We regularly help clients move money from India to US: proceeds from property sales, inheritances, NRO balances and ESOP exits. Mechanics are not complicated, but sequence matters. Get it out of order and your bank can hold wire, or your tax paperwork can be questioned.
1. Know which account your money sits in
FEMA treats your money differently depending on which Indian account holds it. A repatriation route, paperwork and limits all change.
| Account type | Source of funds | Repatriation limit |
|---|---|---|
| NRE (Non-Resident External) | Foreign income converted to INR | Fully and freely repatriable, no limit |
| FCNR (Foreign Currency Non-Resident) | Foreign currency deposits | Fully and freely repatriable, no limit |
| NRO (Non-Resident Ordinary) | India-source income (rent, dividend, sale proceeds) | USD 1 million per financial year, subject to documentation |
| Resident savings account (legacy) | Pre-NRI income | Must convert to NRO before repatriation |
2. USD 1 million per FY rule, in plain English
Under RBI's rules on remittance of assets, you may remit up to USD 1,000,000 (or equivalent) per Indian financial year out of your NRO account. This window runs 1 April to 31 March. This cap is per individual, per FY, across all your Indian banks combined.
- Inheritance proceeds: no separate cap, falls within same USD 1M FY ceiling.
- Sale of immovable property bought as an NRI with NRO funds: within that USD 1M ceiling.
- Sale of residential property bought with NRE/FCNR funds or money remitted from abroad: amount originally paid in foreign exchange can be repatriated outside USD 1M ceiling, for no more than two such properties.
- Sale of immovable property inherited or bought while resident: within that USD 1M ceiling, but a bank may seek additional source-of-funds proof.
- Current income (rent, dividend, interest): outside that cap, fully repatriable each month without limit.
3. Form 145 / 146 ritual
For any taxable remittance above ₹5 lakh in a financial year, Indian Income Tax Act demands two forms be filed online before a bank releases your wire.
- Form 146: issued by a Chartered Accountant. Certifies nature of remittance, applicable tax (TDS under Section 393(2) of Income-tax Act, 2025 (earlier Section 195) or treaty rate), and that taxes have been deducted or paid.
- Form 145: filed by you (a remitter) on income tax portal, quoting Form 146 UDIN. Part C is a standard part for large remittances.
4. Section 393(2) TDS - a trap that empties refunds
When a property buyer or company pays an NRI, they must deduct TDS under Section 393(2): 12.5% plus surcharge and cess for long-term gains on property (transfers on or after 23 July 2024), or 30% plus surcharge and cess for short-term gains, on full sale value, not on gain. On a ₹4 crore flat sale, that means close to ₹60 lakh stuck with a tax department until your ITR refund arrives, often several months later.
A workaround is a Lower Deduction Certificate under Section 395(1), filed on Form 128 before your sale. We compute actual capital gain, file Form 128, and obtain a certificate authorising your buyer to deduct TDS on gain (not gross value). On that same ₹4 crore sale with ₹40 lakh actual LTCG, TDS drops from close to ₹60 lakh to about ₹5.2 lakh.
5. Full sequence we run for every USA-bound transfer
- Map your source: identify NRE vs NRO and whether funds are currently in an account that can wire abroad.
- If your source is a property or ESOP sale: file Form 128 before that transaction, secure an LDC, and ensure your buyer or employer deducts a correct lower TDS.
- Park proceeds in an NRO account (if not already there).
- Compute taxes payable, deposit any shortfall through e-Pay Tax (challan ITNS 280N for tax year 2026-27 onwards; ITNS 280 for earlier years).
- Issue Form 146; you file Form 145 Part C, quoting Form 146 UDIN.
- Submit your bank's remittance application (often Form A2), Form 145/146 pack, and your bank's repatriation form to your branch.
- Bank executes a SWIFT wire to a US beneficiary account. Funds typically credit within 2–4 working days.
- File an FY-end Indian ITR claiming any treaty relief and reconciling TDS or refund.
6. US-side reporting that NRIs forget
Once funds land in your US account, Indian compliance is done. But a US side begins. As a US tax resident, you must report:
- FBAR (FinCEN 114) if your aggregate non-US accounts exceeded USD 10,000 at any point in that year.
- FATCA Form 8938 if your foreign assets exceeded residency-based thresholds (USD 50,000–600,000).
- Schedule B on Form 1040 disclosing a foreign account.
- Foreign Tax Credit on Form 1116 for India tax paid: avoids double tax on same income.
Want this done end-to-end?
We handle a full sequence (Form 128, Form 145/146, bank coordination, and US-side FBAR/FATCA support) on a fixed-fee basis. Most USA repatriations are completed inside three weeks once we have your documents in hand.