NRI Accounts -- NRE, NRO and FCNR

1. Non-Resident (External) Rupee Account (NRE Account)

NRIs, PIOs OCBs are eligible to open NRE accounts. Savings account, current, recurring or fixed deposit accounts as may be. Balances held in NRE accounts can be repatriated abroad freely. As a result, funds abroad or local funds which can otherwise be remitted abroad to the account holder the account NRE deposits can be transmitted. However, NRE account held jointly with residents may not be. Other NRIs / PIOs are permitted with the joint operation. Power of attorney to handle accounts may be given to residents. Attorney holder outside India funds held in accounts under any circumstances not to repatriate or account holder can pay the gift.

Funds held in NRE accounts freely transferred to FCNR accounts of one account holder can be. Similarly, FCNR accounts, funds held in NRE accounts for the same account holders can be moved. Fixed deposit rates of interest on NRE account is placed under NRO deposits generally have a high rate of interest. Under section 10 (4) (ii) of the Income Tax Act other person resident outside India NRE account interest income is not taxable in India.

2. Ordinary Non-Resident Rupee Account (NRO accounts)

These are rupee denominated accounts and savings, recurring or fixed deposits present as can be. In India, these accounts can be opened jointly with residents. When an Indian national / citizen of Indian origin in India out of the country, employment, etc. to collect leaves, his normal current bank account in India can be designated as non-resident account.

NRO account can send money overseas but not in the money used only for local payments. For remittance outside India does not qualify under the exchange control regulations, money, deposited in NRO accounts is required. NRO account can not be converted to an NRE or NRO funds not be transferred to a special permit from the Reserve Bank and all current required funding, which is a complex process of opening new NRE account of the evidence NRE account can do without.

NRO accounts can be held jointly with residents. NRO accounts payable is the same as resident accounts. Interest income from NRO accounts is taxable. TDS 30% tax rate plus education cess (the resident accounts TDS rate is 10% plus education cess) is cut.

3. Foreign Currency (Non Resident) Account (FCNR accounts)

NRIs / PIOs / OCBs to the U.S. dollar, Pound Sterling, Deutsche Mark, Japanese Yen and Euro in such accounts are allowed. (I) one year and above but less than two years (two) two years and more but three years and (iii) three years leas: account for any of the three maturity as term deposit can be in only just opened.

Interest and repayment of deposits in the foreign currency account is maintained. NRI interest income is tax free in the hands of a non-resident status or a resident until he under the Indian tax law maintains the status of residents generally do not.

Depositor Indian rupees, converted at the rate paid on the date of purchase can get paid. FCNR accounts local disbursements including payment for exports from India, repatriation of funds abroad and investments in India by foreign investment guidelines, can be used to make.


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