Three account types — NRO, NRE, FCNR

Every NRI dealing with India needs to understand the three account categories:

An NRI typically maintains all three. Salary or rental income from India goes to NRO; foreign earnings repatriated to India go to NRE; surplus funds for term deposits go to FCNR.

Joint holding rules: NRO can be jointly held with another NRI or with a resident relative on either-or-survivor basis. NRE can be jointly held with another NRI or with a resident relative on former-or-survivor basis only. FCNR rules mirror NRE.

The USD 1 million repatriation limit on NRO funds

Under FEM (Remittance of Assets) Regulations, an NRI may repatriate up to USD 1 million per financial year from NRO account balances, subject to:

• Production of CA Certificate (Form 15CA / 15CB) certifying tax compliance;
• Repatriation through an authorised dealer bank;
• Documentation of the source of NRO funds (sale deed for property sale; rental statements; dividend warrants).

The USD 1 million limit applies per FY, not cumulative — unutilised limit lapses on 31 March. NRIs holding substantial India assets often plan repatriation across multiple FYs.

Immovable property — what NRIs and OCIs can buy

Under FEM (Acquisition and Transfer of Immovable Property in India) Regulations:

• Permitted: Residential and commercial property — any number, payment via NRE/NRO/FCNR or normal banking channels;
• Prohibited (purchase): Agricultural land, plantation property, farmhouses;
• Permitted (inheritance only): Agricultural land, plantation property, farmhouses can be inherited from a resident; sale permitted with proceeds repatriable up to USD 1 million / FY;
• Foreign nationals (non-NRI, non-OCI): Generally prohibited from buying immovable property except residential property under specific conditions; require RBI approval for most purchases.

Reporting via Form IPI is required for NRI property purchases above prescribed thresholds. Sale of inherited agricultural land must be made to a resident Indian citizen.

LRS for residents — USD 250,000 per FY

For resident individuals remitting funds abroad, the Liberalised Remittance Scheme (LRS) caps remittances at USD 250,000 per FY for any combination of permissible current or capital account purposes:

• Education expenses;
• Medical treatment;
• Travel;
• Gift to relatives abroad;
• Investment in foreign securities, property, mutual funds;
• Purchase of property abroad;
• Maintenance of close relatives abroad.

Post-Finance Act 2023: 20% TCS on LRS remittances above ₹7 lakh per FY (for non-education / non-medical purposes). Education-loan remittances and remittances for education from sources permitted under Section 80E carry 0.5% TCS above ₹7 lakh; medical remittances carry 5% TCS above ₹7 lakh. The TCS is creditable against income tax liability and refundable on filing return.

LRS does not apply to corporates — corporates use ODI / current-account routes (Form A1, Form A2) at AD bank.

Reporting deadlines NRIs and corporates routinely miss

Late filing of any of these is compoundable under Section 15 FEMA. See our procedural walkthrough at FEMA Compounding Procedure 2026.

Common NRI / cross-border contraventions

The most common FEMA contraventions in NRI / cross-border space:

1. Buying agricultural land while NRI: Compounding amount typically equals the value of the property; in some cases mandatory divestment.
2. Operating a resident savings account while NRI: Status conversion to NRO is mandatory upon becoming NRI; failure to convert is a contravention.
3. Repatriating beyond USD 1 million from NRO without 15CA/15CB: Compounding required.
4. Maintaining a power-of-attorney for a non-resident parent operating a resident account: Status to be reviewed; convert to NRO.
5. OCI inheriting agricultural land and selling to another NRI: Sale must be to a resident Indian citizen; sale to NRI is impermissible.
6. NRI receiving rental income but not declaring under DTAA: India-source TDS applicable; reconciliation through Section 195.
7. Resident individual exceeding LRS limit: Above USD 250,000 in a FY across all permissible heads is a contravention.

FCRA — separate but related

For NRIs / OCIs / Indian charitable institutions receiving foreign contributions, the Foreign Contribution (Regulation) Act, 2010 (FCRA) governs separately. FEMA does not regulate gifts and donations to Indian charitable institutions; FCRA does. Common pitfalls:

• Indian charitable trust accepting donations from foreign sources without FCRA registration;
• Use of FCRA-account funds for non-FCRA purposes;
• Mixing of FCRA and non-FCRA bank accounts;
• Late filing of FC-4 annual return.

FCRA penalties are severe — registration cancellation, prosecution. Where an NRI makes a personal gift to a relative resident in India, that is permissible under FEMA without FCRA implications. But contributions to charitable institutions trigger FCRA.

Practical checklist for an NRI in 2026

1. Convert resident accounts to NRO/NRE/FCNR within 30 days of becoming NRI;
2. Update KYC at all banks/depositories with NRI status, foreign address, OCI/passport details;
3. Track tax-residency status — 182 days threshold; Section 6 Income Tax Act;
4. For India-source income: obtain Form 16/16A from payers; compute India tax under DTAA; claim foreign tax credit in resident-country return;
5. For NRO repatriation: maintain a "source of funds" trail (rent receipts, sale deeds, dividend statements);
6. For purchase of immovable property in India: confirm property is not agricultural; obtain CA certificate for source of funds;
7. For investments in Indian companies: ensure FDI compliance via FC-GPR; verify the Indian company has filed correctly;
8. For estate planning: consider succession to assets in India (will, registration, OCI inheritance rules);
9. Annual review of FEMA / Income Tax filings with a qualified Indian CA.

For the broader FEMA framework, see our FEMA Compliance pillar guide.