Repatriation of Funds from India – RBI & Tax Compliance Explained
Repatriating profits, dividends, capital gains, or service income from India to an overseas bank account involves a blend of RBI regulations, tax compliance, and documentation formalities. Whether you’re a foreign investor, branch office, or overseas parent company, it’s essential to handle repatriation correctly to avoid penalties and delays.
At Jain Prachi & Company, we provide end-to-end assistance for safe and compliant fund repatriation under Indian law.
What is Repatriation of Funds?
Repatriation refers to the process of transferring money earned in India—such as dividends, royalties, interest, sale proceeds, or capital gains—back to the foreign entity’s country of residence.
This process is governed by:
- Foreign Exchange Management Act (FEMA)
- Reserve Bank of India (RBI) Guidelines
- Income Tax Act (Section 195 and others)
Who Can Repatriate Funds from India?
The following entities and individuals are eligible for repatriation:
- Foreign companies operating through a branch or liaison office
- Overseas investors who have invested in Indian companies (FDI)
- Non-resident shareholders receiving dividends
- Foreign service providers paid by Indian clients
- Foreign lenders repatriating interest income
Types of Repatriable Transactions
Type of Income | Repatriation Allowed | RBI Approval Needed |
Dividend (after tax) | Yes | No (subject to FDI norms) |
Royalty/Technical fees | Yes | No (under automatic route) |
Interest on ECBs | Yes | No (if conditions met) |
Capital gains on asset sale | Yes | Sometimes (depends on sector) |
Branch office profits | Yes | Post audit & compliance |
Key Conditions for Repatriation
To repatriate funds from India, the following must be ensured:
- Tax Clearance
- TDS must be deducted under Section 195, wherever applicable.
- File Form 15CA and Form 15CB via Indian Chartered Accountant.
- Income tax return filing may be needed in certain cases.
- Proper Documentation
Depending on the nature of funds, the following documents are typically required:
- Invoices/agreements
- Board resolution (for dividend or capital repatriation)
- FIRC & KYC documents of recipient bank
- Form A2 declaration (submitted to AD Bank)
- RBI Compliance
- Ensure the remittance is under the automatic route or prior approval route.
- For certain sectors (e.g., defence, telecom), RBI permission may be required.
How Jain Prachi & Company Helps with Repatriation
We simplify repatriation for our international clients by offering:
- Evaluation of RBI route (automatic vs approval-based)
- Preparation of Form 15CA/15CB with expert tax opinion
- Coordination with authorized dealers (banks) for compliance
- Filing of necessary returns under FEMA
- Audit certification and documentation support for branch office repatriation
Repatriation for Branch & Liaison Offices
Foreign companies operating through branch offices can remit profits post:
- Finalization of audited accounts
- Payment of applicable taxes
- Submission of Auditor’s Certificate confirming compliance with FEMA & Income Tax laws
Liaison offices, however, cannot repatriate profits as they are not allowed to undertake commercial activities.
Typical Timeline for Repatriation
Step | Approx. Time Required |
Tax computation & TDS | 1–3 days |
CA certification (15CB) | 1–2 days |
Bank processing (Form A2) | 3–5 days |
Delays may occur if any tax or regulatory documentation is incomplete.
Why Choose Jain Prachi & Company
- Decade-long experience in cross-border remittance compliance
- Registered with multiple Authorized Dealer (AD) banks
- Proficient in international tax law and FEMA regulations
- Trusted by over 100+ foreign businesses
Need Expert Help for Repatriation from India?
Our team ensures your money moves safely across borders with full compliance. Let us take care of the taxes, filings, and RBI regulations while you focus on business growth.
📧 Email: contactus@jainprachi.com
🌐 Website: https://jainprachi.com
FAQs – Repatriation of Funds from India
Q: Is dividend income freely repatriable for foreign shareholders?
Yes, once tax is paid and the company has sufficient profits, dividends can be repatriated without RBI approval.
Q: Can I repatriate profits from sale of shares in an Indian company?
Yes, subject to capital gains tax payment and, in some cases, sectoral RBI approvals.
Q: Is Form 15CB required for all repatriations?
No, only if the remittance exceeds ₹5 lakh or is not covered under the specified exempt list.
