Repatriating Money From an NRO Account: The USD 1 Million Rule and the CA Certificate

For a non-resident Indian, the single most misunderstood figure in cross-border money movement is USD 1 million. Under the Reserve Bank of India's Master Circular on Remittance Facilities for Non-Resident Indians, an NRI or Person of Indian Origin may remit up to USD 1,000,000 per financial year out of the balances held in a Non-Resident Ordinary (NRO) account and the sale proceeds of assets situated in India, including inherited or legacy assets, for all bona fide purposes (rbi.org.in). The rule sounds simple until it meets Section 195 of the Income-tax Act, 1961, the Form 15CA/15CB certification, and the double taxation treaties India signed with the United States (in force from 12 September 1991) and the United Arab Emirates (in force from 22 September 1993). This guide walks through how those four pieces fit together so a remittance clears the Authorised Dealer bank on the first attempt.

FEMA / DTAA Position

The Foreign Exchange Management Act, 1999 came into force on 1 June 2000 and governs every rupee an NRI moves out of India. Under Section 6 of FEMA, a capital account transaction requires the RBI's general or specific permission, and the USD 1 million window is precisely that general permission applied to NRO balances and asset-sale proceeds (indiacode.nic.in). Anything outside a specifically permitted class still needs the RBI's prior approval, which is why the FEMA framework treats the USD 1 million facility as a ceiling, not an entitlement to be exceeded.

A crucial distinction runs through the RBI Master Circular: current income is not counted inside the USD 1 million cap. Rent, dividend, pension and interest earned in India are treated as current income and are freely remittable, over and above the USD 1 million capital component, once the applicable tax has been paid. So an NRI drawing rent of Rs 6 lakh a year from a Mumbai flat can repatriate that rent separately, while the eventual sale proceeds of the flat draw down the USD 1 million annual allowance.

On the treaty side, the position that trips up most remitters is capital gains. A Double Taxation Avoidance Agreement does not make Indian capital gains disappear: under the India-USA treaty India retains the right to tax gains on Indian assets, and the domestic long-term rate is 12.5% after 23 July 2024, never "exempt". The DTAA only relieves the same income from being taxed twice by allowing a credit in the country of residence, a point the treaty text makes explicit in Article 24 for United States residents.

Tax Treatment in India

Every remittance out of an NRO account is a payment to a non-resident, so it is caught by Section 195 of the Income-tax Act, 1961. Section 195 requires the payer to withhold tax either at the rate in force under the Act or at the applicable DTAA rate, whichever is lower (incometax.gov.in). The TDS is deducted before the money leaves, which is exactly why the paperwork below matters: it is the mechanism through which the bank satisfies itself that Indian tax has been settled.

For the capital component, the headline rate depends on the asset and its holding period. Long-term gains on immovable property and gold are taxed at 12.5% without indexation for acquisitions on or after 23 July 2024, while assets bought before that date are grandfathered and may instead be taxed at 20% with indexation, whichever is lower for the taxpayer. Listed equity follows a separate track: LTCG on equity is 12.5% above an annual exemption of Rs 1,25,000, and short-term equity gains are taxed at 20%, both effective from Budget 2024.

On top of the base tax sit surcharge and cess, and the numbers can be material on a large asset sale. Surcharge runs at 10% of tax for income between Rs 50 lakh and Rs 1 crore, 15% between Rs 1 crore and Rs 2 crore, and 25% between Rs 2 crore and Rs 5 crore; in the new regime the surcharge is capped at 25% even above Rs 5 crore. A health and education cess of 4% then applies on tax plus surcharge, so a headline 12.5% property-gain rate becomes 13% after cess before any surcharge is added.

The rate can be pulled down to the treaty cap, but only with the right documents. To claim the beneficial DTAA rate, the NRI must furnish a valid Tax Residency Certificate from the country of residence and file Form 10F, as required to invoke the treaty under Section 90(4) of the Act. The table below shows the treaty ceilings the bank will apply once the TRC and Form 10F are on file.

Note the third row: neither treaty exempts capital gains. The India-USA agreement (Article 10) charges portfolio dividends at 25% and drops to 15% only where the recipient holds at least 10% of the voting stock, while the India-UAE agreement caps dividends at 10% but still leaves gains on shares of an Indian company taxable in India. To estimate the net rupee position on a specific sale, the NRI tax calculator applies these slabs, surcharge and cess in sequence.

Tax Treatment Abroad

The second layer of tax lands in the country of residence, and this is where the DTAA earns its keep. Because India has already taxed the gain, the treaty obliges the residence country to give a foreign tax credit for the Indian tax paid: for United States residents this is spelled out in Article 24 of the 1991 treaty, which lets the Indian tax offset the US liability on the same income. The credit is a credit, not a refund, so it can only reduce the residence-country tax down to zero, never below it.

