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‘Is there a limit to the amount I can transfer from India to UAE?’

KT reader asks whether there are any rules regarding maximum amount allowed and methods of transfer

Question: I have substantial savings in my bank account in India. Is there a limit to the amount I can transfer to the UAE? Please advise about any rules in this regard, channel of transmission etc.

Response: It is assumed that you are a non-resident Indian and intend to transfer (remit) your savings from your Indian bank account to the UAE. Therefore, the provisions of Foreign Exchange Management (Remittance of Assets) Regulations of 2016 read with Notification No. FEMA 13 (R)/2016-RB issued on 1 April 2016 (the Notification), and Master Direction 13/ 2015-16 - Remittance of Assets updated on 28 April 2016 (the Master Direction), shall be applicable.

A non-resident Indian may transfer from India up to $1 million to the countries which are approved by the Reserve Bank of India (the ‘RBI’) in a financial year. This is in accordance with Section 4(2) of the Notification and Section 3(2) of the Master Direction.

Section 4(2) of the Notification reads: “A Non-Resident Indian (NRI) or a Person of Indian Origin (PIO) may remit through an authorised dealer an amount, not exceeding USD 1,000,000 (US Dollar One million only) per financial year,

(i) out of the balances held in the Non-Resident (Ordinary) Accounts (NRO accounts) opened in terms of Foreign Exchange Management (Deposit) Regulations, 2016/ sale proceeds of assets/ the assets acquired by him by way of inheritance/ legacy on production of documentary evidence in support of acquisition, inheritance or legacy of assets by the remitter;

(ii) Under a deed of settlement made by either of his parents or a relative (relative as defined in Section 2(77) of the Companies Act, 2013) and the settlement taking effect on the death of the settler, on production of the original deed of settlement;

Provided that where the remittance under Clause (i) and (ii) is made in more than one instalment, the remittance of all instalments shall be made through the same Authorised Dealer (“AD”).

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Provided further that where the remittance is to be made from the balances held in the NRO account, the account holder shall furnish an undertaking to the Authorised Dealer that “the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”

In furtherance, Section 3(2) of the Master Direction reads: “ADs may allow NRIs/ PIOs, on submission of documentary evidence, to remit up to USD one million, per financial year:

(i) out of balances in their non-resident (ordinary) (NRO) accounts/ sale proceeds of assets/ assets acquired in India by way of inheritance/ legacy;

(ii) in respect of assets acquired under a deed of settlement made by either of his/ her parents or a relative as defined in Companies Act, 2013. The settlement should take effect on the death of the settler;

(iii) in case settlement is done without retaining any life interest in the property i.e. during the lifetime of the owner/ parent, it would tantamount to regular transfer by way of gift and the remittance of sale proceeds of such property would be guided by the extant instructions on remittance of balance in the NRO account;

In case the remittance is made in more than one instalment, the remittance of all instalments should be made through the same AD. Where the remittance is to be made from the balances held in the NRO account, the Authorised Dealer should obtain an undertaking from the account holder stating that “the said remittance is sought to be made out of the remitter’s balances held in the account arising from his/ her legitimate receivables in India and not by borrowing from any other person or a transfer from any other NRO account and if such is found to be the case, the account holder will render himself/ herself liable for penal action under FEMA.”

You may approach the RBI and/or consult a chartered accountant or a legal practitioner in India for further advice.

Ashish Mehta is the founder and Managing Partner of Ashish Mehta & Associates. He is qualified to practise law in Dubai, the United Kingdom and India. Full details of his firm on: www.amalawyers.com. Readers may e-mail their questions to: news@khaleejtimes.com or send them to Legal View, Khaleej Times, PO Box 11243, Dubai.