Managing finances in two different countries becomes overwhelming for millions of Indians who live overseas. NRIs frequently keep investments, real estate, rent, or savings in India in addition to earning money abroad, all of which call for a safe and legal method of handling money. Specialized banking solutions are useful in this situation.
Through well-structured NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts, TJSB Bank provides NRIs with an easy approach to handle both their foreign and Indian income, guaranteeing convenience, clarity, and regulatory peace of mind.
Why NRIs Need Specialized Accounts?
After relocating overseas, NRIs are unable to maintain ordinary resident savings accounts. They require accounts specifically designed for non-resident status in order to:
- Safely bring earnings from abroad into India
- Repatriation of funds in accordance with RBI regulations
- Income earned in India is properly taxed
These particular demands are met by NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts, however each has a distinct function.
Who is eligible to open an NRE Account?
Non- resident Indians (NRIs) and Person of Indian Origin (PIOs) are permitted to open and maintain NRE account. The account should be opened by the non- resident account holder himself and not by the holder of the power of attorney in India.
Proceeds of remittances to India in any permitted currency is permitted for an NRE (Non-Resident External) Account. It is held in Indian Rupees and is only financed by transfers from another NRE or FCNR account or inward remittances in freely convertible foreign currency.
Essential Aspects:
- Can be opened by NRI, PIO, or OCI individuals, such as Indian citizens employed by foreign governments or international organizations, crew members, professionals stationed abroad, and students studying abroad.
- Fully repatriable, meaning that principal and interest can be transferred back abroad
- Income earned in the accounts is exempt from income tax and balances exempt from wealth tax
- Can be opened in Savings, Current, Recurring, Fixed Deposit.
NRE vs NRO: The Key Differences
NRO (Non-Resident Ordinary) accounts are designed for money earned in India, whereas NRE accounts are intended for earnings obtained outside.
1. Permissible credits:
NRE -
- Inward remittance from outside India.
- Interest accruing on the account.
- Interest on investment, transfer from other NRE/ FCNR(B) accounts.
- Maturity proceeds of investments (if such investments were made from this account or through inward remittance).
NRO -
- Inward remittances from outside India.
- Legitimate dues in India.
- Transfers from other NRO accounts.
- Rupee gift/ loan made by a resident to a NRI/ PIO relative within the limits prescribed under the Liberalised Remittance Scheme (LRS).
2. Permissible debits:
NRE -
- Local disbursements
- Remittance outside India
- Transfer to other NRE/ FCNR(B) accounts
- Investments in India.
NRO -
- Local payments.
- Transfers to other NRO accounts or remittance of current income abroad.
- Balances in the NRO account cannot be repatriated abroad except by NRIs and PIOs up to USD 1 million, subject to conditions specified in Foreign Exchange Management (Remittance of Assets) Regulations, 2016.
3. Taxation:
- NRE - Income earned in the accounts is exempt from income tax.
- NRO - Income earned in the accounts is taxable.
4. Repatriation:
- NRE - Repatriable
- NRO - Not Repatriable except all current income and balances in an NRO account of NRIs/
PIOs are remittable up to USD 1 (one) million per financial year (April-March) along
with their other eligible assets, subject to income tax compliance.
5. Account Funding:
- NRE - NRE/FCNR transfers or only foreign currency remittances.
- NRO - Accepts both Indian revenue and remittances from overseas.
Which Account Should You Choose?
Select NRE if:
- Your primary source of income is from overseas.
- You're looking for tax-free interest.
- You must be allowed to return home.
If you have sources of income within India, you should choose NRO (Non-Resident Ordinary):
- You have to keep track of your pension, rent, dividends, and other domestic credits.
- Limited repatriation is adequate for your requirements.
Many NRIs maintain both accounts concurrently in order to effectively manage all sources of income.
How to Open an Account?
With TJSB Bank, opening an NRE or NRO account is simple. It can be opened through:
- Download account opening form and fill up details.
- Provide self-attested KYC documents (ID proof, address proof, photos) and overseas address proof.
- Get necessary attestations (like by Indian Embassy/Notary/Banker abroad) as mentioned in the form.
- Form submission with required documents.
- In-person verification or attestation for overseas applicants.
- Remittances from abroad or transferred from existing NRE/FCNR accounts.
Conclusion
Managing money internationally doesn't have to be difficult. NRIs can confidently arrange their foreign and Indian income with the appropriate NRE and NRO accounts. By providing accounts that make repatriation, taxes, and daily money management easier, TJSB Bank guarantees a seamless account opening experience, ensuring your funds stay as global as your lifestyle.
