FEMA & NRI Advisory
FEMA Rules for NRIs
Accounts, property, investments and repatriation under FEMA, explained and handled by Chartered Accountants.
How FEMA applies to NRIs, and what we handle
The Foreign Exchange Management Act, 1999 (FEMA) is the law that governs every cross-border money transaction in India, and it is administered by the Reserve Bank of India. For Non-Resident Indians it decides what they can hold, buy, invest in, receive and send back abroad, and it works alongside, but separately from, the Income-tax Act.
The first point to settle is residency. FEMA has its own test of who is a person resident in India, which is not the same as the income-tax day-count test, so a person can be an NRI for tax and still be treated differently under FEMA, and the reverse. Most rules then follow from that status: which bank accounts you may keep, whether you can buy a particular property, which investments are repatriable, and how much can be remitted abroad each year.
Casela Advisors helps NRIs, OCI cardholders and returning residents stay inside these rules: structuring NRE, NRO and FCNR(B) accounts, buying and selling property, investing through the Portfolio Investment Scheme, repatriating funds with Form 15CA and 15CB, and regularising past lapses through compounding.
Who this is for
Non-Resident Indians
Indian citizens who live outside India and need clarity on accounts, property, investments and repatriation.
- NRE, NRO and FCNR(B) accounts
- Property purchase and sale
- Investments and remittances
OCI Cardholders & PIOs
Persons of Indian origin who hold an OCI card or PIO status, and are treated much like NRIs for most FEMA purposes, with some differences.
- Property rules differ from NRIs in places
- Account and investment access
- Check each transaction before acting
Returning NRIs
Those who come back to India and must re-classify their accounts and assets under the residency rules.
- Convert NRE / NRO accounts
- Resident Foreign Currency (RFC) account
- Foreign assets and disclosure
What our engagement covers
Status & Structure
We confirm your FEMA residency status and set up the right accounts and holding structure before money moves.
- Residency under FEMA
- Account structuring
- Documentation checklist
Transactions
We guide property deals, investments, gifts and loans so that each transaction fits the permitted route.
- Property purchase and sale
- Investment routes
- Gifts and loans
Repatriation & Reporting
We handle the remittance paperwork and any reporting, and help regularise past lapses.
- Form 15CA and 15CB
- Bank coordination
- Compounding of contraventions
Our FEMA advisory services
Working out whether you are a person resident in India or outside India under FEMA, and what that means for each transaction.
Advice on which account to use, what can be repatriated, and how deposits and interest are treated.
Checking what an NRI or OCI can buy, funding the deal correctly, and planning the repatriation of sale proceeds.
Guidance on equity, mutual funds and other instruments, on a repatriable or non-repatriable basis, including the Portfolio Investment Scheme.
Preparing the remittance documents and the Chartered Accountant certificate that banks require for sending funds abroad.
Rules for gifts to and from relatives, loans, and inherited assets held by non-residents.
Re-classifying accounts, handling foreign assets and using the Resident Foreign Currency account on return.
Reviewing past contraventions and applying to the RBI for compounding, so that penalties are dealt with on the correct basis.
Key FEMA concepts at a glance
FEMA, 1999
FEMA replaced the older FERA and treats foreign exchange as something to manage, not prohibit.
Resident vs Non-Resident
FEMA has its own residency definition, separate from the Income-tax Act's day-count test.
NRE Account
Rupee account for foreign earnings, with funds that can generally be repatriated.
NRO Account
Rupee account for income earned in India, with repatriation subject to limits and tax.
FCNR(B) Deposit
Term deposit held in a foreign currency, without exchange rate risk to the depositor.
What NRIs Can Buy
NRIs and OCIs can generally buy residential and commercial property, but not agricultural land, plantation property or a farmhouse.
PIS and Equity
Listed shares are bought through a designated bank under the Portfolio Investment Scheme, with ceilings on holding.
Section 13 FEMA
Contraventions can attract a monetary penalty and may be compounded with the RBI.
When you need FEMA advice
Check eligibility and the funding route before you pay.
Plan the tax, the TDS and how the sale proceeds can be sent abroad.
Pick between NRE, NRO and FCNR(B), or convert when your status changes.
Repatriation needs the right account, tax proof and remittance forms.
