Are you looking to transfer funds from your Indian accounts to support your life abroad or manage global investments?
Outward remittance from India allows you to send money internationally through authorized banking channels. As an NRI, you can remit up to USD one million per financial year from your Non-Resident Ordinary (NRO) accounts. This provides you with considerable flexibility when managing finances across borders, whether you're supporting family, funding education, or handling business obligations abroad.
Understanding outward remittance regulations is essential for managing your cross-border finances effectively. The rules vary based on your account type, transfer purpose, and documentation requirements.
This article explains what you need to know about outward remittance from India in 2025, covering definitions, regulatory requirements, and documentation needed for your international money transfers.
What is Outward Remittance from India?
Outward remittance is the process of sending money from India to foreign countries through authorized banking channels. When you transfer funds from an Indian bank account to an overseas account, you're making an outward remittance.
The Reserve Bank of India (RBI) governs these transfers under India's foreign exchange regulations. The Liberalized Remittance Scheme (LRS) provides the primary framework for these transactions, allowing residents to transfer up to USD 250,000 per financial year for various approved purposes.
As an NRI, you have higher remittance limits. You can send up to USD one million annually from your NRO accounts, subject to proper documentation and compliance requirements.
Note: This USD one million NRO repatriation limit is separate from the LRS limit and requires specified documentation and tax confirmation.
Why NRIs Need Outward Remittance
Managing finances across borders requires the ability to move money from your Indian accounts to your country of residence. Outward remittance serves several essential purposes for NRIs with ongoing financial connections to India.
Property sale proceeds can also be repatriated up to USD 1 million annually, with required compliance and approvals for amounts beyond that. Students abroad benefit from receiving up to USD 250,000 per resident sender per year from relatives in India under the Liberalized Remittance Scheme for maintenance and education expenses.
Your account type determines remittance flexibility:
- NRE Accounts: Allow complete repatriation with no restrictions on the amount, provided the funds are sourced from abroad.
- NRO Accounts: Permit transfers up to USD 1 million annually with proper tax clearance and documentation.
Common reasons NRIs use outward remittance include:
- Supporting business operations in their country of residence
- Managing international investments
- Covering healthcare expenses abroad
- Funding education for family members
All outward remittances require purpose declaration and proper documentation. You'll need to work with RBI-authorized dealers or banks to process these transactions legally.
Key RBI Regulations for Outward Remittance from India
- Regulatory Framework:
- Governed by the Foreign Exchange Management Act (FEMA), effective June 1, 2000.
- RBI oversees foreign exchange through specific guidelines.
- Liberalized Remittance Scheme (LRS):
- Resident individuals can remit up to USD 250,000 per financial year for approved purposes (education, travel, investments, medical treatment, etc.).
- Resident individuals can remit up to USD 250,000 per financial year for approved purposes (education, travel, investments, medical treatment, etc.).
- NRI Remittance Limits:
- NRIs can remit up to USD 1 million per financial year from NRO accounts with required documentation and tax compliance.
- This limit is separate from LRS and governed under RBI’s Non-Resident Account Master Directions.
- Documentation Required:
- Remitter's undertaking.
- Chartered Accountant’s certificate as per Central Board of Direct Taxes formats (Form 15CB).
- Purpose declaration and taxable compliance forms (e.g., Form 15CA).
- Prohibited Transactions:
- Remittances for lottery tickets, banned magazines, and speculative foreign currency trading are strictly disallowed.
- RBI has tightened rules to prevent passive wealth shifting via foreign currency deposits with lock-in periods.
- Tax Collected at Source (TCS) on Outward Remittance (Effective 2025):
- No TCS on education remittances up to ₹7 lakh financed by loans; 0.5% above this amount.
- 5% TCS on education or medical treatment remittances exceeding ₹7 lakh not financed by loans.
- 20% TCS on all other remittance purposes exceeding ₹7 lakh per financial year.
- Authorized Dealers:
- All remittances must be routed via RBI-authorized financial institutions (Authorized Dealers).
- Special Provisions:
- NRIs inheriting assets or retired from Indian employment can remit up to USD 1 million annually with proper documentation and compliance.
Required Documents for Outward Remittance
Proper documentation forms the foundation of successful outward remittance from India. The specific documents you need depend on your account type, transfer purpose, and source of funds.
Essential documents for all outward remittances include your Permanent Account Number (PAN), which is mandatory for all transactions under the Liberalized Remittance Scheme. If you don't have a PAN, you must submit Form 60.
You'll also need a recent passport-sized photograph and a self-attested copy of an Official Valid Document (OVD).
The table below shows the key documentation requirements based on your account type:
Source of funds documentation varies based on the nature of income:
- Rental income: rent receipts or rental agreements
- Dividend income: dividend warrants or bank statements showing credits
- Property sale proceeds: registered sale deed and, often, the original purchase deed
Proof of NRI status requirements differ by citizenship:
- Indian Passport Holders: Valid visa (employment/residence/student/dependent) or work/residence permit
- Foreign Passport Holders: Overseas Citizen of India (OCI) card or Person of Indian Origin (PIO) card
Conclusion
Outward remittance regulations provide NRIs significant flexibility to manage cross-border finances, enabling transfers up to USD 1 million annually from NRO accounts and unrestricted repatriation from NRE accounts for foreign-sourced funds.
Proper organization of key documents like Form A2, Form 15CA/15CB, and source of funds proofs is essential to streamline transactions and effectively plan for tax implications based on TCS rates.
Access to Indian income, property sale proceeds, and support for overseas education offers valuable financial versatility for NRIs balancing global obligations. Since international remittance rules evolve frequently, maintaining communication with your bank and consulting a financial advisor when uncertain about compliance or documentation ensures peace of mind and adherence to current regulations.
Frequently Asked Questions
Q1. What is the maximum amount an NRI can remit from India annually?
An NRI can remit up to USD 1 million per financial year from their Non-Resident Ordinary (NRO) account, subject to proper documentation and tax compliance.
Q2. Are there any restrictions on remitting money from NRE accounts?
No, NRE (Non-Resident External) accounts allow complete repatriation with no restrictions on amount, provided the funds originate from abroad.
Q3. What documents are typically required for outward remittance from India?
Common documents include Form A2 (declaration of remittance purpose), Form 15CA and Form 15CB (tax-related forms), a self-attested passport copy, and source of funds documentation. Requirements may vary based on the nature of the remittance.
Q4. How does the Tax Collected at Source (TCS) apply to outward remittances?
TCS rates vary based on the purpose and amount of remittance. Education remittances financed by loans attract 0.5% TCS above ₹7 lakh per year. Education or medical remittances not financed by loans attract 5% TCS above ₹7 lakh. Other purposes incur 20% TCS above ₹7 lakh.
Q5. Can NRIs freely remit proceeds from property sales in India?
NRIs can repatriate sale proceeds of residential property purchased with foreign funds up to USD 1 million per financial year, subject to proper documentation, tax clearance, and RBI regulations. Amounts beyond this limit require approvals.
