Salary and Family Support Abroad: FEMA Rules on Remitting Income Out of India for Expats and NRI Relatives

When a German software architect on deputation to a Bengaluru office wants to send home the salary she earns in India, or when a Mumbai resident wishes to support an ageing parent who settled in Toronto in 2019, the same statute governs both cash flows: the Foreign Exchange Management Act, 1999 (FEMA). The Reserve Bank of India's FED Master Direction No. 8/2015-16 on Other Remittance Facilities, last updated on 6 May 2026, sets out precisely what money may leave India, in whose name, and up to what ceiling. Getting the classification wrong is not a technicality: under Section 13 of FEMA, a contravention can attract a penalty of up to three times the sum involved.

This guide separates the two flows that readers most often confuse. The first is a foreign national resident in India remitting salary earned here. The second is an Indian resident remitting funds to maintain a close relative who is a Non-Resident Indian (NRI). Both are current-account transactions, both are permitted, but they travel under different rulebooks and carry different documentation. For a quick view of your own tax position before you remit, our NRI income tax calculator models the Indian tax that must be settled first.

FEMA / DTAA Position

FEMA classifies transactions as either capital-account or current-account. Section 6 of FEMA, 1999 requires prior RBI permission for capital-account transactions unless they are specifically permitted, whereas current-account transactions are generally free unless expressly restricted under the Foreign Exchange Management (Current Account Transactions) Rules, 2000. Salary and family-maintenance remittances both fall on the current-account side, which is why they do not need a one-off RBI approval when routed through an Authorised Dealer (AD) bank.

For a foreign national who is resident in India but employed by an overseas company and posted to that company's India office on deputation, RBI's Master Direction No. 8/2015-16 permits remittance of the entire net salary earned in India, after payment of Indian taxes. The key word is "net": Indian income tax must be discharged before the balance is repatriated, and the AD bank will look for evidence of that discharge. Understanding FEMA as the gatekeeper here matters, because the same person cannot use the resident's Liberalised Remittance Scheme (LRS) route for this salary flow.

Residents remitting to maintain NRI close relatives rely on the current-account permission for family maintenance, which sits inside the resident individual's overall Liberalised Remittance Scheme envelope of USD 250,000 per financial year. The same Master Direction also permits remittances for medical treatment abroad and, separately, the carrying of foreign currency notes up to USD 3,000 per visit for travel. Schedule I of the Current Account Rules lists transactions that are prohibited outright, such as remittance of lottery winnings, so those can never be dressed up as family support.

A DTAA (Double Taxation Avoidance Agreement) does not authorise the remittance itself, but it decides how much tax India keeps before the money moves. The India-USA treaty has been in force since 12 September 1991, and the India-UAE treaty since 22 September 1993, and each fixes ceiling rates that override the domestic rate when the domestic rate is higher. The interaction of FEMA (can it move?) and the DTAA (how much tax first?) is the analytical backbone of every cross-border salary or support payment.

Tax Treatment in India

For the deputed foreign national, the salary is taxable in India under the Income Tax Act, 1961 because it is earned for services rendered in India. Under the new tax regime for FY 2025-26, income up to Rs 4,00,000 is taxed at nil, the Rs 4,00,000 to Rs 8,00,000 band at 5%, and the top slab of 30% begins above Rs 24,00,000. A Section 87A rebate of up to Rs 60,000 applies in the new regime where total income does not exceed Rs 12,00,000, and a standard deduction of Rs 75,000 is available to salaried taxpayers in that regime.

Surcharge and cess sit on top of the base tax. The surcharge is 10% for total income between Rs 50,00,000 and Rs 1,00,00,000, 15% between Rs 1,00,00,000 and Rs 2,00,00,000, and 25% above Rs 2,00,00,000 in the new regime, which caps the top surcharge at 25% rather than the 37% that once applied in the old regime. A health and education cess of 4% then applies on tax plus surcharge. The table below shows the FY 2025-26 new-regime slabs a deputed employee would face.

Where the payer is remitting income to a non-resident, Section 195 of the Income Tax Act, 1961 requires tax to be withheld at source at the rates in force under the Act or the applicable DTAA, whichever is lower. This is why a valid Tax Residency Certificate (TRC) and Form 10F matter: they unlock the treaty ceiling. Family-maintenance remittances by a resident, by contrast, are made out of income on which Indian tax has already been paid, so no fresh TDS arises on the transfer itself, though the AD bank still collects Form A2 and a self-declaration.

Tax Treatment Abroad

Once the money lands abroad, the destination country's tax system takes over, and the DTAA's foreign-tax-credit article prevents the same income being taxed twice. Under Article 24 of the India-USA treaty, effective from 12 September 1991, the United States allows its residents a credit for Indian tax paid, subject to US domestic limitations. A returning US-based recipient of Indian-source interest, for example, would face an Indian withholding ceiling of 15% under the treaty and then claim that against US liability rather than paying twice.

