Q.1166 Remittance from NRO to

NRE not taxable?

Question: Transfers/ remittances from NRO Accounts to NRE accounts of funds from above Accounts for the specified 33 purposes covered under CBDT Notification No 93/2015 dated 16/12/2015 not taxable and certificates 15CA and/or 15CB are not required. But some of the banks do insist for such certificates from CA and account holder/remitter. Most of CAs also have such views. But Certificates are not the requirements established by govt/RBI/CBDT. Above issue needs to examined by other than Bank and CAs also. In practice, this noticed that certificates 15CA/15CB are not given. Only CA Letter stating that funds can be transferred is submitted. Can we have further examined whether CA Certificate is really required and given? Answer: The notifications that you mention do simplify the requirement of submitting Form 15CA & CB15; however they do not eliminate the requirement for transfers between NRO and NRE. Furthermore how would a bank know that the funds are not taxable without documentation! Form 15CA and Form 15CB from April 1, 2016 is required or not required depending on the type/amount/reason of payment [transfer] being made abroad. More information on this is provided in an article titled ‘Updated rules on Form 15CA, 15CB requirement’ to view use the link provided below. http://nriinformation.com/articles7/nro-to-nre- transfer-documents-requried.htm On this page you will also find a link to a copy of the notification you mention. Hope this helps. Kindly Note: NRIs should be aware that a transfer from NRO to NRE is treated as if the funds are being remitted abroad. Even though the money is moved from one account to the other and may remain in India at the same bank where a person may hold both NRO and NRE accounts; once money is moved to NRE account, the account holder can freely have the money sent to their foreign bank accounts within a matter of hours using the online banking facility. RBI allows transfer funds from NRO account to NRE account within the overall ceiling of USD one million per financial year subject to payment of tax, as applicable. While every bank’s procedure of transferring funds from NRO to NRE may vary and they may have their own preprinted forms for this purpose, they will require proof in specified format showing that taxes have been paid and source of funds.