds and other legitimate dues.
Unlike an NRE account, the ordinary NRO balance is not freely repatriable without examining the applicable permission.
Under the RBI framework, there are two important categories of outward remittance from an NRO account:
- Remittance of eligible current income, such as rent, interest, dividends or pension.
- Remittance of qualifying NRO balances and asset proceeds under the prescribed facility, generally subject to the USD 1 million annual limit.
A separate repatriation permission may apply to certain investments or assets originally held on a repatriation basis. Such proceeds should not automatically be treated as ordinary non-repatriable NRO balances merely because they passed through a particular account.
The relevant authority is the RBI Master Direction on Remittance of Assets, read with the applicable Deposit Regulations and asset-specific FEMA rules.
How much money can you repatriate from an NRO account?
The answer depends on the legal character of the money.
1. Remittance of current income
Current income generally includes Indian rent, dividends, pension and interest received by a non-resident.
FEMA permits remittance of eligible current income through the authorised banking system, subject to the applicable tax and documentary conditions.
The USD 1 million asset-remittance ceiling does not ordinarily operate as the ceiling for eligible current-income remittances.
For example, where an NRI receives rental income from an Indian property, the bank will need to identify the receipt as rental income and establish the applicable tax and remittance conditions.
This is different from treating the amount as unexplained savings or as proceeds from selling the property itself.
Where current income has accumulated over several years, stronger source tracing may be required, and the applicable remittance route should be confirmed from the records and the bank’s regulatory review.
2. The USD 1 million facility for eligible balances and assets
Under Regulation 4(2) of the Foreign Exchange Management (Remittance of Assets) Regulations, 2016, an eligible NRI or PIO may remit up to USD 1 million per Indian financial year through an authorised dealer in respect of specified NRO balances and eligible assets, subject to the regulatory conditions.
The relevant categories include qualifying NRO balances, sale proceeds of assets, inherited or legacy assets and certain qualifying settlement arrangements.
The Indian financial year runs from 1 April to 31 March.
The ceiling is not renewed for each bank account, each property transaction or each instalment. Multiple remittances made under the facility during the same financial year must be considered together.
The regulations also require instalments covered by the facility to be routed through the same authorised dealer.
Where the remittance is from NRO balances, the account holder must provide the required undertaking concerning legitimate receivables and the source of funds. The undertaking specifically addresses money raised through borrowing or transfers from another NRO account.
This does not make ordinary NRO-to-NRO transfers unlawful. It means that a permitted account credit and eligibility to repatriate that credit under this particular facility are separate questions.
3. What if the amount exceeds USD 1 million?
Prior RBI approval is required where the proposed remittance exceeds USD 1 million per financial year under the specified remittance-of-assets facility.
Paragraph 4.1 of the RBI Master Direction expressly requires prior approval for an NRI or PIO remitting more than USD 1 million per financial year from NRO balances, sale proceeds or assets acquired through inheritance or legacy under that route.
Regulation 7 provides for RBI consideration in specified circumstances, including qualifying remittances above the ceiling and certain hardship cases.
Approval is not automatic. An application must be supported by the relevant facts and documents, and the RBI may impose conditions.
Equally, it would be incorrect to assume that every outward transfer above USD 1 million requires this approval. A payment qualifying under a separate permission must be assessed under that permission.
Does the source of money in your NRO account change the answer?
Yes. This is often the most important factual question.
An NRO account may contain money received through several different transactions. Each receipt retains a source and legal character that can matter when it is remitted.
| Money credited to NRO | Main remittance question |
|---|---|
| Indian rent | Does it qualify for the current-income route, and what tax evidence is required? |
| Deposit interest or dividends | What proves the income and the applicable Indian tax treatment? |
| Sale of Indian property | Which asset-remittance permission applies, considering acquisition, ownership and original funding? |
| Inherited money | What establishes inheritance, entitlement and the applicable remittance permission? |
| Investment redemption | Was the investment held on a repatriation or non-repatriation basis, and what treatment applies to its proceeds? |
| Past savings and other balances | What is the original source, and does the amount satisfy the relevant remittance conditions? |
Consider property sale proceeds.
An NRI who sells an Indian property may receive the sale consideration in an NRO account. But the credit does not by itself establish that the full amount can be remitted abroad.
The applicable FEMA provision may depend on how the property was acquired, how the purchase was funded and whether it was held under a repatriable or non-repatriable route.
Indian capital gains, withholding and any applicable tax relief are separate matters. The account holder must also demonstrate entitlement to the money.
Inheritance presents another distinction. A bank credit described as inherited money does not prove succession or ownership. The entitlement must be supported by the relevant records, and the appropriate remittance permission must be identified.
The description of a bank credit is evidence of a transaction. It is not a complete legal conclusion about that transaction.
What documents are required for NRO repatriation?
The bank must be satisfied that the remittance is permitted and that the applicable conditions have been met.
There is no single document checklist that establishes eligibility for every type of NRO transfer.
The standard records generally fall into four categories.
Account holder and destination records
These may include updated KYC information, passport or OCI records where relevant, NRO account details, overseas beneficiary particulars and the bank’s prescribed outward-remittance request.