Treaty ceilings differ sharply by country and by income type, which is why the source of the payment must be identified before remitting. The table below compares the DTAA ceiling rates that India retains on three common income streams for three major expat destinations, drawn from the treaties in force. Note that on long-term capital gains India retains a taxing right at 12.5% under all three treaties, so gains are never "exempt" at the Indian end.

For salary, the position is cleaner: a foreign national's Indian salary is taxed in India as the source state, and the home country typically exempts it or grants a credit under the relevant treaty article, avoiding double taxation. Our foreign tax credit calculator helps estimate the credit a recipient can claim in the residence country against Indian tax already deducted. The India-UAE treaty, in force since 22 September 1993, additionally requires a UAE Tax Residency Certificate with establishment proof before its lower ceilings, such as the 10% dividend rate, can be invoked.

Repatriation Mechanics

The account architecture decides how freely funds move. An NRE (Non-Resident External) account holds foreign earnings converted to rupees and is fully and freely repatriable, principal and interest, without any per-year cap. An NRO (Non-Resident Ordinary) account holds India-source income such as rent, dividends or a pension, and balances here are repatriable only up to USD 1 million per financial year under RBI's remittance-of-assets facility, after taxes are paid and a Chartered Accountant's Form 15CB and Form 15CA are filed.

For the deputed foreign national, the net Indian salary is remitted through the AD bank on production of proof that Indian tax has been settled, and does not consume the USD 1 million NRO ceiling because it is a distinct salary-remittance permission under Master Direction No. 8/2015-16. Where such an employee also holds India-source investment income, that separate stream would route through the NRO USD 1 million window. Our repatriation calculator helps map which balances fall inside the USD 1 million cap and which sit outside it.

A resident supporting an NRI relative works from the opposite direction, sending rupees out of India that are converted to foreign currency within the USD 250,000 LRS annual limit. This flow does not touch NRE or NRO accounts at all, because the resident is not an NRI. The distinction matters because, as we explained in why the USD 250,000 LRS is not for NRIs, an NRI cannot use the resident LRS route, and a resident cannot use the NRI repatriation route.

Rental and other India-source income earned by NRIs feeds the NRO account and is subject to its own withholding before repatriation; our rental income tax calculator estimates the tax that must be cleared first. For NRIs holding Indian equities, the choice between the repatriable and non-repatriable route, covered in our note on NRI and OCI equity investment repatriation, determines whether sale proceeds can later cross the USD 1 million NRO line or move freely through an NRE-linked route. Where the relative owns Indian property, the FEMA position on buying and selling property as an NRI or OCI governs how sale proceeds enter the repatriation pipeline.

FAQ

Can a foreign national on deputation to India remit their full salary home?

Yes. Under RBI's FED Master Direction No. 8/2015-16 on Other Remittance Facilities, updated on 6 May 2026, a foreign national who is resident in India but employed by an overseas company and posted to its India office may remit the entire net salary earned in India, after payment of Indian income tax. The AD bank will require proof that Indian tax has been discharged before releasing the funds.

How much can a resident send abroad each year to support an NRI relative?

A resident individual can remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme, and family maintenance of a close relative abroad is a permitted purpose within that envelope. Medical treatment abroad is separately permitted, and a traveller may additionally carry foreign currency notes up to USD 3,000 per visit under the same Master Direction.

Is TDS deducted when I remit money abroad?

It depends on the flow. Under Section 195 of the Income Tax Act, 1961, tax is withheld on payments of India-source income to a non-resident at the Act rate or the DTAA rate, whichever is lower. Family-maintenance remittances made by a resident out of already-taxed income do not attract fresh TDS on the transfer, though Form A2 and, for NRO remittances above threshold, Forms 15CA and 15CB are required.

Are capital gains exempt under the DTAA for US or UAE residents?

No. India retains a taxing right on long-term capital gains at 12.5% under the India-USA treaty (in force since 12 September 1991) and the India-UAE treaty (in force since 22 September 1993). The gains are not "exempt" at the Indian end; the residence country then grants a foreign tax credit under the treaty's relief article.

What is the difference between NRE and NRO repatriation?

An NRE account holds foreign earnings and is fully repatriable with no annual cap on principal or interest. An NRO account holds India-source income and is repatriable only up to USD 1 million per financial year under RBI's remittance-of-assets facility, after taxes are paid and Forms 15CA and 15CB are filed by a Chartered Accountant.

Can lottery winnings be remitted as family support?

No. Schedule I of the Foreign Exchange Management (Current Account Transactions) Rules, 2000 prohibits remittance of lottery winnings outright. Such a remittance is barred regardless of the purpose stated, and cannot be reclassified as maintenance of a relative abroad.

Does the deputed employee's salary remittance use the USD 1 million NRO limit?

No. The net-salary remittance for a deputed foreign national is a distinct permission under Master Direction No. 8/2015-16 and is not counted against the USD 1 million per financial year NRO remittance-of-assets ceiling. Any separate India-source investment income the same person earns would, however, route through the NRO window.