Non-Resident Ordinary Account (NRO ACCOUNT)

Non-Resident Ordinary Account (NRO ACCOUNT)

Non Resident Ordinary Account
Non Resident Ordinary Account

In this blog we will highlight only relevant points on NRO Account and NRE Account. We will cover which account is suitable for NRI, what are the restrictions on transactions on these two separate accounts and what are the tax implications of operating such accounts.

Non-Resident Ordinary Account also called NRO in short is suitable for those NRI’s who wants to let the income earned in India remain in India. By Income it could be rent, dividends etc or in case when NRI wants to open account with resident Indian (close relative).

NRO accounts can be held with NRI and resident Indians (close relatives). Funds in NRO accounts is repatriable however there are certain conditions.

NRO Accounts can be opened in the form of savings, time deposits, or time deposits. NRO accounts can also be opened by people from India (PIO) and foreign citizens of India (OCI). NRO accounts have limited reparability.

This means that an authorized remittance from NRO can be up to US $ 1 million after doing business with a certificate from a certified public accountant, excluding taxes applicable for the fiscal year. For advice, you can contact the CA Service Online.

TAX VIC can help you with same. As far as tax implication is concerned interest earned in NRO account and credit balances are subject to respective income tax bracket and are also subject to applicable wealth and gift tax.

Non Resident External Account ( NRE ACCOUNT)

Non Resident External or in short NRE accounts is suitable for those NRI’s who wants to save in Indian Rupees for income that earned outside India  or in case he/she wants joint account with another NRI as NRE account can be jointly held with another NRI but not with resident Indian , Funds in NRE accounts is freely repatriable.

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An NRE account can be opened in the form of a savings, current or fixed deposit account. Income earned in India such as rent, dividend etc cannot be deposited in NRE account. As far as tax implication is concerned, NRE account is Tax free (no Income tax, wealth tax and gift tax) in India.


  • There can be conversion option for you if you already have an account in India.The non-resident Indian has an option to convert his/her existing  account in India into NRO account or open a brand new NRO account. Documentary proof that the account holder is a non-resident Indian as defined in Indian tax laws is a prerequisite for opening NRI accounts.
  • In case of conversion of resident account into NRO account by NRI, a form needs to be filled and signed by all account holders. Documents like as proof of identity, NRI status proof, proof of foreign address and two passport photographs need to be submitted. For new accounts, NRI will need to fill out a similar KYC document on the new account opening form.

  • Proof of residence abroad could be documents provided by employer of the NRI, student status proof, dependent visa status, or a copy of resident permit in the foreign destination. This proof must be proved by an Indian embassy, ​​notary public, or a branch of an Indian bank with an overseas branch.

  • Banks will also ask for proof of financial transactions abroad, it can be in the form of cheque drawn on an overseas account or credit card statement that is latest that is not older than six months old.

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