How NRIs Can Transfer Money from an NRO Account to an NRE or Foreign Bank Account: 2026 Guide

Yes. Subject to source verification and tax compliance, an eligible NRI/PIO/OCI can generally use either
of these routes:

NRO to overseas bank account: The Indian bank converts INR into a freely convertible foreign currency
and sends it through the banking channel.

NRO to NRE account: The amount is transferred in INR to an eligible NRE account. Funds in the NRE
account then carry the repatriable character of that account.

The applicable limit depends primarily on the nature and origin of the funds.

The table is a high-level guide. The original source, the account trail and the precise purpose code can
change the required route and documents.

An NRO remittance is not governed by a single form or circular. It sits at the intersection of FEMA, RBI
directions, income-tax law and the bank’s compliance procedures.

The principal legal sources include:

Foreign Exchange Management Act, 1999 (FEMA): the parent law governing foreign-exchange
transactions and the powers and duties of authorised dealers.

2. Foreign Exchange Management (Remittance of Assets) Regulations, 2016, Notification No. FEMA
13(R)/2016-RB dated 1 April 2016.

RBI Master Direction No. 13/2015-16 – Remittance of Assets, updated on 29 June 2026.

Foreign Exchange Management (Deposit) Regulations, 2016, Notification No. FEMA 5(R)/2016-RB.

Foreign Exchange Management (Deposit) (Sixth Amendment) Regulations, 2026, Notification No. FEMA
5(R)(6)/2026-RB dated 18 June 2026.

Income-tax Act, 2025, particularly the rules governing payments and tax deduction in relation to
non-residents, including sections 393 and 395 where applicable.

Income-tax Rules, 2026, Rule 220, governing information for payments to a non-resident or foreign
company through Form 145 and, in specified cases, Form 146.

An authorised dealer Category-I bank does more than execute a wire transfer. Under FEMA, the bank
must satisfy itself about the nature and bona fides of the transaction. It can ask for source documents,
tax evidence, declarations and clarifications even when the customer believes the money is already
tax-paid.

RBI’s Master Direction permits an NRI or PIO to remit eligible assets under the automatic route. For this
purpose:

An NRI is a person resident outside India who is an Indian citizen.

The FEMA definition of PIO includes an eligible OCI cardholder who is a person resident outside India.

FEMA residential status and income-tax residential status are separate tests. A person may be
non-resident under income-tax law but resident under FEMA, or vice versa, depending on the facts and
intention of stay. The bank will normally assess eligibility using FEMA and KYC records. A person who
has returned to India with an intention to stay for an uncertain period should review whether the NRO
account must be redesignated before initiating the transaction.

1. Current income

RBI recognises remittance outside India of current income such as:

• Rent from property in India
• Dividend income
• Pension
• Interest on bank deposits, bonds or other permitted investments
• Other recurring income of a similar character

Current income is generally remittable outside India after the authorised dealer is satisfied that
applicable taxes have been paid or adequately provided for. RBI’s NRO account guidance describes
current income as a permissible debit and distinguishes it from other NRO balances covered by the
USD 1 million facility.

“Freely remittable” does not mean “document-free” or “tax-free.” The bank may ask for the rent
agreement, interest certificate, dividend statement, tax deduction details, income-tax return, tax challan
or a professional certificate. If current income accumulated over several years or is mixed with capital
receipts, a year-wise reconciliation may be required.

2. Capital funds and other NRO balances

The USD 1 million facility ordinarily covers eligible amounts such as:

• Accumulated balances in an NRO account
• Sale proceeds of immovable property acquired from rupee funds or while the person was resident
in India
• Sale proceeds of shares, securities, mutual funds or other assets held on a non-repatriation basis
• Assets or money received through inheritance or legacy
• Eligible amounts arising under a qualifying settlement deed
• Maturity or surrender proceeds of insurance policies
• Provident fund or superannuation balances
• Genuine gifts or other legitimate receivables, subject to the applicable FEMA and tax rules

The classification must be based on the real source, not merely on the fact that the money currently sits
in an NRO savings account.

Under RBI’s Master Direction, an eligible NRI/PIO may remit up to USD 1 million per financial year,
subject to documentary evidence and authorised dealer satisfaction.