The information must be consistent with the actual account holder, FEMA residential status and permitted recipient.
Source-of-funds records
The documents should establish where the funds came from.
For rent, this may involve a rental agreement, rent receipts and bank credit records. For interest, it may involve deposit statements or interest certificates.
Property transactions may require acquisition and sale documents, payment trails and ownership records. Inherited funds may require relevant succession, transmission and asset records.
The supporting evidence depends on the transaction rather than simply on the amount.
Tax records
Depending on the nature of the funds, relevant records may include tax deduction certificates, tax payment evidence, income-tax returns, transaction computations or statutory remittance declarations.
An authorised dealer must comply with applicable Indian tax requirements. The bank may seek records needed to establish the position even when a particular income-tax form is not legally required.
FEMA declarations and undertakings
For remittances under Regulation 4(2), the prescribed conditions include evidence of acquisition or entitlement where relevant, the applicable NRO-source undertaking and the same-authorised-dealer requirement for instalments.
A bank may also request additional declarations or explanatory records as part of its risk and compliance procedures.
A bank checklist should therefore be read as an operational requirement for that transaction, not as proof that every listed item is mandated by the same statutory provision.
When do Forms 145 and 146 apply to an NRO remittance?
From 1 April 2026, Forms 145 and 146 replaced the earlier Forms 15CA and 15CB for the applicable remittance-reporting framework under the Income-tax Act, 2025 and Income-tax Rules, 2026.
But every NRO repatriation does not automatically require both forms.
Rule 220 governs information required for payments to a non-resident, other than a company, or to a foreign company.
Its operation depends on the payment, whether the sum is chargeable to Indian income tax, the applicable exclusions and, where relevant, the amount and supporting certificate.
Before selecting a Part of Form 145, first determine whether the particular remittance falls within Rule 220 at all, having regard to the nature of the payment, the remitter and the recipient.
This preliminary question is particularly important when an NRI transfers money from their own NRO account to their own overseas bank account.
Which part of Form 145 applies?
| Circumstance under Rule 220 | General reporting position |
|---|---|
| Chargeable sum, with the payment or relevant aggregate not exceeding ₹5 lakh during the tax year | Form 145, Part A |
| Chargeable sum exceeding ₹5 lakh, with the specified Assessing Officer certificate or order | Form 145, Part B |
| Chargeable sum exceeding ₹5 lakh, using the prescribed accountant’s certificate route | Form 146 supporting Form 145, Part C |
| Sum not chargeable under the Act, without an applicable Rule 220(3) exclusion | Form 145, Part D |
| Non-chargeable sum satisfying an exclusion under Rule 220(3) | No Form 145 information under that rule |
The ₹5 lakh threshold must not be interpreted as a universal threshold for every outward transfer.
A non-chargeable payment can still attract Part D reporting unless an exclusion applies. Conversely, a remittance exceeding ₹5 lakh does not automatically require Form 146 simply because of its amount.
Which remittances are excluded under Rule 220(3)?
For a sum that is not chargeable to tax under the Act, Rule 220(3) contains specified exclusions.
These include an individual remittance that does not require prior RBI approval under section 5 of FEMA read with Schedule III to the Foreign Exchange (Current Account Transaction) Rules, 2000, remittances by qualifying IFSC units, and remittances falling within the prescribed RBI purpose-code list.
The individual-remittance exception must not be treated as a general exemption for all NRO repatriations. Its exact statutory conditions must be satisfied.
One listed purpose code is S1301, covering remittances by non-residents towards family maintenance and savings.
However, the purpose-code exclusion in Rule 220(3)(c) must be read with the condition that the relevant sum is not chargeable under the Act.
A purpose code cannot be selected merely because it produces a simpler reporting outcome. It must correspond to the actual remittance.
An NRI transferring money to their own overseas account should not assume that the transaction necessarily constitutes a new taxable payment or automatically requires Form 146. Nor should it be assumed that every such transfer qualifies for the S1301 exclusion.
The legal character of the payment, the identities of remitter and recipient, the correct RBI purpose code and the applicable reporting rule must be established.
The current text is available in Rule 220 of the Income-tax Rules, 2026 and the Income Tax Department’s Form 145 FAQs.
Where Rule 220 applies, Form 145 must be furnished before the relevant outward remittance, through the prescribed electronic procedure, and submitted to the authorised dealer as required. Form 146 is relevant where the Part C certification route applies, not to every NRO transfer.
Where Rule 220 applies to a remittance made on or after 1 April 2026, the procedural reporting framework under the Income-tax Act, 2025 and Income-tax Rules, 2026 applies. The substantive tax treatment of the underlying income or transaction must still be determined under the law applicable to the relevant period.
How do you complete an NRO repatriation through your bank?
The exact interface differs between banks, but the standard process follows a logical sequence.
Step 1. Identify the funds. Establish the source, ownership, original funding route and reason for the proposed transfer. If the account contains mixed receipts, identify the relevant amounts separately.
