Nre Account

There are several options available to NRIs planning to open an account at a bank in India: Non-Resident Ordinary (NRO) Savings Account, an account of NRO fixed deposit, non-resident external (NRE) account of savings, NRE fixed deposit accounts and foreign currency non resident (FCNR) fixed deposit account. Each of these account types has advantages and disadvantages. Understanding them can help you make a choice. Factors to consider:

• Source of funds in the account: the resources must be deposited in these accounts from sources in India or abroad?
• Currency in which the account is maintained and the risks associated exchange rate if you want to convert foreign currency: Do you intend to repatriate the money back in your home country at some point?
• Repatriability: Can you convert foreign currency?
• Taxation in India on the principal and interest earned: Do you pay taxes for money in India?
• Capacity for an Indian who is to manage the account of a mandate: Can a family member in India to manage the account with a warrant card issued by the bank?
• Then the account of an Indian resident as joint account holder? Note that this is different than having a family have the ability to withdraw funds from the account as Mandated.

Key aspects of NRE accounts are as follows:

• NRE accounts are maintained in rupees. This means that foreign currency is converted into Indian rupees at the exchange rate in force abroad when the money is deposited into the account.
• The main source of funds deposited in NRE accounts should be your income abroad. In other words, you can not deposit money from sources in India as the rent of the house or pension account.
• The principal amount and interest are fully repatriable (can be converted into foreign currency). The conversion back to foreign currency shall be at the rate of exchange in effect.
• Interest income earned on money in NRE account is not taxable in India. However, it may be taxable in your home country as the country's tax rules.
• You can have NRIs other joint account holders on NRE accounts. Indian residents can not hold a joint account with NRI NRE accounts.

Key aspects of the NRO accounts are the following:

• NRO accounts are maintained in rupees. This means that foreign currency is converted into Indian rupees at the exchange rate in force abroad when the money is deposited into the account.
• The source of funds deposited in NRO accounts can be in India or abroad. NRO accounts are suitable for NRI who had earnings in India earlier and later became NRIs and NRIs with income from sources in India as the house rent, pensions, etc. you also file the money from your earnings abroad or transfer money from a NRE account to NRO account.
• Current income such as rents, dividends, pensions can be transferred abroad through the NRO account. The funds can be repatriated from the NRO are subject to a maximum of $ 1 million per fiscal year. Repatriability is subject to conditions.
• Interest income earned on money in NRO account is taxable in India.
• You may have other NRIs resident Indians as joint account holders on NRO accounts.

The main aspects of FCNR accounts are:

• FCNR accounts must be opened and maintained in foreign currency itself.
• The source of funds deposited in FCNR accounts must be of foreign origin. They can also be your NRE or FCNR accounts.
• The principal amount and interest are fully repatriable
• Interest income earned on money in a FCNR account is non-ta.