Repatriation of foreign currency is subject to some restrictions, particularly on sale of property. However these restrictions have been greatly liberalized recently.

Rental income j
Rentals from property can be repatriated after payment of applicable income tax. However, if the owner is not taxpayer in India all that is needed is a simple declaration, in duplicate, to state that he is not a taxpayer when the repatriation is made. This declaration can be submitted through the authorized dealer.

Sale proceeds
Sale proceeds of property can be repatriated subject to following limits:

a. Property bought with foreign currency
Where the payment for investment in commercial real estate was made through:

• Foreign Currency (FC) received from outside India through normal banking channels
• FC funds held in FCNR account
• Funds held in the NRE account
  The Principal Investment to the extent of amount paid for acquisition of property in foreign money can be freely repatriated.

The balance amount of the sale proceeds (credited to NRO Account) can be repatriated subject to a limit of USD 1 million per calendar year after payment of applicable taxes.

Example: Assume that you pay USD 2 m from your FCNR A/c and INR 44 m. (USD 1 m) from your NRE A/c. You can therefore repatriate USD 2 m (paid from FCNR A/c) + USD plus 1 m (FC equivalent on the date of payment from NRE A/c) irrespective of the USD/ INR exchange rate on the date of repatriation.

b. Property bought with Indian currency
Where the payment (part or full) for investment in commercial real estate is made using

• Funds held in NRO account, or
• Funds realized in India from any existing property
• Or any money owed in India (i.e. Indian money)

The sale proceeds of property credited to NRO Account, subject to payment of applicable taxes, can be repatriated subject to a limit of USD 1 million per calendar year, provided that the property is held for a period not less than 10 years.

If the property is sold prior to the 10 year period, the sale proceeds must be held in India (e.g. in NRO Account or in certain permitted investments) for the balance period, i.e., up to 10 years from date of purchase of property:
Example: The property is purchased (using part or full Indian money), say on 1.1.2004 and sold on 1.1.2010 (6 years). The sale proceeds including capital gains, subject to the cap of USD 1 million per calendar year can be repatriated only after 1.1.2014 (10 years from date of purchase).

Exceptions requiring Reserve Bank permission
Repatriation of sale proceeds of any immovable property (other than agricultural and/or plantation property/farm house) by an NRI/PIO is permitted without the prior approval of Reserve Bank if the property was acquired by the seller in accordance with the provisions of foreign exchange law in force at the time of acquisition or the provisions of FEM (Acquisition and Transfer of Immovable Property in India) Regulations, 2000.

However permission of the Reserve Bank is required in the case of NRIs who acquired residential or commercial property in India when they were residents in India, or inherited the property from a person resident in India. Similarly, permission is required for transfer of any property if it is not expressly permitted in FEMA, 1999 or in FEM (Acquisition and Transfer of Immovable Property in India) Regulations, 2000. This is applicable to partnership firm as well if any of the partners is a foreign citizen, whether of Indian origin or not, for acquisition or disposal of the firm's immovable property.