NRIs Remittance Rule Change – Now Send More Money to India

What’s the new NRIs remittance rule

With the new rules for NRIs remittance, resident Indians will be able to get more money from their NRIs living abroad without having to tell the government.

The Indian government just put out new rules that let people who live in India get more money from relatives who live abroad without having to tell the authorities.

Late last week, the Indian Union Home Ministry changed the limits of the Foreign Contribution (Regulation) Act (FCRA) to Rs. 10 lacs. Before, Indians could receive only up to Rs. 1 Lakh in a year.

The ministry said in a notice that the new limit is Rs 10 Lacs (Rs.1 million), and if the amount goes over, you now have 90 days to tell the government instead of 30 days before.

As an NRI (Non-Resident Indian) residing overseas, like the UAE, you are now allowed to send more money to relatives home, without having to make a declaration, as opposed to earlier when you had to.

What has changed now?

It was earlier stated that “any person receiving NRIs remittance in excess of Rs. 1,00,000 or equivalent thereto in a financial year from any of his relatives shall inform the central government (details of foreign-originated funds) within 30 days from the receipt of such contribution”.

However, for NRIs remittance an official gazette notification on Friday revealed that for the words “one lakh rupees”, the words “ten lakh rupees” shall be substituted; and for the words “thirty days”, the words “three months” shall be substituted.

The changes also deal with the application of obtaining prior permission to receive funds from overseas. The amended rules have given individuals and organisations 45 days to declare bank account details that are to be used for the utilisation of such foreign funds. This time limit was 30 days earlier.

How does this affect an NRI?

As a Non-Resident Indian (NRI) living abroad, like in the UAE, you can now send more money to family members in India without having to make a declaration. 

The changes to the limit of NRIs remittance will make it easier for the recipient to follow the rules. No one ever talked about the FCRA laws, and most people didn’t know about them.

“It’s possible that a lot of people would have broken the law if they hadn’t known about these rules. “The good thing is that the home ministry made five more FCRA offences “compoundable,” making a total of 12 offences that can be dealt with this way instead of going after the organisations or people directly,” Jain said.

“So, if there has been a violation, it can be fixed without having to worry about direct prosecution under the new rules.” (Offenses that can be settled out of court are called “compoundable offences.” This means that the charges against the accused person can be dropped.)

How does this affect Overseas Companies?

When it comes to foreign companies sending money to bank accounts in India, the central government has also “omitted” a rule that had to do with declaring foreign funds, including information about the donors, the amount received, the date it was received, etc.

According to the most recent change to the rules, if an Indian entity receives foreign funds from a foreign corporate body, it will have to follow the current rule and post an audited statement of accounts on how the foreign contribution was received and used.

This includes a statement of income and expenses, receipts and payments account, and a balance sheet for every financial year that starts on April 1. This information must be posted on the organization’s website or on a website chosen by the government within nine months of the end of the financial year.

How does it affect Indian residents or companies?

Also, a rule that said any person or organisation in India that got money from outside the country had to say so on its official website every three months has been taken away.

People who get NRIs remittance from abroad now have 45 days to let the home ministry know if they change their bank account, name, address, etc., instead of the 15 days they had before.

The new law also says that Indian groups that get money from outside the country can’t use more than 20% of that money for administrative costs. Before 2020, this limit was 50%.

 

What other forex regulations NRIs are to know?

Foreign Exchange Management Act (FEMA) is another law put in place by the Government of India to control the flow of foreign currency across Indian borders. Anyone who has done business or travelled abroad can attest to this.

In the end, it’s important for Indians working abroad to understand FEMA rules for NRIs as well as the FCRA rules we’ve already talked about. This is because FEMA rules can affect NRIs remittance i.e. how they can send and receive money from India. Let’s look at the forex rules that NRIs must follow:

Opening bank accounts required for NRIs

This is a very important FEMA rule for NRIs to follow. Once you switch from being a resident to a Non-Resident Indian, or NRI, which means you live outside India but are still a citizen of this country, you have to go through some steps with your savings accounts.

FEMA rules say that NRIs can’t have a bank savings account. As required by the Reserve Bank of India, NRIs must open either an NRO (Non-Resident Ordinary rupee account) or an NRE (Non-Resident External) account (RBI).

Limitations in NRI investments

• NRIs can invest in an unlimited number of ways, including transactions that can be taken back home and ones that can’t. But according to the FEMA rules for NRIs, they cannot invest in small savings or provident fund programmes run by the government.
• NRIs can buy either a home or a business property in India. But it isn’t possible to buy farmland, plantations, land near a farmhouse, etc. NRIs can also get real estate as a gift from a family member or through an inheritance.
• NRIs can send foreign currency i.e. NRIs remittance, back to India if they have foreign repatriable assets, like rent from a property they own overseas that can’t be moved. FEMA rules say that NRIs can’t take the money from the sale of such assets outside of India without RBI approval.
• You can take up to Rs. 10 Lacs out of India each financial year if you inherited the property or stopped working there.

What about Students?

Students who go abroad to study are treated as NRIs and can get all the benefits of NRIs remittance that NRIs can get under FEMA. They can get up to Rs. 10 Lacs a year from their NRE or NRO accounts or from the profits from their property.

 

Keywords: NRIs remittance, remittance to India, rules of NRIs remittance