January 01, 2026
4 mins read
A non-repatriable demat account is used to hold securities by Non-Resident Indians (NRIs) but it provides limited manoeuvrability to transfer the proceeds of sale. Except for this limitation, it is a usual demat account, that is it acts as a digital locker and stores shares, bonds, and other securities in electronic form and keeps everything tidy in one place.
The non-repatriable meaning in the context of NRI investments refers to funds that cannot be transferred outside India. When NRIs use a non-repatriable demat account, the money invested in the securities held in this account must remain within India and cannot be moved abroad. Many NRIs choose this type of account to keep a portion of their wealth rooted in the country. Some prefer steady access to the Indian market, while others feel comfortable tracking long-term holdings that stay close to home.
In practice, NRIs can invest, receive dividends, and manage their securities through the non-repatriable account. Yet the funds stay within India. This makes the NRIs understand the non-repatriable meaning, and the structure to keep investments active while adhering to the rules that apply to cross-border accounts.
A non-repatriable Demat account allows NRIs to hold and trade Indian securities while keeping funds within India. Linked to an NRO account, it permits investing, earning income, and selling assets, with limited overseas transfer after tax and within RBI limits. The content covers features, eligibility, differences from repatriable accounts, taxes, and the account opening process.
A non-repatriable demat account is an NRI-specific account that stores shares, bonds, and other securities in electronic form. The main utility remains simple. The funds associated with this account, however, cannot be sent abroad, and the investment fund must be generated in India.
The account behaves like a regular Demat account. Yet the linked funds remain in India at all times. NRIs prefer this when they want to keep a stable financial base in the country. It supports investing and holding assets, but without any overseas transfers. In case the NRI investor wishes to transfer the principal investment amount and interest amount outside India, he or she can do it after TDS (Tax Deducted at Source) is deducted, with an annual limit of $1 million per financial year.
A Non-Repatriable Demat account, also known as an NRO Demat account, is specifically designed for NRIs to manage investments within India. Here's how these accounts operate:
Local Investment: NRIs use non-repatriable Demat accounts to invest funds earned in India into shares, bonds, and mutual funds.
Restricted Fund Transfer: The proceeds from these accounts aren't freely transferable abroad. Principal and interest can be remitted overseas, but only after tax deductions and up to an annual limit of $1 million, as per RBI guidelines.
Linked to NRO Account: Only a Non-Resident Ordinary (NRO) bank account can be linked with a Non-Repatriable Demat account.
Investment Limits: RBI regulations limit NRI ownership in a company to 5% of its paid-up capital through these accounts.
These points clarify the operational aspects and regulations governing a non-repatriable Demat account.
Let’s consider Aniket, an NRI living in the US. He, however, has income sources in India, old investments in the share market made when he was living in India and the monthly rent from a flat. He invests this income to buy securities in India and holds them in a non-repatriable demat account. The account holds investments worth ₹80 million. When he sold a part of these holdings, he received ₹24 million. Though he wants to send the full amount to his US-based bank account, he cannot do so.
As per the RBI rules, only the principal and interest can be transferred outside India from a non-repatriable demat account, and that too after the taxes are paid. Also, the yearly cap is $1 million. Hence, NRIs must keep separate Demat accounts for repatriable and non-repatriable holdings. A non-repatriable account must link only to an NRO bank account.
Funds stay within India: The money linked to this account cannot move outside India. This may seem limiting at first, but it keeps everything centred and easy to track.
Linked only to an NRO account: The account must connect to an NRO bank account as it helps the Indian income be recorded in one place, which feels practical when handling taxes or paperwork.
Separate account for repatriable assets: NRIs need different accounts for repatriable and non-repatriable holdings, as the separate lending provides clarity of purpose and avoids co-mingling funds.
Limited outward remittance: The capital and interest linked to a non-repatriable demat account can only be transferred outside India after taxes are paid. The guideline ensures that the necessary checks are made for transfers.
USD 1 million annual limit on transfer: In case of a non-repatriable demat account, the RBI limits capital movement abroad per year to $1 million.
The choice depends on residency and the nature of the funds. An Indian resident can hold a regular Demat account for equity and debt assets. But an NRI must choose between two types. One is a non-repatriable Demat account, which holds investments that remain in India. The other one is a repatriable account, which has no bar or limitation on the transfer of investment amount. You can pick the account that fits your financial requirements and investment goals.
