NRE vs NROPersons with NRI status (Non Resident Indians) can choose between two options when opening a account in India, which is an NRE or an NRO account. Any NRI interested in opening a bank account at an Indian bank could use the about the variance between these two account types. The most basic use of these accounts is for money repatriation from the individual’s overseas bank.A NRE account is a Non-Resident External bank account denominated in rupees.
It could be a savings, current or a fixed deposit account, and is opened by depositing money (foreign currency) at time of opening. This can be done in notes, or by using traveler’s checks.
![]()
Now you can add, change, cancel or inquire a nominee in your NRE / NRO savings bank or NRE / NRO / FCNR (B) deposit accounts through Internet Banking (INB) facility. Please click here to know more. Activation of Debit card and generation of PIN instantly through Internet Banking. Please click here to know more. Non Resident Indian (NRIs) can hold and maintain FCNR, NRE and NRO types of accounts with banks in India. All the accounts differ depending on the need. Let us understand more and know when to.
Funds in this account can be feely sent to another country.A Non-Resident Ordinary account (NRO) is the usual bank account, but opened by an Indian national who intends to become a Non Resident Indian (NRI) while abroad. This account will accord most of the offered by the NRE account, but any repatriation carried out through this account should be filed to the RBI by filling in the necessary paperwork.Opening the accountA NRE account may be opened individually, or jointly with another NRI, without any approval provided the funds are transferred in a freely convertible currency.
A NRO account however, can also be jointly opened for rupee transactions without approval, but a joint account can be opened by a NRI with a resident.Which funds can be held and withdrawn from either account?Overseas remittances or local funds belonging to a NRI that would be sent to him can instead be credited to his NRE, or funds could be transferred from another NRE account maintained in India. NRE accounts allow only foreign currency deposits, and not rupees, although rupee withdrawals are permissible from this account.The NRO will hold funds that are not eligible to be sent abroad. However, an NRO account permits both foreign currency and rupee deposits, but withdrawals are only in rupees.Taxes on interest earnedInterest earned on a NRO account, as well as on the credit balances of this account, is taxed based on the account holder’s tax bracket. However, the interest accrued on a NRE account is wholly exempted from income tax, as well as wealth tax that would otherwise be charged on the credit balances of the account. Also, cash gifts to this account do not attract taxes.TransfersFunds can be transferred from a NRE to a NRO account, but funds transfer from a NRO to a NRE is not permissible.
Comments are closed.
|
Details
AuthorWrite something about yourself. No need to be fancy, just an overview. ArchivesCategories |