What is the FEMA Limit?

One other distinction is important: FEMA rules and income-tax rules are not the same thing.

FEMA determines whether the foreign-exchange transaction/repatriation is permitted and under what conditions. That doesn't mean the underlying money is automatically tax-free.

For example, if you sell property in India, there can be Indian income-tax consequences on the capital gain. If you're repatriating eligible proceeds from an NRO account, the bank may require evidence that applicable taxes have been dealt with.

RBI guidance specifically provides for NRI/PIO remittance up to USD 1 million per financial year from NRO balances or eligible sale proceeds of assets, subject to applicable taxes and documentation.

I wouldn't try to split a large transfer between multiple banks just to increase the amount. The limit shouldn't be viewed as a per-bank-account allowance.

For a substantial inheritance, I'd also get the bank's current requirements in writing. In my case, the bank wanted documents showing where the funds came from before approving the outward remittance.

The LRS number is what confused me too.

USD 250,000 under LRS is not the same thing as the USD 1 million NRI remittance facility. LRS is generally a facility for resident individuals to remit foreign exchange for permitted current or capital account transactions, whereas NRIs have separate FEMA provisions governing repatriation of eligible Indian assets and NRO balances.

So if you're an NRI living in the US, don't automatically apply the LRS USD 250,000 figure to your NRO repatriation.

For NRO funds, the RBI framework provides a USD 1 million per financial year facility for eligible NRI/PIO remittances, subject to applicable conditions and taxes.

I also learned that the financial year is April to March, so the limit isn't based on the calendar year.

If you're dealing with inheritance, property or a large amount of accumulated NRO funds, I'd ask your authorised dealer bank for its current document checklist before starting the transfer.

I went through an NRO repatriation when I moved some proceeds from an Indian property sale to Canada.

The USD 1 million per financial year figure is the one I encountered for NRI/PIO remittance of eligible assets from India. It isn't simply a general FEMA limit on every transaction an NRI makes.

RBI rules provide for an NRI/PIO to remit up to USD 1 million per financial year from eligible NRO balances and certain asset-sale proceeds, subject to the applicable conditions and payment of taxes.

My bank asked for documentation relating to the property transaction, including the sale documents and tax-related information. The exact paperwork depends on the source of funds.

One thing I'd definitely clarify with the bank is whether they're treating your funds as ordinary NRO balance, sale proceeds of an asset, or inherited assets, because the documentation can differ.

Also, I wouldn't interpret having two NRO accounts as giving you two separate USD 1 million limits. The limit is connected to the eligible remittance facility, not something you multiply simply by opening accounts at different banks.

According to section 5 of the FEMA Act, Indian individuals are free to buy or sell foreign exchange, except for a few foreign exchange transactions which are banned by the central government, like lottery winnings, income from racing, riding, or purchasing of lottery tickets.                                                                                                                                                                  

Here are some of the things that you must keep in mind while remitting money abroad:   
 

• If you are a resident individual, then you can remit up to USD 2,50,000 in a financial year. 
• You cannot transfer funds abroad for buying lottery tickets, banned magazines, or other purposes. 
• There is no limit on doing transactions during a financial year, but the total income from foreign exchange from all income sources in India under LRS in the current financial year should be equal to or under the limit given by the Reserve Bank of India.