From India to the US: How to Securely Transfer Funds Without Breaking the Law
Complete guide for Indians moving to the US on legal fund transfers. RBI rules, LRS limits, and documentation requirements to avoid FEMA violations.
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Admin
Posted at
Banking & Remittances
Posted on
Nov 21, 2024
For Indians moving to the US, one of the most confusing, and risky, steps is figuring out how to legally bring your money with you. From family gifts and property sale proceeds to rental income, there are strict rules around how and how much you can send abroad. This guide breaks it down simply.
The Reserve Bank of India (RBI) permits Indian residents to remit up to USD 250,000 per financial year under the Liberalised Remittance Scheme (LRS). But depending on your residency status, source of income, and purpose of remittance, different documentation and limits apply.
Key Things to Know
1. Gifts vs Income
Sending money as a "gift" to your NRI self (from parent account to your foreign account) has different tax and compliance implications compared to remitting your Indian rental income or capital gains.
2. Repatriation of Sale Proceeds
If you've sold property in India and want to transfer the proceeds to the US, you'll need proper tax clearance, CA certification (Form 15CB/15CA), and possibly RBI approval.
3. Using LRS Channels
You must route remittances through authorised dealers (banks), not informal hawala methods, to ensure legal compliance.
Avoid These Common Mistakes
1. Using Undocumented Routes
Many NRIs unknowingly violate FEMA or Income Tax laws by using relatives, middlemen, or untracked forex services.
2. Mismatched Purpose Codes
If the purpose of transfer is incorrectly declared (e.g. marking "gift" instead of "property sale"), it can flag your account for audit or rejection.
3. Neglecting Tax Filing in India
Even if your income is being moved abroad, Indian taxes might still apply unless you've properly filed and declared it.
Settleline's NRI Remittance Playbook
What we do for clients:
Evaluate source of funds: salary, gift, rent, property, startup exit
Create a repatriation roadmap with CA-certified documentation
File Form 15CA/CB with the right purpose codes
Help with RBI compliance, if applicable
Coordinate with US-side CPA if FBAR/FATCA applies
Ready to transfer funds legally? Book a free consultation with our experts.
