Is it mandatory to convert normal savings account to NRO/NRE account if there is no money to deposit from outside India?
The answer to that question is ‘no’. You can reside in one country and continue operating a bank account in India. You would be required to intimate the Bank of change in your residence, after which the bank will ask you to convert the account from INR to NRO/NRE/SNRR.
What happens if I don’t convert my savings account to NRO account?
As per FEMA rules, the penalty for not converting resident account to an NRO account is up to 3 times the amount involved in it or Rs 2 lakh when the sum is not quantifiable. A daily penalty of Rs 5,000 will also be charged from the 1st day of intervention until the penalty is paid.
Is it compulsory to convert savings account to NRO?
You must convert all your savings (money earned abroad) to a Non-Resident External Account (NRE) or Non-Resident Ordinary (NRO) account. Therefore, continuing to use the savings account in the home country can attract hefty penalties. Opening an NRE or NRO account is, hence, a viable option for Non-Resident Indians.
Can I transfer money from normal savings account to NRO account?
As per the RBI, it’s mandatory for NRIs to open an NRI bank account to conduct financial transactions in India. Can I transfer money from normal savings account to NRO account? Yes, you can transfer money from a normal resident account to NRO account.
What’s the penalty for keeping savings accounts and deposit accounts as an NRI?
There is no specific penalty provided for not converting an ordinary savings account into a non-resident ordinary account.
Is NRE NRO account mandatory?
Having an NRE or NRO account is necessary if you want to invest money in India or to collect the income generated in India in INR once you become an NRI. NRO (savings/current) account can be opened for the purpose of putting through bona fide transactions denominated in INR.
Can I transfer money from normal savings account to NRE account?
You cannot transfer money to a NRE account from a savings account in India. However, you can transfer money from NRO to NRE account. You can also transfer money from one NRE account to another.
When should I convert my account to NRO?
It is required to convert your resident bank account to NRO account soon after your resident status changes to NRI as per income tax law in India. If you are in India, you could visit the bank branch and fill the forms and submit supporting documents for this conversion.
Can I convert SBI saving account to NRO account?
Ans : No, you cannot convert your existing Resident Indian Savings Bank account into NRE / NRO account with this facility. However, you can re-designate your existing account into NRO account.
Can my parents deposit money in NRO account?
Gift received from a close relative (your father qualifies as a close relative of the son) does not attract any tax as per Indian tax laws. Hence, your father can deposit the money directly into your NRO bank account or remit it to your US bank account.
How long can NRE account be maintained?
If you fail to convert your NRE account within 3 months of the return, it will be considered as a violation of Foreign Exchange Management Act (FEMA) and attract a penalty.
Is money transfer from NRE account to savings account is taxable?
Benefits of NRE account
Exempt from Taxes: The interest earned on the principal amount in an NRE savings account is tax free. Free and easy transferability: If you wish, you can transfer both the principal amount and the interest from an NRE account to an account in a foreign bank without any restrictions.
What happens to my FD if I become NRI?
It is mandatory: As per the Foreign Exchange Management Act (FEMA) guidelines, NRIs cannot hold resident FDs. They must convert it to an NRO deposit account. There is a penalty if you do not get the conversion done.
How long can I maintain NRE account after returning to India?
You cannot maintain your NRE account and NRE FDs when you are an RNOR. You need to convert your NRE account to resident account immediately upon returning to India. You need to convert these accounts to resident accounts within a reasonable period of time. The reasonable period can be assumed as 3 months.
How can I avoid tax on my NRO account?
By investing in mutual funds, especially if the amount is a large sum of money, NRI’s may be entirely exempted from TDS or may have to pay it at a rate which is much reduced. As a result, the savings they make from income earned on Indian soil will be far more than usual.
Which bank is best for NRO account in India?
Top 10 NRO Banks in India
| Bank Name | Regular Interest Rates | Minimum Balance |
|---|---|---|
| Axis Bank | 2.70% – 5.50% | Rs. 10,000 – Rs. 10 lakhs |
| Bank of Baroda | 2.90% – 5.30% | Rs. 1,000 |
| Citi Bank | 2.75% – 3.90% | Rs. 2 lakhs |
| DBS Bank | 3.00% – 5.00% | Rs. 50,000 |
Who can deposit money in NRO account?
A Non-Resident Ordinary (NRO) Account is an NRI account denominated in Indian rupee. Through this NRI bank account, one can manage the income they earn in India. An NRI can deposit the dividend, interest, rest, and other income that they earn in India in this account.
Can I transfer money to NRO account from abroad?
Yes, you can transfer money to an NRO account from abroad. However, due to the fees and exchange rate margins associated with sending money from USD to INR, we recommend using a money transfer service instead.
Is there any tax on NRO account?
NRO Account Taxation
The earning received through your NRO account is taxable at 30 % plus applicable surcharge and cess.
Can I deposit Indian rupees in my NRO account?
Deposit / Withdrawal of Funds
Funds originating from a foreign country (foreign currency) can be deposited in both NRE and NRO accounts. However, funds originating in India i.e. in Indian Rupees or INR can be deposited only in NRO Accounts and not an NRE Account.
Can I have both NRE and NRO account?
Yes, an individual can open both NRE and NRO accounts to meet his needs. If you have any income arising in India, you can receive it in NRO account, and if you want to park your earnings abroad in India, you can open an NRE account.
Is money in NRO account Repatriable?
Balances in the NRO account are not freely repatriable. But the RBI does allow NRIs to remit up to USD 1 million per financial year from the NRO account, provided you follow certain procedure.
How much money can be transferred from NRO to NRE account?
USD 1 million a year
The Reserve Bank of India allows the transfer of funds up to USD 1 million a year from an NRO to an NRE account. Here is a list of documents you will require if you are planning NRO to NRE transfer of funds: A signed cheque for the transfer of funds from NRO to NRE account. FEMA declaration.
What is the maximum amount that can be repatriated from NRO account?
$1 million
1. From NRO to overseas account: Repatriation up to $1 million or equivalent net of applicable taxes in a financial year is permitted, for bonafide purposes, subject to the submission of necessary documents as applicable.
Can I deposit Indian Cheque in NRE account?
You cannot deposit Indian earnings in an NRE account.