The practical outcome depends heavily on where the NRI lives. A United States resident who pays 12.5% Indian long-term capital gains tax and faces a higher US federal rate claims the Indian tax as a credit and tops up the difference to the IRS, so the total burden equals the higher of the two rates. A United Kingdom resident uses Foreign Tax Credit Relief to the same effect, again capped at the UK liability on that slice of gain.

The Gulf picture is different because there is no personal income tax to credit against. A UAE-resident NRI who pays 12.5% in India has no second charge in the Emirates, but the treaty benefit still requires a UAE Tax Residency Certificate, and the RBI Master Circular's TRC condition (with establishment proof) is what unlocks the lower Indian withholding in the first place. For the deposit and rental side of the picture, our rental income tax calculator models the Indian tax that a resident abroad must then feed into a foreign credit claim.

Repatriation Mechanics

The account you hold the money in decides how freely it moves, so the first mechanical choice is NRO versus NRE versus FCNR. Balances in a Non-Resident External (NRE) account and a Foreign Currency Non-Resident (FCNR) deposit are fully and freely repatriable, principal and interest, without touching the USD 1 million cap. The NRO account, by contrast, holds India-sourced income and is the account the USD 1 million per financial year facility exists to unlock. Our NRE vs NRO vs FCNR comparison sets out the tenure and tax differences in full.

The certification is the heart of the process. Every NRO remittance requires an undertaking from the remitter (Form 15CA) together with a Chartered Accountant's certificate (Form 15CB) in the format prescribed by the CBDT, and this pairing is the practical basis of the Form 15CA/15CB regime that Authorised Dealer banks demand today (incometax.gov.in). The Form 15CA/15CB certificate is where the CA confirms the nature of the payment and that the correct tax has been withheld under Section 195.

Where the money represents inherited or legacy assets, an extra evidentiary step applies. The RBI Master Circular requires the remitter to produce documentary evidence of the inheritance or legacy to the Authorised Dealer before the sale proceeds can be remitted within the USD 1 million limit, alongside the standard 15CA/15CB. In practice this means a will, succession certificate or legal heir certificate must be shown for a legacy property sold in, say, the 2026-27 financial year.

The table below summarises which flows draw down the USD 1 million allowance and which sit outside it.

A worked sequence keeps it concrete. An NRI selling a Bengaluru flat for Rs 3 crore in FY 2026-27 first pays 12.5% long-term capital gains tax (plus surcharge and 4% cess) on the gain, then obtains a Form 15CB from a Chartered Accountant, files Form 15CA online, and instructs the bank to remit up to the USD 1 million equivalent; any balance above that dollar ceiling waits for the next financial year. To model the dollar conversion and the tax drag on a specific corpus, the repatriation calculator runs the arithmetic end to end. Readers weighing whether to move money the other way should compare this with the resident LRS route of USD 250,000 a year, which is a different scheme with its own ceiling.

FAQ

What is the USD 1 million NRO repatriation limit?

It is the ceiling, set by the RBI Master Circular on Remittance Facilities for Non-Resident Indians, on how much an NRI or PIO may remit abroad from NRO balances and Indian asset-sale proceeds in a single financial year: USD 1,000,000, for all bona fide purposes (rbi.org.in). It resets each financial year on 1 April.

Does the USD 1 million limit include my rent and dividends?

No. Current income such as rent, dividend, pension and interest is freely repatriable and sits over and above the USD 1 million capital component, provided the applicable Indian tax has been paid. Only capital flows such as property or share-sale proceeds draw down the USD 1 million allowance.

Are Form 15CA and Form 15CB always required?

For a taxable remittance out of an NRO account, yes: the remitter files an undertaking in Form 15CA and a Chartered Accountant certifies the tax position in Form 15CB, in the CBDT-prescribed format (incometax.gov.in). The CA certificate confirms that tax has been withheld under Section 195 of the Income-tax Act, 1961.

Is capital gains tax exempt for NRIs under a DTAA?

No. India retains the right to tax capital gains on Indian assets even under its treaties, and the domestic long-term rate is 12.5% after 23 July 2024. The DTAA relieves double taxation only by allowing a credit in the country of residence, for example under Article 24 of the India-USA treaty.

How do I get the lower DTAA withholding rate on NRO interest?

Furnish a valid Tax Residency Certificate from your country of residence and file Form 10F, as required under Section 90(4) of the Income-tax Act, 1961. With those in place the bank applies the treaty cap, which is 15% for interest under the India-USA DTAA and 12.5% under the India-UAE DTAA, instead of the higher domestic rate.

Can I repatriate proceeds from an inherited property?

Yes, within the USD 1 million per financial year limit, but you must produce documentary evidence of the inheritance or legacy, such as a will or succession certificate, to the Authorised Dealer bank alongside Form 15CA and Form 15CB, as the RBI Master Circular requires.

What if my remittance exceeds USD 1 million in a year?

Amounts above USD 1,000,000 in a financial year from NRO balances require the RBI's specific approval under Section 6 of FEMA, 1999; in practice most NRIs stagger a large sale across two or more financial years so each tranche stays inside the annual USD 1 million facility.