NRO Account

NRO stands for Non Resident Ordinary Account

Account Opening

  • NRO accounts may be opened / maintained in the form of current, savings, recurring or fixed deposit accounts.
  • These are Rupee accounts opened for the purpose of depositing income earned in India once you move overseas.
  • These accounts can be held jointly with NRI and /or indian residents
  • Opening of NRO accounts in the name of individuals/ entities of Pakistan nationality/ ownership, entities of Bangladesh ownership requires prior approval of Reserve Bank of India.

Finance

  • The funds, in this account, cannot be repatriated outside India without prior permission of RBI. Interest, earned on these accounts, is, however, eligible for repatriation outside India, net of Indian taxes .
  • The general rate of withholding tax for NRO interest on savings and deposits is 30% (plus applicable surcharge and cess). In case the customer has a valid Tax Residency Certificate (TRC), Form 10F and PAN , the benefit of DTAA can be extended and a lower rate of withholding tax will be applicable.

Credit

  • Permissible credits to NRO account are transfers from rupee accounts of non-resident banks, remittances received in permitted currency from outside India through normal banking channels, permitted currency tendered by account holder during his temporary visit to India, legitimate dues in India of the account holder like current income like rent, dividend, pension, interest, etc., sale proceeds of assets including immovable property acquired out of rupee/foreign currency funds or by way of legacy/ inheritance.

Debit

  • Eligible debits include all local payments in rupees including payments for investments as specified by the Reserve Bank and remittance outside India of current income like rent, dividend, pension, interest, etc., net of applicable taxes, of the account holder.

Remittance

  • NRI/PIO may remit from the balances held in NRO account an amount not exceeding USD one million per financial year, subject to payment of applicable taxes.
  • TDS is applicable at the rate of 30.90 % on these accounts.

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Know the process to open NRE and NRO accounts

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