Repatriation of funds from India is one of those things that seems obvious until you actually try doing it.

The assumption is simple – it’s your money, so moving it abroad shouldn’t raise questions.

In practice, however, repatriation is not just a banking step; it sits at the intersection of FEMA regulations and tax compliance. That’s where confusion usually begins.

Before getting into paperwork or forms, one basic question that needs to be answered is this: where is the money held?
In most cases, everything depends on whether the funds sit in an NRE account or an NRO account.

What does “repatriation” really mean?

Repatriation simply means moving money from India to a foreign country, to the account of a non-resident.

This could involve:

• Transferring money from an Indian account to an overseas bank account
• Moving funds from an NRO account to an NRE account
• Remitting sale proceeds of property, shares, or mutual funds
• Sending rental income, interest, or dividends earned in India abroad

Although these transactions may all look like ordinary transfers, they are not treated the same under Indian regulations.

NRE vs NRO – the difference that matters

An NRE (Non-Resident External) account typically holds money earned outside India and remitted into the country. Since the source of funds is foreign, both the principal and interest are fully repatriable, and there is no RBI cap on transferring these funds abroad. Subject to routine KYC and bank checks, repatriation from an NRE account is usually smooth.

An NRO (Non-Resident Ordinary) account, on the other hand, holds Indian-source income — such as rent from property in India, sale proceeds of Indian assets, or dividends and interest received locally. Because this income arises in India, repatriation is restricted and subject to tax clearance and FEMA compliance. The RBI permits repatriation of up to USD 1 million per financial year, provided the required documentation is in place.

This difference is the single biggest reason repatriation feels easy in some cases and complicated in others.

Why repatriation from NRO accounts gets complicated

Funds in an NRO account represent income or gains earned in India. Before such money is sent abroad, Indian law requires confirmation that applicable taxes have been paid and that the remittance complies with FEMA rules.

Banks aren’t tax officers, but they can’t ignore tax either. As authorised dealers, they are expected to check that tax and regulatory requirements are in order before processing a remittance. That is why repatriation from NRO accounts almost always leads to questions and documentation requests.

When repatriation is relatively simple – and when it needs planning Repatriation is generally smoother when funds are held in an NRE account, the amounts involved are small, or the tax position is already clear and well documented. This does not mean tax is irrelevant – only that the process tends to be lighter.

Planning becomes essential when funds sit in an NRO account, the amount is significant, or the money represents sale proceeds, capital gains, or accumulated income. In such cases, repatriation is perfectly permitted, but only after tax and regulatory checks are completed.

In Summary

If you’re planning to repatriate funds, start by asking two questions: where did this money come from, and which account is it sitting in today?
Most of the confusion around repatriation clears up once those answers are clear.

What usually comes next

Once it’s clear whether funds are held in an NRE or NRO account, the next question is almost always about documentation – particularly Forms 15CA and 15CB. That paperwork, and why banks insist on it, is where most people get stuck. I’ve covered that separately in the next article.