What is an “NRI account”?
“NRI account” is a popular connotation for Indian accounts opened for NRIs. The types of accounts that an NRI can open in India are
NRE (Rupee Repatriable)
NRNR (Non-Resident (Rupee Deposit accounts)
NRO (Rupee Non Repatriable).
What happens when an NRI becomes Resident?
As per prevailing exchange control regulations, NRI is required to intimate his banker about change in his residential status immediately on returning to India. His Rupee accounts are immediately redesignated as resident Rupee accounts. Further, Rupee Term Deposits are continued at the contracted rate of interest till due date.
What are NRO accounts?
NRO account is a Rupee denominated account which is not-repatriable. This account is basically for your rupee funds generated in India. You can open either a SB account (liquid account provided with a check book) or a Fixed deposit.
Can I convert my Resident to NRO account?
Yes. You can convert your Resident Account to NRO Account.
According to FEMA guidelines, when an individual changes his residential status from ‘Resident’ to ‘Non-Resident’, he must re-designate his resident account as an NRO (Non-Resident Ordinary) account. Along with the NRO account you can open NRE account.
What are the special features of NRO account?
The funds, standing to the credit of this account, cannot be repatriated outside India in foreign exchange, without prior permission of the Reserve Bank of India. Interest, earned on these accounts, is, however, eligible for repatriation outside India, net of Indian taxes. The remittance of interest (net of taxes) will be permitted by the authorized dealer.
What are the conditions regarding repatriation of balances in NRO accounts?
Repatriation is allowed up to US dollars 1 million per calendar year for any purpose from the balances in NRO accounts subject to payment of applicable taxes.
The limit of US dollars 1 million includes sale proceeds of immovable properties held by NRIs / PIOs for a period of 10 years.
In case a property is sold after being held for less than 10 years, remittance can be made if the sale proceeds have been held by the NRI / PIO for the balance period.
Can the NRO Account be jointly held?
Yes, the NRO account can be jointly held, even with a resident Indian.
Can a mandate operate my NRO / NRE Account?
Yes, operation of account through a Power of Attorney (POA) holder is allowed. A POA holder can only issue INR cheques from NRE / NRO accounts for legitimate local payments.
POA holder however cannot
- Open / close accounts
- Gift funds from the account
- Give instructions regarding fixed deposits
- Give a request for change of address
- Repatriate any funds overseas
Can I provide for recurring payments through standing instructions?
Yes, you can give standing instructions to your banker to make recurring payments on behalf of the accountholder.
Can I have Internet Banking / Phone Banking to access this account from abroad?
Most of the banks give access to your account through our Internet Banking and Phone Banking facilities and the ATM cards are also provided.
Are the funds in the NRO account taxable?
Yes, the interest on NRO Savings Account is taxable and is also subject to tax deduction at source as per the applicable tax rates.
What currency is the NRO Term deposit maintained?
Your NRO Term deposit is maintained in Indian Rupees.
Are my NRO Term Deposit funds repatriable?
Interest earnings can be repatriated. In addition to this, remittance/s up to USD 1 million per calendar year from balances in NRO accounts subject to payment of applicable taxes is allowed for any purpose up to an aggregate value of USD 1 million.
Are my NRO funds repatriable?
Dividend, interest, pension, rent and other current income credited to this account are repatriable. Interest earnings can be repatriated. Remittance/s up to USD 1 million per calendar year from balances in NRO accounts subject to payment of applicable taxes is allowed for any purpose up to an aggregate value of USD 1 million.
What are NRE accounts?
NRE account is a Rupee denominated account which is fully repatriable. Funds into this account will have to be received from outside India. You can open either a SB account (liquid account provided with a check book) or a Fixed deposit. The minimum period for an NRE fixed deposit is 12 months.
What are the admissible debits and credits to NRE accounts?
Debits for local payments / investments are allowed freely. Credits to an account, of funds emanating from a local source would be permissible only if the funds are of a repatriable nature i.e. funds which are eligible to be remitted abroad.
What are the special features of NRE account?
The funds, standing to the credit of this account, as well as interest earned thereon, are remittable outside India in free foreign exchange, without permission of the RBI. The interest income is not subject to Indian Income-tax. Credits to the accounts should be in the form of remittance in foreign exchange from outside India, as well as other funds, which are eligible to be remitted outside India.
What currency is the NRE Term deposit maintained?
Your NRE Term deposit account is maintained in Indian Rupees.
Are my NRE funds repatriable?
Yes, both the principal and interest are freely repatriable.
Are the funds in the NRE Term Deposit account taxable?
Interest earned on the account is not taxable and is not subject to tax deduction at source.
What is the tenure of NRE Term Deposit?
The tenure of the Term deposit ranges from 1 to 5 years.