NRO Account means Non-Resident Ordinary Rupee Account Scheme . NRO can be opened by NRI.
NRI is a person resident outside India who is a citizen of India.
Nowadays there is more craze to settle in Canada , Germany ,Europe and the US . Citizens leaving countries without having clear understanding what they will do with their resident savings account or demat account. This post will give you an idea about NRO accounts .
Type of Accounts:
This account is opened in an Indian currency account .One can open NRO account as Savings, Current, Recurring, Fixed Deposit.
When a resident Indian becomes a person resident outside India, his existing resident account should be designated as NRO account.
Likewise NRO accounts may be designated as resident accounts on the return of the account holder to India for any purpose indicating his intention to stay in India for an uncertain period.
Income earned in this account is taxable in India .
Permissible Debit :
The account can be debited for the purpose of local payments, transfers to other NRO accounts or remittance of current income abroad.Apart from these, 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.
Funds can be transferred to the NRE account within this USD 1 Million facility.
Permissible Credits :
Inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permissible credits to NRO account. Rupee gift/ loan made by a resident to a NRI/ PIO relative within the limits prescribed under the Liberalised Remittance Scheme may be credited to the latter’s NRO account.
Repatriability : Not repatriable except for all current income.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.
Post Offices in India may maintain savings bank accounts in the names of persons resident outside India and allow operations on these accounts subject to the same terms and conditions as are applicable to NRO accounts maintained with an authorised dealer/ authorised bank.
Apart from this, taxpayers should check their residential status as per income tax act for each year and need to file his/her income tax return in India. Based on residential status he will get benefit of DTAA of his resident country and in case he/she has paid taxes outside the home country then they can claim the same in his/her resident country by way of foreign tax credit (FTC).
Do consult a professional and your bank before initiating change in your bank account to NRO or vice versa .
You may have similar question related to PAN for NRI . Do read our post Whether PAN is mandatory for Non Resident Payment? in this regard .
Author
-
by
-
