NRE-vs-NRO-Accounts

1. NRE vs NRO Accounts Essential Banking Choices for Non-Resident Indians For Non-Resident Indians (NRIs), choosing between NRE and NRO accounts is a crucial first step after moving abroad. While both are designed specifically for NRIs, they serve different purposes and offer distinct flexibility.

2. NRO Account: For Income in India Ideal for NRIs managing income originating from India through rent, dividends, or pensions. Rupee Account Dual Source Funding Non-repatriable with limited exceptions for fund transfers abroad. Receives funds from both India and overseas sources. Tax Implications Interest is taxable in India and subject to TDS deductions.

3. NRE Account: For Foreign Income Perfect for NRIs managing income earned abroad with full repatriation flexibility. Principal and interest amounts can be freely transferred internationally. Foreign Funds Only Full Repatriation Accepts funds exclusively from abroad or other NRE accounts4 not from Indian savings or NRO accounts. Complete freedom to transfer principal and interest amounts abroad without restrictions. Tax-Free Interest Interest earned is completely tax-free, ideal for maintaining liquidity while avoiding double taxation.

4. How to Decide Between the Two? Choose NRO Choose NRE Maintain Both Managing Indian income like rent, dividends, or pensions Earning abroad and seeking greater repatriation flexibility Use NRE for remittances and savings, NRO for Indian income Most NRIs maintain both accounts4using NRE for remittances and savings while managing Indian income through NRO. This dual approach ensures compliance and sound fund management on both sides.