The 1 Million Dollar Scheme for NRI

The 1 Million Dollar Scheme: Transfer of Non-Resident Funds from India Abroad

In today's globalized world, the financial mobility of assets across borders is a critical aspect of wealth management for Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), Overseas Citizens of India (OCIs), and Foreign Nationals. Recognizing this need, the Reserve Bank of India (RBI) has established a crucial framework under the Foreign Exchange Management Act (FEMA) Regulations—known as the $1 Million Dollar Scheme. This scheme facilitates the repatriation of funds from India abroad, providing a substantial avenue for managing assets held within Indian territories.

The $1 Million Dollar Scheme, formulated by the RBI under the FEMA Regulations, serves as a vital avenue for the repatriation of funds exclusively for NRIs, PIOs, OCIs, and Foreign Nationals. This scheme allows for the seamless transfer of Indian assets amounting to $1 million, approximately ₹8.344 crores as of May 2024, within a given financial year. It is important to note that this scheme does not apply to Indian residents, thereby emphasizing its exclusivity to non-residents. Any amount exceeding $1 million per financial year requires prior permission from the RBI for remittance.

Under this scheme, individuals categorized as NRI/PIO/OCI/Foreign Nationals are granted the privilege to repatriate various assets from India, including:

- Proceeds from the sale of securities or immovable properties

- Superannuation or Provident Fund (PF) benefits

- Maturity proceeds of insurance policies

- Gifts received from resident individuals

- Bank balance savings, previous income, or savings in India

- Any other asset held in India in accordance with FEMA, 1999, or rules/regulations made thereunder

Beneficiaries of this scheme must consider the following points:

- No Tax Collected at Source (TCS) is applicable during the repatriation of funds under this scheme. 

- Borrowed funds are ineligible for repatriation under this scheme.

- Repatriation of funds is exclusively facilitated through the Non-Resident Ordinary Rupee Account (NRO Account).

- Taxes on income earned in India must be duly paid before repatriation.

- Funds must be transferred solely to the individual’s overseas bank account, as third-party transfers are prohibited.

A comprehensive set of documents is required to initiate the repatriation process, including:

1. Documentary proof of the sources of funds and payment of applicable taxes.

2. FEMA Declaration and Transfer Request.

3. Form 15CA – Self-declaration by the remitter of funds (NRI).

4. Form 15CB – Chartered Accountant’s certificate certifying the appropriateness of taxes deducted/paid.

5. Any other documentary proof as requested by the Authorized Dealer (AD) Bank.

By adhering to the guidelines outlined within the $1 Million Dollar Scheme, NRI/PIO/OCI/Foreign Nationals can effectively leverage this scheme for the transfer of funds from India abroad. This scheme not only facilitates ease of transfer but also enables the above-mentioned individuals to save on TCS implications on such remittances, ensuring compliance while optimizing their financial prospects.