1. How to remit NRO account funds abroad
DEEPA VENKATRAGHVAN
It's common knowledge now that the Government of India allows you to
remit funds up to USD 1 million per financial year abroad. But how exactly
do you go about doing it? What are the documents you need to submit?
Can you do it from abroad? Let's take a look.
Remittance regulations, a review
As part of its liberalization scheme, the Reserve Bank of India has over a
period of time made it easier for NRIs to remit funds from India to abroad.
As of today, balances in the NRE account are freely repatriable. That is, you
do not need any permission for remittance abroad for any amount. Broadly,
the funds in this account are usually funds deposited from abroad or in
some cases, current income like interest or dividends on investments made
through foreign funds.
Balances in the NRO account are not freely repatriable. But the RBI does
allow NRIs to remit up to USD 1 million per financial year from the NRO
account, provided you follow certain procedure. The funds in NRO account
are usually from income earned locally, like rent on a property in India or
certain capital account transactions like sale of property purchased prior to
becoming an NRI.
Remittance procedure
In order to remit funds from the NRO account, you would need to submit
two documents: Form 15 CA and Form 15 CB. The purpose of both these
documents is to ensure that taxes are collected on the funds before they
are remitted abroad as it becomes difficult to recover taxes at a later
stage. Both these forms consist of more or less the same information. The
only difference is that Form 15CA is an undertaking by the NRI to remit
funds while Form 15 CB is a certification of the information by a chartered
accountant. Here is the process:
Step 1: Submit Form 15 CA - Undertaking of information
You need to submit this form online on the website of the Tax Information
Network www.tin-nsdl.com . This form will consist of the remitter's

2. information such as name and address of the NRI, permanent account
number, complete details of the overseas account to which funds are being
remitted etc. It will also contain details of the accountant who will be
certifying Form 15 CB.
"After you submit Form 15 CA online, you will get an acknowledgement.
You would need to print the acknowledgment, sign it and submit it along
with Form 15 CB to the bank," explains Sandeep Shanbhag, Director
of Wonderland Investments and an expert on all NRI financial matters.
Access: Form 15 CA
Step 2: Submit Form 15 CB - chartered accountant's certificate
You need to get this certificate from a chartered accountant who will
certify that you have paid all taxes due in India on the funds that you plan
to remit abroad. The certificate will specify the nature of the amount to be
remitted: that is, whether it is the remittance of dividends, interest,
royalties received in India or any other income. Your chartered accountant
may require you to submit copies of your Tax Residency Certificate, if any,
in case you are availing a lower rate of TDS under the Double Taxation
Avoidance Agreement.
Download: Form 15 CB
Important points
Can you do this from abroad? "Technically, it is possible to do this from
abroad because the procedure is online. But it may be a bit difficult to do
it, practically. Your chartered accountant would have to send you the hard
copy of Form 15 CB. You would need to sign the acknowledgment of Form
15 CA and then send both these documents to the bank's branch in India,"
Shanbhag says.
If your remittance consists of interest from the NRO deposit, the bank is
required to deduct tax at source on the interest at the rate of 30%.
Suppose you live in the US or UK or any other country that has a DTAA with
India, then you are eligible for a reduced TDS rate of 15%. The bank will
require you to submit a Tax Residency Certificate from your country of
residence if you want to avail of this reduced rate.

3. Now there is a peculiar scenario of DTAAs that India has signed with
countries that do not have personal tax. Shanbhag explains, "The basis of
a DTAA is that a particular income is taxed in both countries. However
there are instances where a foreign country may not levy personal tax on
its residents, yet India has a DTAA with those countries that allows NRIs of
those countries to avail a reduced rate of TDS. This is a grey area."
In such cases, each bank might have its own way of handling this. Some
banks like the State Bank of Indiarequire you to submit a self-declaration
form if you reside in a country that has zero tax, but has a DTAA with India
that offers a lower rate of TDS. On submitting this self declaration, the
bank will deduct tax at source at the reduced rate instead of the mandated
30% rate.
The declaration however states that the NRI 'shall be fully responsible to
State Bank of India for any Indian Income tax liability including interest,
penalty etc. that may arise on account of the bank applying a lower rate for
tax deduction at source based on this declaration.'
You would therefore need to check with your bank to see what procedure
is followed.