The following points are crucial:

• Financial year means April to March, not the calendar year.
• The limit is per eligible remitter, not a separate limit for every NRO account or every bank.
• It is an aggregate limit covering the remitter’s eligible NRO balances and other assets falling under
this facility during the year.
• Transfers from NRO to NRE and SNRR accounts are expressly included within this framework
following the June 2026 amendment.
• Where a remittance is made in instalments, RBI’s Master Direction says the instalments should be
made through the same authorised dealer.
• The bank must obtain an undertaking that the NRO balance arises from the account holder’s
legitimate receivables in India and not from borrowing or routing money from another NRO account
merely for repatriation.
• Applicable Indian taxes must be paid or provided for.
• An unused portion of the annual facility should not be treated as a transferable entitlement for a
later year; RBI prescribes an annual ceiling and does not provide a banking mechanism for carrying
forward unused capacity.
• The INR equivalent of USD 1 million depends on the exchange rate used by the authorised dealer for
the transaction. If the amount is close to the limit, obtain the bank’s calculation before finalising the
remittance.

RBI Notification No. FEMA 5(R)(6)/2026-RB dated 18 June 2026 amended the Deposit Regulations.
Among other changes, it inserted:

A permissible credit to an NRE account by transfer from an NRO account within the Regulation 4
remittance limit; and

A permissible debit from an NRO account by transfer to an NRE or SNRR account within that limit.

RBI’s Master Direction on Remittance of Assets, updated on 29 June 2026, now expressly states that the
USD 1 million facility includes transfer to NRE and SNRR accounts.

This regulatory wording is important because it places the NRO-to-NRE route clearly within the
remittance-of-assets ceiling. An NRI should not assume that an NRO-to-NRE transfer is unlimited merely
because the eventual NRE balance is freely repatriable.

Both routes can be valid. The better choice depends on what the NRI wants to do with the money.

Choose NRO to NRE when:

• You want to retain the money in India in a repatriable account.
• You may invest or spend in India but want the option to remit later.
• You want the operational convenience of an NRE account, subject to continuing eligibility.
• You do not immediately need foreign currency overseas.

Choose direct transfer to an overseas account when:

• You need the money outside India now.
• You want to avoid an additional future outward-remittance instruction.
• You have an overseas account in your own name with complete SWIFT/IBAN or routing information.
• The source is current income for which direct remittance treatment may be preferable to using the
NRO-to-NRE USD 1 million route.

A remittance to a third party’s overseas account may not be treated as simple repatriation to oneself. It
can become a separate payment, gift or current/capital account transaction. Obtain advice before using
a spouse’s, relative’s or business account as beneficiary.

1. Confirm FEMA status and update bank KYC
Ensure the account is correctly designated as NRO and that the bank has current passport, visa/residence
permit, OCI details, overseas address, PAN, email and mobile records. Dormant accounts, KYC mismatches
and an inoperative PAN can delay processing.

2. Identify and trace the exact source of funds
Prepare a source-wise reconciliation showing the date of receipt, gross amount, tax deducted, net amount
and credit into the NRO account. Avoid describing the source only as “NRO balance.” The bank and the CA
must know whether it represents rent, interest, property proceeds, inheritance, securities, a gift or another
receipt.

3. Select the correct FEMA route
Determine whether the amount is:
• Current income remittable after tax compliance;
• A capital balance covered by the USD 1 million facility;
• A repatriable investment or property amount covered by a separate route; or
• A transaction requiring prior RBI approval.

4. Choose the destination and authorised dealer
Decide between your NRE account and your overseas bank account. If remitting in multiple instalments
under the USD 1 million facility, coordinate through the same authorised dealer as required by the Master
Direction.

5. Complete the Indian tax review
The transfer itself does not ordinarily create a second tax merely because money crosses the border. Tax
arises from the underlying income or gain. Verify:
• Whether TDS was correctly deducted at source;
• Whether the actual tax liability is higher or lower than TDS;
• Whether advance tax or self-assessment tax remains payable;
• Whether an income-tax return must be filed;
• Whether capital gains, exemptions, brought-forward losses or a DTAA position affect the
computation; and
• Whether a lower/nil deduction certificate was used and complied with.

6. Determine Form 145 and Form 146 applicability
For remittances on or after 1 April 2026, use Form 145 and Form 146, where applicable. Do not use the old
Forms 15CA and 15CB merely because an old article or bank checklist still mentions them.

7. Collect source and tax documents
The exact set depends on the source. A property sale or inheritance requires far more evidence than
current-year NRO interest.

8. File the prescribed tax form before remittance
Where Form 145 applies, it is event-based and should be filed before the remittance. If Part C applies, the
taxpayer first assigns the engagement to a registered CA, the CA files Form 146 using a registered DSC,
and the Form 146 acknowledgement is used to complete Form 145 Part C.

9. Submit the bank’s remittance pack
This commonly includes the outward-remittance or NRO-to-NRE request, Form A2/purpose code, FEMA
declaration, source documents, tax evidence, Form 145 acknowledgement and Form 146 where applicable.
Banks can prescribe their own operational forms.

