Profit and Dividend Repatriation from India – FEMA & Tax Compliance Guide
Profit and Dividend Repatriation from India is a regulated process governed by FEMA, RBI guidelines, and Indian tax laws. Foreign companies, non-resident shareholders, and global investors earning income in India must comply with prescribed procedures before remitting funds abroad.
At Jain Prachi & Company, we provide end-to-end professional assistance to ensure profit and dividend repatriation from India is completed smoothly, legally, and without regulatory delays.
Who Can Undertake Profit and Dividend Repatriation from India?
The following entities are eligible for profit and dividend repatriation from India:
Foreign companies operating through Indian subsidiaries or branch offices
Non-resident shareholders receiving dividends from Indian companies
Foreign investors exiting Indian businesses or assets
Overseas service providers earning income in India
Types of Funds Eligible for Repatriation from India
Under FEMA and RBI guidelines, the following funds qualify for repatriation:
Eligible Repatriable Amounts under FEMA
| Nature of Remittance | Key Conditions |
|---|---|
| Profits of Indian Subsidiary | Post-tax profits, auditor certification |
| Dividends to Foreign Shareholders | Paid from post-tax profits |
| Capital Gains | Applicable tax payment and CA certification |
| Fees for Technical Services | Subject to withholding tax |
| Royalty or Consultancy Income | As per agreement and DTAA |
Step-by-Step Compliance for Profit and Dividend Repatriation from India
1. Payment of Applicable Indian Taxes
All applicable taxes must be paid before initiating profit and dividend repatriation from India.
Dividend income is taxable in the hands of the non-resident shareholder and may be governed by DTAA benefits.
Learn more about DTAA provisions from the official Income Tax Department
👉 https://incometaxindia.gov.in
2. Chartered Accountant Certification – Form 15CA & 15CB
Mandatory documentation includes:
Form 15CA – Online filing on the Income Tax portal
Form 15CB – Certificate issued by a Chartered Accountant
(Required for most foreign remittances)
Official Form 15CA portal:
👉 https://www.incometax.gov.in
3. Submission to Authorized Dealer (AD) Bank
Banks require the following documents:
Board resolution (for dividend remittance)
Form 15CA and Form 15CB
Tax payment challans
FEMA declaration
Agreement or invoice, where applicable
All profit and dividend repatriation from India must be routed through an RBI-authorized dealer bank.
4. RBI Reporting (Where Applicable)
Certain transactions such as FDI-related capital repatriation require reporting on the RBI FIRMS portal.
RBI FEMA guidelines reference:
👉 https://rbi.org.in
FEMA Regulations Governing Repatriation from India
FEMA regulates all outbound remittances from India
Automatic and approval routes apply based on transaction nature
Accurate reporting and valuation are mandatory
Non-compliance can lead to penalties and remittance blocks
Tax Implications on Profit and Dividend Repatriation from India
| Nature of Income | Withholding Tax Rate* |
|---|---|
| Dividends | 10% (subject to DTAA) |
| Royalty / FTS | 10% – 20% |
| Capital Gains | 10% – 30% |
| Business Profits | No TDS after tax payment |
*Rates may vary based on applicable DTAA.
Common Mistakes in Profit and Dividend Repatriation from India
Initiating remittance without Form 15CA & 15CB
Ignoring DTAA benefits or withholding tax
Incorrect purpose codes
Missing FEMA or RBI reporting deadlines
Using unauthorized banking channels
These errors often result in penalties or remittance rejections.
How Jain Prachi & Company Supports Repatriation from India
Preparation and filing of Form 15CA & 15CB
FEMA and Income Tax compliance advisory
DTAA-based tax optimization
Bank coordination for smooth remittance
Complete support for dividend and profit repatriation
Planning Profit or Dividend Repatriation from India?
We have assisted global businesses and non-resident investors in executing profit and dividend repatriation from India efficiently and compliantly.
📧 Email: contactus@jainprachi.com
🌐 Website: https://jainprachi.com
FAQs – Profit and Dividend Repatriation from India
Q1. Is RBI approval required for profit repatriation from India?
No, if remittance is from post-tax profits and complies with FEMA norms.
Q2. Are Form 15CA and 15CB mandatory?
Yes, for most foreign remittances.
Q3. Can dividends be remitted in foreign currency?
Yes, through an Authorized Dealer bank after compliance.