Use the correct route so that investments stay repatriable.
Gifts and inherited assets have separate FEMA and tax treatment.
Re-classify accounts and decide what to do with assets abroad.
Take advice on regularisation and compounding before you respond.
Information and documents we usually need
Identity & Status
- Passport with visa and stamps
- PAN card
- OCI or PIO card, if held
- Overseas address proof
- Residence permit or work visa
- Travel history for the year
Account & Transaction Records
- NRE, NRO and FCNR(B) statements
- Property agreements and sale deeds
- Investment and PIS statements
- Source of funds proof
- Loan or gift documents
- Previous remittance records
Remittance & Tax
- Form 15CA and 15CB inputs
- Tax payment proof and returns
- TDS certificates
- Bank remittance instructions
- Lower deduction certificate, if any
- Past RBI or bank correspondence
Our end-to-end approach
- 01Review
We understand your residency, accounts, assets and goals.
- 02Classify
We confirm your FEMA status and the right account or route for each transaction.
- 03Structure
We plan the funding, taxes and documents so that each step is compliant.
- 04Execute
We prepare the forms and coordinate with banks and other parties.
- 05Report & Regularise
We handle any reporting and, if needed, compounding of past lapses.
Why choose us for FEMA advice
Frequently asked questions
Answers to the most common questions about FEMA rules for NRIs.
What is FEMA and why does it matter to NRIs?
FEMA is the Foreign Exchange Management Act, 1999, which regulates foreign exchange transactions in India, with the Reserve Bank of India as the regulator. It matters to NRIs because it decides which accounts they can hold, what they can buy or invest in, and how much can be sent abroad.
Who is an NRI under FEMA?
FEMA defines a person resident outside India separately from the Income-tax Act, based on the purpose and intention of the stay, and not just on a day-count. An Indian citizen who lives outside India for employment, business or similar purposes is generally treated as a non-resident. Your status should be checked for each year and each transaction.
What is the difference between NRE, NRO and FCNR(B) accounts?
An NRE account holds money earned abroad in rupees and is generally freely repatriable. An NRO account holds income earned in India, and repatriation is subject to limits and tax. An FCNR(B) account is a fixed deposit held in a foreign currency. Interest on NRE and FCNR(B) deposits is currently exempt from Indian income tax for non-residents, while interest on NRO is taxable.
Can an NRI buy property in India?
An NRI or OCI can generally buy residential and commercial property without separate RBI approval, but cannot buy agricultural land, a plantation property or a farmhouse. Such property can be inherited. Payment must go through permitted banking channels.
Can sale proceeds of property be sent abroad?
Yes, subject to conditions. The general rule is that repatriation from an NRO account is limited to USD 1 million per financial year, after taxes are paid and subject to document checks. There are additional conditions for how the property was acquired. A Chartered Accountant certificate in Form 15CB and Form 15CA are usually required.
How can an NRI invest in Indian shares and mutual funds?
NRIs invest through a designated bank account under the Portfolio Investment Scheme for listed shares, and through KYC-compliant routes for mutual funds. Investments can be made on a repatriable or non-repatriable basis, and holding limits apply to listed companies.
What are Form 15CA and Form 15CB?
They are the remittance forms under the Income-tax Act. Form 15CA is a declaration by the remitter, and Form 15CB is a certificate from a Chartered Accountant on the tax position of the payment. Banks ask for them before releasing funds abroad, depending on the nature and amount.
What happens to my accounts when I return to India?
Your status under FEMA changes when you become a resident. NRE and NRO accounts generally need to be re-designated as resident accounts, and you can use a Resident Foreign Currency (RFC) account for eligible foreign currency balances. Plan this before you return.
What is the penalty for violating FEMA?
FEMA contraventions are civil in nature. Penalties can go up to three times the sum involved, where the amount is quantifiable, with a further daily penalty for continuing contraventions. Many contraventions can be compounded by applying to the RBI.
Can past FEMA lapses be regularised?
In many cases, yes. You can voluntarily approach the RBI for compounding, which usually involves a compounding application and payment of an amount. It is best to take advice before you contact any authority.
Need clarity on FEMA rules as an NRI?
Talk to our Chartered Accountants about accounts, property, investments and repatriation, before you act.
Talk to an NRI Expert