10. Retain the complete audit trail
Keep the bank debit advice, SWIFT message for an overseas transfer, NRE credit statement for an internal
transfer, exchange-rate advice, submitted declarations, source papers and tax forms. These records may be
required for the Indian return, an overseas tax or banking review, or a later remittance from the same
source.

For remittances made on or after 1 April 2026:

Form 145 replaces Form 15CA.
Form 146 replaces Form 15CB.
Rule 220 of the Income-tax Rules, 2026 governs their applicability.

Form 145 has four parts:

No. The official Income Tax Department guidance says Form 146 is required for Part C where the
payment is chargeable to tax, the aggregate exceeds ₹5 lakh and an Assessing Officer certificate under
section 395 has not been obtained.

For an amount that is not chargeable to tax at the remittance stage, Part D of Form 145 may apply,
subject to the exemptions in Rule 220(3). Banks may nevertheless require tax confirmation, source
certification or additional CA documentation to discharge their FEMA and tax-compliance
responsibilities. Therefore, “Form 145 and Form 146 are always mandatory” is inaccurate, but “no CA
review is needed because the money is mine” can also be unsafe.

Form 145 and Form 146 are event-based. A Form 146 used for one Form 145 cannot be reused for
another remittance. The Income Tax Department permits withdrawal within seven days in specified
circumstances, but a consumed Form 146 is linked to the corresponding Form 145.

Failure to furnish Form 145 when required, or furnishing inaccurate information, can attract a penalty of
up to ₹1 lakh under section 462 of the Income-tax Act, 2025.

Every authorised dealer has its own checklist, but the following documents are commonly requested:

• NRO-to-NRE transfer request or outward-remittance application
• Form A2 and correct RBI purpose code, where applicable
• FEMA declaration and USD 1 million facility declaration
• Undertaking regarding legitimate receivables and non-borrowed source
• PAN and current KYC documents
• Passport, visa/residence permit and OCI card, as applicable
• Overseas address proof
• Recent NRO bank statements showing the complete credit trail
• Beneficiary bank name, address, account number, SWIFT/BIC, IBAN or routing details
• Cancelled cheque or NRE account proof for an NRO-to-NRE transfer
• Form 145 acknowledgement and signed copy, where applicable
• Form 146 with UDIN and acknowledgement, where applicable
• Income-tax returns, tax computation, tax challans and TDS evidence
• TDS statement/credit evidence appearing in the taxpayer’s tax records
• Source-specific documents listed below

Do not assume that TDS appearing in the NRO account statement proves final tax compliance. TDS is a
credit against the actual tax liability; it is not always the final tax.

The bank may request older statements when the receipt was accumulated over several years. Missing
purchase documents, cash deposits or unexplained transfers between accounts are common causes of
delay.

Property transactions require a separate review because the repatriable amount may follow one of two
broad FEMA routes.

Property acquired from foreign exchange, NRE or FCNR(B) funds

Where qualifying immovable property was acquired in accordance with FEMA using foreign exchange
received through normal banking channels, NRE funds or FCNR(B) funds, repatriation may be allowed up
to the amount originally paid through the eligible route. For residential property, the facility is restricted
to not more than two such properties. The excess sale proceeds, after tax, may generally move through
the USD 1 million facility if otherwise eligible.

Property acquired as a resident, from rupee funds, or by inheritance

Sale proceeds are generally remittable through the USD 1 million per financial year facility, after source
and tax verification. There is no general requirement to wait for a fixed lock-in period merely because
the property was acquired from rupee funds, but the original acquisition and sale must comply with
FEMA.

The buyer may deduct tax on the sale consideration under the provisions applicable to payments to a
non-resident. The seller’s final tax is computed on the taxable capital gain after considering cost, eligible
expenses, exemptions and other relevant provisions. Excess TDS can generally be claimed as a refund
through the income-tax return. Where appropriate, the NRI may apply for a lower or nil deduction
certificate in Form 128 under section 395(1) before the payment, rather than waiting for a large refund.

The authorised dealer will usually want a clear reconciliation of gross sale value, TDS, tax payable, net
consideration and the amount proposed to be remitted.

RBI permits eligible inherited or legacy assets within the USD 1 million facility, supported by
documentary evidence. A qualifying settlement taking effect on the death of the settler is also recognised
in the Master Direction. A settlement without retained life interest during the settler’s lifetime may
instead be treated as a gift, requiring review under the rules applicable to the NRO balance and the
underlying transfer.

For inheritance, the bank may ask for the will, probate, succession certificate, legal-heir certificate,
death certificate, family settlement, transmission documents and proof of the deceased’s ownership.
Requirements vary by asset and state law.

