Understanding NRO/NRE Banking and TCS for NRIs
Repatriating House Sale Proceeds from India

  • TCS applicability on Resident Indians initiating outward remittance :
    • Tax Collected at Source (TCS) significantly affects NRIs when repatriating house sale proceeds from India.
    • TCS is applicable to all Resident Indians repatriating money to foreign accounts from Indian Resident Savings Accounts, aimed at
      encouraging the retention of funds within the Indian economy.
    • Importance of Banking Status Change:
      • Upon becoming an NRI, it’s crucial to change the status of banking accounts from regular savings to NRO (Non-Resident Ordinary)
      • Additionally, opening an NRE (Non-Resident External) account is recommended for initiating any foreign remittance in India,
        including investments.
    • Common Concerns:
      • Many NRIs continue using their Indian Savings accounts, worried about the impact on investments, PF contributions, and PAN
        numbers linked to these accounts.
      • The transition from a Savings to an NRO account does not require changing the account number but merely altering its status, thus retaining all existing links to investments and official documents.
    • Compliance Requirements for Repatriation:
      • Repatriating money from NRO accounts requires the involvement of
        a practicing-chartered accountant in India to fill out Form 15CA/15CB.
      • These forms are necessary to intimate the RBI that the repatriated money is tax compliant.
    • Handling Income Generated in India:
      • All income generated in India, such as rent, mutual fund gains, equity gains, or other income, must be deposited into the NRO account to remain compliant with Indian laws and to benefit from
        TCS savings.