NRE, NRO, and Getting Your Money Back Out of India

Here is the sentence that matters most in this article: the account you pay from determines what you can take out later. Not the property, not the price, not who you bought from. The funding route.

It is a decision made in week one and felt in year seven, which is why it is so often made carelessly.

The three accounts

NRE (Non-Resident External). Rupee account funded from foreign earnings. Balances and interest are freely repatriable, and interest is generally tax-free in India. This is the account for money you are bringing in from abroad and may want to take back out.

NRO (Non-Resident Ordinary). Rupee account for income arising in India — rent, dividends, a pension, proceeds from selling an Indian asset. Interest is taxable, and repatriation is subject to limits and paperwork.

FCNR (Foreign Currency Non-Resident). A term deposit held in foreign currency, insulating you from rupee movement over the deposit period. Fully repatriable. Useful as a holding place, not as a transaction account.

The rule that follows from this

If you fund a purchase from your NRE account, you are bringing foreign money into India and the proceeds are, broadly, repatriable back out later.

If you fund from NRO, or from Indian income, or from a loan taken in India, the repatriation position is more restricted and more paperwork-heavy.

There is one more route worth stating explicitly because people get it wrong: never pay in cash, and never pay a third party. Not a relative, not a “company associate,” not a collection agent. Beyond the legal exposure, irregular payments break the paper trail, and the paper trail is what makes repatriation possible. Money that entered India through channels you cannot evidence is, practically speaking, money that stays in India.

The USD 1 million limit

Repatriation from NRO balances is capped at USD 1 million per financial year, subject to documentation and tax clearance. For most individual investors this is a generous ceiling rather than a live constraint — but it is worth knowing before you assume a large exit clears in a single transfer.

There is also a simplified route for repatriating sale proceeds of residential property purchased with foreign funds, available for a limited number of properties in a lifetime. Beyond that, the annual cap applies.

Note the shape of this: residential property. Bare land is treated differently from a constructed residential unit in several parts of the FEMA framework, which is one more reason to confirm your specific position rather than generalising from a forum post.

The paperwork you must keep — permanently

This is the unglamorous core of the whole article. Repatriation years from now depends on documents you either kept or did not.

• Foreign Inward Remittance Certificate (FIRC) or equivalent bank advice for every inward transfer.
• Bank statements showing the funds moving from your NRE/NRO account to the seller.
• The registered sale deed, certified copy.
• Proof of taxes paid in India — needed for repatriation clearance and for foreign tax credit in your country of residence.
• Form 15CA / 15CB certificates when the repatriation is executed.

Scan everything. Store it somewhere that will survive a change of bank, a change of country, and a change of laptop. People lose these, and losing them is expensive in a way that is very hard to fix retrospectively.

Agricultural land: the hard boundary

NRIs and OCIs generally cannot purchase agricultural land, plantation property, or farmhouses. Inheritance and gifts from a resident Indian are the exceptions.

This is why the non-agricultural (NA) status of a Dholera plot is not a technicality — it is the difference between a permitted purchase and a prohibited one. “Conversion is in process” is not converted. Confirm NA status independently before any money moves, as covered in our verification guide.

A sensible sequence

1. Confirm your status — NRI, OCI, or foreign citizen of Indian origin — with a qualified advisor. They are not interchangeable.
2. Open or confirm the NRE account you will fund from.
3. Confirm the plot is NA and the title is clean, before transferring anything.
4. Transfer through banking channels to the seller of record only.
5. Collect the FIRC and file it with everything else.
6. Register the deed properly and obtain the certified copy.
7. Engage a CA who handles NRI transactions, at this stage rather than at exit.

What to ask a professional

You want a chartered accountant with actual NRI transaction experience, not general practice. Useful questions:

• Given my residency status and country, what is my repatriation position on this specific purchase?
• What documentation do you need me to retain from day one?
• Should I apply for a lower-deduction certificate ahead of any future sale, and when?
• How does my country’s DTAA with India treat this?

The tax side of the exit is covered in our companion piece on TDS and capital gains, and the NRI guide has the eligibility basics. If you want a second opinion on how a specific transaction is being structured for you, ask us — we do not sell land, and we would rather you asked before the money moved than after.