A rupee gift from a resident relative and a rupee loan from a resident relative are not interchangeable.
RBI’s LRS FAQ specifically states that a qualifying rupee loan credited to an NRO account cannot be
remitted outside India. A proposed remittance sourced from a gift should be examined separately for
FEMA eligibility, donor-side LRS compliance where relevant, relationship and income-tax treatment.

Ordinarily, no. The Liberalised Remittance Scheme (LRS) is a facility for resident individuals and has a
separate USD 250,000 annual limit. An NRI remitting eligible NRO balances under the
remittance-of-assets framework is not using LRS merely because an Indian bank sends foreign
exchange.

Accordingly, the TCS provision that specifically attaches to an LRS remittance should ordinarily not apply
to a genuine NRI repatriation from NRO under the USD 1 million facility. This does not remove the
underlying income-tax liability, TDS obligations or Form 145/146 review. A transaction that is actually a
resident’s gift, loan or payment cannot be converted into an NRI repatriation merely by routing it
through an NRO account.

RBI’s automatic route is limited to USD 1 million per eligible remitter per financial year for the covered
assets. Prior RBI approval is required for a remittance exceeding the limit and may also be considered
where hardship would otherwise be caused. The application is ordinarily routed through the authorised
dealer with complete source, tax and justification documents.

Practical alternatives may include:

• Remitting up to the permitted amount in the current financial year and the balance in a later
financial year;
• Using a separate repatriation route if part of the asset was originally acquired on a repatriation
basis; or
• Applying through the authorised dealer for RBI approval where facts justify it.

Do not split or route transactions merely to conceal their aggregate value. The annual limit applies
across eligible remittances, not bank-by-bank.

• The source is described only as “savings” or “own funds” without an audit trail.
• The amount was transferred from another NRO account and the original receipt is not established.
• Cash deposits or third-party credits are unexplained.
• PAN, name, address or residential status differs across bank and tax records.
• The wrong Form 145 part was selected.
• Form 146 was prepared on an incorrect assumption about taxability or DTAA.
• The proposed remittance date has passed.
• TDS was deducted but the final tax computation or return is incomplete.
• Property purchase, inheritance or transmission documents are missing.
• Multiple instalments are being attempted through different authorised dealers.
• The overseas beneficiary is not the account holder and the transaction purpose is unclear.
• The aggregate annual USD 1 million utilisation has not been disclosed.

A pre-remittance review avoids repeated bank queries and inconsistent declarations.

Example 1: Current-year rent remitted overseas

An NRI receives ₹24 lakh of rent in an NRO account. After reconciling tenant TDS and the final Indian tax
liability, the NRI proposes to send the net amount to their own UAE bank account. As current income, it
may generally be remitted outside India without using the USD 1 million capital limit, subject to the
authorised dealer’s tax and source verification. Form 145/146 applicability must still be examined under
Rule 220 and the bank’s checklist.

Example 2: Property sale proceeds transferred to NRE

An NRI sells a property acquired while resident in India and has net tax-paid proceeds of ₹4 crore in the
NRO account. The transfer from NRO to NRE is covered by the USD 1 million annual facility. The bank
will typically require sale and purchase documents, TDS and capital-gains reconciliation, Form 145/146
as applicable, and the FEMA undertaking.

Example 3: Large inheritance

An OCI receives ₹15 crore from an inherited asset and wants to remit the entire amount. Assuming the
person and asset are eligible, up to USD 1 million may be remitted in one financial year under the
automatic route. The balance may be planned for a later financial year or an RBI approval application
may be considered.

Example 4: Jointly inherited property

Two eligible non-resident siblings inherit a property in equal shares and sell it. Each person’s
entitlement, tax liability, bank credit and remittance capacity should be documented separately. A joint
account does not automatically multiply the limit unless each remitter has a genuine, identifiable
beneficial share and independently satisfies the conditions.

NRO repatriation is usually delayed not because the law prohibits the transfer, but because the source,
tax position and bank documents do not tell one consistent story.

Our professional assistance can include:

• Determining whether the funds are current income, capital funds or separately repatriable
• Reviewing FEMA eligibility and the USD 1 million limit
• Preparing the source-of-funds reconciliation
• Computing Indian tax and reviewing TDS credits
• Advising on Form 145 and Form 146 applicability
• Issuing and filing Form 146 where legally applicable
• Supporting Form 145 filing and e-verification
• Preparing the bank document pack and FEMA declarations
• Coordinating responses to authorised dealer queries
• Handling property, inheritance, investment and accumulated-balance cases
• Advising on NRO-to-NRE versus direct overseas remittance