I left India to take up a job in Australia in 2019. Since I didn’t find out about completely different checking account and the necessity to designate my present checking account as NRO account, I continued to function my Indian checking account. I’ve remitted cash into this account and have used these funds to spend money on the Indian secondary fairness markets. Now I’ve realized my mistake. Can I convert my present Indian checking account into an NRE / NRO account and repatriate the funds again despatched earlier to India?
An individual turns into a non-resident below the Foreign Exchange Management Act (FEMA) as quickly as he leaves India to take up an employment outdoors India whereas an individual usually turns into a non-resident below the revenue tax legal guidelines based mostly on his bodily keep in India. Strictly talking an individual has to intimate his banker about change in his residential standing below FEMA as quickly as his flight takes off. However, in apply this isn’t performed and out of ignorance many individuals fail to take action. You can intimate your banker about change in your residential standing now and the financial institution will designate your present checking account as NRO account.
If you had opened an NRE account which might solely be opened after one turns into a non resident below FEMA, you possibly can have remitted the cash in that account. Money mendacity in NRE account will be repatriated again with none restrict. You might even have invested in India by that NRE account and remit again the total cash realized on sale of such investments.
Since the cash was remitted to your common checking account, you can not absolutely remit again the cash realized on sale of your investments in India. However, a non-resident is allowed to remit upto 10 lakh USD yearly from his NRO account yearly. So you may remit again upto this restrict yearly in case the combination worth of your investments exceeds 10 lakh USD.
Balwant Jain is a tax and funding professional and will be reached on jainbalwant@gmail and @jainbalwant on Twitter
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