FEMA is the rulebook behind almost every financial decision an NRI makes in India. Get these five foundations right and the rest of your cross-border money life becomes much easier to navigate.
FEMA status drives everything
Under FEMA, the rules you follow depend on whether you are a “person resident in India” or a “person resident outside India.” Know your status before moving money, buying property or opening accounts.
Your status determines which bank accounts you may hold, what you can buy in India and how much you can repatriate.
The accounts an NRI can legally hold
FEMA’s deposit rules allow non-residents to maintain NRE and NRO rupee accounts and FCNR(B) foreign-currency deposits with authorised banks.
Principal and interest are generally fully repatriable.
Used for rent, dividends and other India-sourced income.
Fixed deposits in permitted foreign currencies.
When your status changes from resident to NRI, your existing resident savings or current account must be redesignated as an NRO account.
The USD 1 million repatriation window
NRIs and OCIs may remit up to USD 1,000,000 per financial year from NRO balances and certain asset-sale proceeds, subject to documentation and applicable taxes.
Plan around the cap and keep supporting paperwork, tax proofs and required certification organised well in advance.
Buying and selling property in India
- You may purchase residential and commercial property.
- You cannot normally purchase agricultural land, plantation property or a farmhouse.
- Payments must move through permitted banking channels.
- Repatriation of sale proceeds is allowed subject to conditions and limits.
Choose the correct investment route
Permitted listed equity and other instruments, subject to sectoral caps and the applicable route.
Additional avenues may be available, but proceeds are generally not freely repatriable.
Think of FEMA as your rulebook for living financially “bi-country.” Keep the right accounts and always move money with a paper trail.