Step 2. Identify the applicable FEMA permission. Determine whether the money is qualifying current income, eligible under the USD 1 million facility, or covered by another permitted route. Check the amount already remitted under the applicable annual facility.
Step 3. Establish the Indian tax position. Confirm the tax treatment of the underlying receipt, applicable withholding and relevant payments or records. Determine whether Rule 220 applies and, if so, whether Form 145, Form 146 or an exclusion applies.
Step 4. Prepare the bank’s documentation. Assemble the remittance request, account and beneficiary information, evidence of source, relevant tax records and prescribed undertakings. The bank may request further evidence depending on the transaction.
Step 5. Submit the outward-remittance instruction. Use the bank’s permitted online or branch process, accurately identifying the purpose of the remittance and the overseas beneficiary. Where RBI approval is necessary, that requirement must be addressed before processing.
Step 6. Retain the completed transaction record. Keep the bank acknowledgement, debit and remittance advice, related certificates and documentary evidence. These may be needed for later remittances, tax reporting or explanations in either country.
Can you transfer NRO money to an NRE account instead?
The June 2026 amendment to the FEMA Deposit Regulations expressly permits qualifying transfers from NRO to NRE or SNRR accounts within the applicable Regulation 4 limits.
This is relevant where the intended destination is another permitted NRE or SNRR account route rather than a direct transfer to an overseas bank account.
The amended SNRR framework also permits an eligible person resident outside India to maintain an SNRR account with an authorised dealer in India or its branch outside India, including in an IFSC in India, subject to the prescribed conditions.
The recipient account must still be eligible, and the source and other regulatory conditions must be satisfied. The amendment does not convert every NRO balance into freely repatriable money.
The applicable change is contained in RBI Notification FEMA 5(R)(6)/2026-RB.
Does transferring NRO money abroad create another tax liability?
The act of transferring money from an NRO account to the same person’s overseas account does not, by itself, mean that the money has become new income.
But that is different from saying that the underlying money has no Indian tax consequences.
Consider three transactions.
Rent from Indian property may have Indian income-tax consequences when it accrues or is received under the applicable law. Those obligations cannot be avoided merely by transferring the rent abroad later.
Selling an Indian property may produce a taxable capital gain. The withholding and final tax liability must be examined under the law applying to that transaction. Transferring the remaining proceeds is a separate action.
An inherited amount may raise distinct questions about ownership, receipt, subsequent income or gains, and the right to remit. The fact that money was inherited does not answer every tax or FEMA question concerning it.
The relevant income-tax period also matters. The Income-tax Act, 1961 governs the earlier periods through 31 March 2026, while the Income-tax Act, 2025 governs periods from 1 April 2026, subject to applicable transitional provisions.
A Double Taxation Avoidance Agreement may affect the taxation of particular income where its conditions are met. It does not automatically remove Indian withholding or remittance-reporting obligations.
Finally, the recipient country’s rules are separate. An NRI resident in the USA, UK, UAE or another country may have tax, disclosure or documentary obligations there. Those consequences must be determined under that country’s law with appropriately qualified local professional review.
Indian permission to transfer money does not amount to clearance under foreign-country law.
Why can one NRO account balance have different repatriation conditions?
Consider this hypothetical example.
An NRI holds ₹50 lakh in an NRO account. The amount consists of ₹9 lakh received as Indian rental income and ₹41 lakh credited from selling an Indian property.
The account statement correctly shows a combined balance of ₹50 lakh.
But the two receipts have different histories.
The ₹9 lakh must be examined as rental income, including its source, applicable Indian tax treatment and eligibility for the current-income remittance route.
The ₹41 lakh represents property sale proceeds. The analysis includes acquisition and ownership, original funding, applicable capital gains and withholding, and the FEMA route under which the proceeds may be remitted.
This example does not establish that the entire ₹50 lakh is immediately eligible for remittance. It demonstrates why the analysis should not begin and end with the available bank balance.
A bank may process a transfer only after receiving satisfactory records. That does not make the bank’s documentary process identical to the substantive income-tax or FEMA test.
The practical sequence is to establish what the money represents, which remittance permission applies and which tax and bank records are required.
Your NRO account tells you where the money is held. Its source and the applicable law determine how it may leave India.
Primary regulatory references
- RBI: Foreign Exchange Management (Remittance of Assets) Regulations, 2016, particularly Regulations 4, 7 and 8.
- RBI: Master Direction on Remittance of Assets, updated 29 June 2026.
- RBI: Foreign Exchange Management (Deposit) Regulations, 2016, amended through 29 June 2026.
- RBI: Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026.
- Income Tax Department: Income-tax Rules, 2026, Rule 220.
- Income Tax Department: Form 145 FAQs.
Educational note: This article provides general educational information on the India-side FEMA, banking and income-tax framework. It is not tax, FEMA or remittance advice for any specific transaction. The applicable position depends on the relevant period, FEMA residential status, source and ownership of funds, acquisition and investment route, tax position and supporting documents. Authorised dealer requirements may also vary according to the facts. Foreign-country tax, reporting and legal consequences require separate consideration under the law of that jurisdiction.
Sources and review
Published