Why a bank asks, and what actually satisfies it
Banks everywhere are required to understand the source of funds behind large or unusual transfers. When a sizeable sum lands from abroad, the compliance team's job is to be able to say, on the record, that they checked where it came from and were satisfied it was legitimate. Until they can write that down, the safe option for them is to hold the money.
What satisfies that check is a clear, evidenced story — not just a category like "savings", but a traceable path from a specific origin to the money that arrived. A chartered accountant's certificate provides exactly that: it names the source, points to the documents that prove it, and confirms the funds were declared and accounted for in India. Because it comes from a regulated professional and carries a UDIN the bank can verify on ICAI's portal, it carries weight a customer's own letter does not.
The certificate does not replace the bank's own forms; it sits behind them, giving the compliance officer the documented basis they need to release the funds and close the review.
Tracing the three common sources
Most queried transfers trace back to one of three origins, and the CA evidences each one differently.
| Source of funds | What the CA ties it to |
|---|---|
| Property sale | Sale deed, capital-gains in the filed ITR, TDS / 15CA-15CB |
| Inheritance | Will or succession certificate, the estate's records |
| Accumulated savings | Years of filed ITRs, bank and investment statements |
For a property sale, the certificate links the sale deed and consideration to the capital gains declared in your return and to the tax deducted and remittance forms (Form 15CA / 15CB) used when the proceeds moved abroad. For an inheritance, it ties the funds to the will or succession certificate and explains that an inheritance is a transfer of existing assets, not fresh income. For accumulated savings, it shows the money built up over years of declared income — drawing on successive returns and the statements behind them — rather than appearing suddenly.
The aim is the same in each case: a path the compliance officer can follow from origin to wire, with a document at every step.
The gift or down-payment letter from Indian parents
A common version of this question arises when parents in India send money to a child abroad — often to help with a house deposit. The receiving bank, and sometimes a mortgage lender at the same time, wants to know that the money is a genuine gift and that the parents had the means to give it.
Here the CA prepares a certificate covering the giver. It confirms who the parents are, that the gift is being made out of their own funds, and that those funds are accounted for in their filed returns and bank records — so the deposit is not a disguised loan or money of unexplained origin. Where the parents are funding a property purchase, lenders frequently also want a short declaration that the gift carries no obligation to repay; the CA's certificate establishes the source and means, and we help line that declaration up alongside it.
Because the certificate is issued on letterhead with a UDIN and ties back to the parents' returns, both the bank holding the transfer and any lender involved are looking at the same verifiable basis for the money.
A worked example: proceeds of a Pune flat held in the UK
Vikram, an NRI in London, sold a flat in Pune and remitted the proceeds to his UK account to add to a house deposit. The amount was large enough that his UK bank flagged it and asked him to evidence the source before the funds could be used. His own email explaining "this is from selling my Indian property" did not close the query.
A chartered accountant assembles the chain: the registered sale deed showing the consideration, the capital gains computed and declared in Vikram's Indian return, the TDS deducted on the sale, and the Form 15CA / 15CB used when the money was remitted abroad. The CA then issues a source-of-funds certificate that walks from the sale to the exact transfer the bank queried, names each document, and confirms the gains were declared in India. It goes out on letterhead with a UDIN.
The UK bank's compliance team verifies the UDIN on ICAI's portal, sees a documented path from a property sale that was taxed and reported in India, and releases the funds. The precise evidence a given bank wants, and how far back it looks, varies with the institution and the size of the transfer, so the certificate is built around the bank's specific query rather than a generic template.