You can have both accounts, which can manage your investment in two folds. This can help to keep records more organised. Naming a nominee for the accounts can also help provide certainty. The charges by the broker will be relevant, including the tools offered by the platform, and the customer service over time, as an account becomes easier to use.
Parameter | Repatriable Demat Account | Non-Repatriable Demat Account |
Fund Transfer | Allowed freely. | Limited to principal and interest with a cap of $1 million per financial year. |
Linked Bank Account | NRE account. | NRO account. |
Investment Basis | Foreign/India | India |
Repatriation | Full | Limited, capped as per RBI norms. |
NRIs with income in India: NRIs earning rent, dividends, or interest in India often use this account. It keeps these funds in one place, simple to manage.
Individuals holding older investments: Some NRIs already own shares from earlier years in India. A non-repatriable account keeps these holdings active without changing older arrangements.
NRIs who prefer domestic holdings: Many NRIs like keeping a small financial base in India. This account supports that choice and connects smoothly to an NRO account.
Choose a depository participant: Pick a DP that feels reliable. A steady platform makes the process easier to follow.
Complete the application form: Provide the required details. Keeping documents ready helps avoid delays.
Submit KYC documents: Share your passport, visa, PAN, and address proof. This confirms your NRI status.
Link your NRO bank account: This step is essential because all funds must move through the NRO account.
Finish verification: The DP completes a short verification. Once done, the account becomes ready for use.
A non-repatriable Demat account must be linked specifically to an NRO savings account for holding investments in India.
NRIs must maintain separate Demat and bank accounts for repatriable and non-repatriable investment purposes.
NRIs are not allowed to freely transfer proceeds from selling securities or capital gains outside India.
NRIs can transfer only the principal amount along with earned interest from their NRO savings account.
The RBI allows remittances up to one million US dollars per financial year after applicable taxes are paid.
Tax on income earned in India: Any income earned in India is taxable in India. This includes interest and dividends credited to the NRO account.
TDS on certain earnings: Tax is deducted at source on interest and similar payments.
Capital gains tax on investments: Gains from shares or mutual funds are taxed based on holding period. Short-term and long-term gains follow different rates.
Tax on repatriation of funds: Only the principal and interest can move abroad after tax. The actual amount becomes clear only after deductions.
Double Taxation Avoidance Agreement (DTAA): Some countries have tax agreements with India. These reduce the risk of paying tax twice on the same income.
Need to file tax returns: NRIs must file returns if their Indian income crosses a threshold. This keeps records clean and avoids issues later.
Disclaimer: This article is for informational purposes only and does not constitute investment advice. Bajaj Broking Financial Services Ltd. (BFSL) makes no recommendations to buy or sell securities.
Share this article: 
repatriable accounts restrict fund transfers abroad, while NRI repatriable accounts allow full repatriation of investment proceeds to the resident country.
NRI non-repatriation means funds in specific accounts cannot be transferred abroad and must remain within the host country.
Yes, NRO (Non-Resident Ordinary) accounts are typically non-repatriable, limiting fund transfers abroad, except for certain specified limits.
No, funds from a non-repatriable demat account generally cannot be transferred abroad, except under certain conditions and limits.
No, investments in a non-repatriable demat account cannot be converted to a repatriable demat account.
Yes, trading through a non-repatriable demat account is subject to certain restrictions and regulatory guidelines.
No, joint accounts cannot be opened as non-repatriable demat accounts.
Regulations generally prohibit NRIs from opening joint trading accounts with resident Indians. NRIs may hold joint accounts only with other NRIs through authorized depository participants. Such accounts must link to NRE or NRO bank accounts and comply with FEMA and RBI rules.
A Portfolio Investment Scheme (PIS) registration is not mandatory to open an NRO Demat account for non-repatriable investments. PIS is required only when repatriation of sale proceeds is desired. NRIs opening NRO Demat for domestic investment can proceed without PIS, linking it to their NRO bank account per RBI norms.
NRIs can sell shares by placing orders through an Indian broker’s trading platform linked to their NRE or NRO Demat account. They log in online or submit instructions, and trades settle per exchange norms. Proceeds credit the linked bank account; repatriation requires PIS registration and adherence to RBI limits.
Only Non-Resident Indians (NRIs), Persons of Indian Origin (PIOs), or Overseas Citizens of India (OCIs) can open a non-repatriable Demat account in India. They must maintain a fully registered NRO bank account, linked to the Demat. Resident Indians and entities cannot open these accounts, subject to RBI and SEBI regulations.
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