Hello,
My brother who is an NRI had loaned me 20 lakhs for the construction of my house 4 years ago. Now, I need to return back the money. Is it possible for me to transfer it to his NRO/NRE account.
What is the procedure for the same. Are the rules different from NRO and NRE account.
Can i transfer from my SB A/c or give a cheque/draft?
Thanks.
You could transfer INR into NRO
INR transfer into NRE is not allowed
When you say inr transfer to née is not allowed should I buy foreign exchange to transfer.
also, what is the threshold for transfer? Can you point me where it has been mentioned 10 lakhs at a time.
As per FEM (Borrowing and Lending in Indian Rupees) Regulations, you can repay the funds to your brother ONLY in his NRO account (not in his NRE account). Further, your NRI brother cannot repatriate these funds out of India.
Yes Me too have same issue checking with people as how to transfer the money.
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That will be a circumvention of the FEMA guidelines and can lead you to a problem not only under FEMA but also the ITA. I will not advise it.
What is the issue crediting it in NRO account of your brother?
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Thanks for the response. There is no problem in crediting to NRO account. However, I am worried that it can't be repartriable.
I read somewhere that you can send it through LRS... therefore, i wanted to know the pros and cons... I thought that i can directly credit it to NRE. which i think is not the case.
Yes, the money will not be repatriable. You can also not use the LRS scheme for repayment as that would be in conflict with the Borrowing and Lending regulations.
Yes, your brother could have otherwise done an NRO to NRE transfer - but in my view, CA should NOT issue a certificate because FEMA says that money is non repatriable - so, even if it is proper tax paid money and all, it should not be allowed to be repatriated out of India.
Your brother can use the funds from NRO account to make investments in India. He can see if a lower TDS rate can be applied via DTAA.
This is my opinion, you can also check with other CAs - if a CA is ready to give your brother Form 15CB, then no problem.
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