Savings Bank Account in India – Need to convert to NRO
Documents Required to Convert Resident Savings Account to NRO Savings Account
- Identity proof – Passport, Aadhaar card, Voter ID, Driver’s license, etc.
- Proof of NRI status – Valid visa, work permit, OCI/PIO card, etc.
- Foreign address proof – Utility bills, telephone address, etc.
- Recent passport size photographs.
Is it mandatory 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 convert savings account to NRO account?
Yes. You can convert your Resident Account to NRO Account. According to FEMA guidelines, when an individual changes his residential status from ‘Resident’ to ‘Non-Resident’, he must re-designate his resident account as an NRO (Non-Resident Ordinary) account. Along with the NRO account you can open NRE account.
Can I convert my existing bank account to NRO account?
However, you can only convert a resident bank account to an NRO account. It is because funds can’t be transferred from the resident bank account to an NRE account. To convert the resident account to an NRE account, you will have to close the account and open a new NRE account.
What happens if savings account is not converted to NRO?
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 mandatory to change account to NRI?
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.
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.
When can I convert my savings 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.
How can I convert my saving account to NRI?
Documents Required to Convert Resident Savings Account to NRO Savings Account
- Identity proof – Passport, Aadhaar card, Voter ID, Driver’s license, etc.
- Proof of NRI status – Valid visa, work permit, OCI/PIO card, etc.
- Foreign address proof – Utility bills, telephone address, etc.
- Recent passport size photographs.
Can I convert my HDFC savings account to NRO account?
HDFC Bank allows conversion of your existing Resident account to NRO account by simply emailing the required documents to the Branch via your register email id.
What is the tax rate for NRO account?
30 %
The earning received through your NRO account is taxable at 30 % plus applicable surcharge and cess. Though there is an NRO taxation implication, you can benefit from the DTAA Agreement.
What is the benefit of NRO account?
Benefits of NRO account
You can deposit these securely in an NRO account and use the funds to manage your rupee expenses. Invest with ease: An NRO account makes it easy for you to invest in mutual funds and Indian bonds. Get loans: You can use NRO fixed deposits as collaterals against loans.
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.
Can I have both NRE and savings account?
As per RBI Regulations, a Non-Resident Indian (NRI) cannot open and operate a regular resident Savings Account and further, any account should be converted into NRI Account by the bank before one gets NRI status.
Is NRO account mandatory?
It is essential for an NRI to open Non-Resident External (NRE) or Non-Resident Ordinary (NRO) Account, to do any banking transactions in India. However, depending upon the transactional requirements of the NRI/PIO, he/she can decide to open either an NRE or NRO Account, or even both.
How can I avoid tax on my NRO account?
A taxpayer is allowed to claim a deduction of ₹10,000 from interest income on saving account interest under Section 80TTA. NRIs are also eligible to claim this deduction. Taxpayers are allowed to claim TDS deducted, which is tax already paid on income earned, against the total tax payable on their aggregate income.
Which is better NRE or NRO?
You should opt for NRE Accounts if you want to hold or maintain your overseas earnings in Indian currency. NRE Accounts are also suitable if you wish to keep your savings liquid. You should opt for NRO Accounts if you want to save your earnings from India in Indian currency itself.
Can I transfer money to NRO account from India?
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 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.
Can I withdraw money from NRO account outside India?
Here, both the non-resident and resident Indians can be joint account holders. The account also allows you to receive income in any currency, Indian or foreign. However, you can only withdraw funds in Indian rupees from an NRO account.
What is the difference between NRO and NRI?
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 opened in India in the name of an NRI, to manage the income earned by him in India. These incomes include rent, dividend, pension, interest, etc.
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.
Which bank is best for NRO account in India?
Top 10 NRO Banks in India
| Bank Name | Regular Interest Rates | Minimum Balance |
|---|---|---|
| HDFC Bank | 2.75% – 5.50% | Metro Areas – Rs. 10,000 Semi-urban Areas – Rs. 5,000 |
| ICICI Bank | 2.50% – 5.45% | Rs. 10,000 |
| Kotak Mahindra Bank | 2.75% – 4.50% | Rs. 10,000 |
| RBL Bank | 3.25% – 6.25% | Rs. 50,000 |