Most NRIs have NRE and NRO accounts, but there are still some questions that remain unclear. Did you know that money from an NRO account is also repatriable with some paperwork?
Ideal for depositing funds earned abroad. The best part? You can repatriate your money back home without any restrictions.
Got leftover rupees from before you moved overseas? An NRO account lets you manage those funds and any income you earn in India. Repatriation is a bit more regulated here, but you'll still enjoy a variety of investment options.
| Parameter | NRO Accounts | NRE Accounts |
|---|---|---|
| Repatriability | Not easily repatriable. Up to 1 million USD p.a. with additional paperwork | No restriction. Unlimited repatriability. |
| Taxation | Interest earned taxable, tax according to income tax rates in India | Not taxable in India but might be taxable in country of residence (taxable in US & EU) |
| Deposit and Withdrawal | Income generated in India, abroad as well from NRE | Only from overseas & NRE Account. Transfers from your NRO account subject to documentation |
| Joint Holding | Joint NRO a/c with an NRI as well as a resident Indian | Joint NRE account with another NRI only |
Got questions about NRE and/or NRO accounts, taxation on these accounts or any other investment topic? Schedule a free consultation with us today!
"If the goal is easy repatriation (i.e., the ability to transfer funds back to your country), an NRE account is better since it offers full repeatability."
"If the goal is to manage income earned within India, such as rent or dividends, or open a joint account with a resident Indian relative, an NRO account is better as it has no restriction for deposits."
As an NRI, the choice between an NRE or NRO account can significantly influence your financial growth and post-tax investment returns. When making this decision, it's essential to consider several key factors: ease of fund repatriation, repatriation limits, tax implications in both India and your country of residence, deposit terms, and the possibility of holding a joint account with family members in India.
Have you assessed whether your current NRE/NRO accounts and the investments made from these accounts align with your broader financial goals?
It's crucial to ensure that your financial strategies are in harmony with your long-term objectives and comply with relevant tax regulations.