To India and want to avoid taxation liabilities. An NRE account can be opened if you want to transfer your foreign income If your total income includes income earned in India and you want to manage it within the country, you can opt for an NRO account. In case of an NRO account, if the deposit as well as the withdrawal is made in INR, there is no exchange rate risk involved whereas, in case of an NRE account, currency fluctuations make you prone to exchange rate risks.Withdrawals from both the accounts can be made only in INR.
However, income originating within India can be deposited only into the NRO account. Income originating outside India can be deposited into any of these accounts.However, there can be a joint NRE account only with another NRI. An NRI can open a joint NRO account with one or more NRIs or Indian citizens.In case of an NRO account, the interest amountĬan be repatriated however, in case of the principle amount, you can remit only up to USD 1 million in a financial year. In other words, you can transfer these amounts to a foreign account in case of an NRE account. The principle amount in an NRE account, and the interest accumulated thereon is open to repatriation.The interest earned on an NRO account is however taxable at 30% according to the Income Tax Act 1961. Neither the balance, nor the interest earned on these accounts is taxable. These incomes include rent, dividend, pension, interest, etc. Opened in India in the name of an NRI, to manage the income earned by him in India. An NRE account is a bank account opened in India in the name of an NRI, to park his foreign earnings whereas, an NRO account is a bank account.So, Mahesh explained further: The difference between NRE & NRO accounts However, Andrew still wasn’t satisfied with Mahesh’s answer. It is an account of an NRI to manage the income earned in IndiaĬan repatriate the interest amount, the principle amount can be repatriated within the set limitsĬan be opened by an NRI along with an Indian citizen or another NRIĬan deposit in foreign currency, and withdraw in Indian currencyĬan deposit in foreign as well as Indian currency, and withdraw in Indian currency It is an account of an NRI to transfer foreign earnings to India
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