If you are an Indian who is staying abroad, definitely you will be looking for various options where you can send money to your native country. With so many option available, which one is the best and the safest? The NRI account is one option which has several benefits to the account. Among all the benefits that are offered with this account, these are the three factors which are the most important one that an NRI should know:
Types of NRI account
When an NRI opens an account, you will have different types of options available. The two types of accounts available that is the Non Residing External a/c which is also known as the NRE account and the Non Residing Ordinary a/c which is also known as the NRO account. There are few similarities between these two accounts that are both the account is opened either as savings or current account where the denomination will be held as Indian Rupee accounts. Additionally, you will require to maintain at least a minimum average of Rs. 75,000 INR per month in both the accounts.
Difference between the two accounts
Both these accounts come under the NRI account and have different features. The NRI account can be open either by individually or jointly with another NRI. Whereas the NRO account can be opened individually with anyone, however, if you are opening the account with another joinee then it has to be a local Indian resident only. The NRE account makes a better option when it comes to reparability because you can repatriate any amount of funds from the NRE account as compared to the NRO account which only allows you a limit of 1 million USD per financial year. The NRE account is tax free in India whereas the NRO account is taxable, in terms of premium earned and credit equalizations.
Transactions of the accounts
When it comes with depositing funds, only foreign currencies can be deposited in the NRE account and the NRO account, you can deposit both Indian and foreign currencies. Therefore, one of the benefits to these accounts is withdrawals. The withdrawal from the NRE account allows Indian local currency where as the NRO account allows Indian rupees. At the time of transferring funds between the two accounts, it can be a bit sophisticated. Transferring funds from NRE account to an NRO account is easier. Therefore, funds cannot be transferred from the NRO account to the NRE account.
It is important to do a thorough study before opening an NRE or and NRO account to understand the features and benefits. This will help you understand and plan your finances respectively. Additionally, it will help you create an proper financial plan for the future.
We are a Professional Tax advisor in India, Specializing in International / NRI taxation, servicing Indians across the World and also provide Tax services. To know more visit at www.taxassistindia.com
Types of NRI account
When an NRI opens an account, you will have different types of options available. The two types of accounts available that is the Non Residing External a/c which is also known as the NRE account and the Non Residing Ordinary a/c which is also known as the NRO account. There are few similarities between these two accounts that are both the account is opened either as savings or current account where the denomination will be held as Indian Rupee accounts. Additionally, you will require to maintain at least a minimum average of Rs. 75,000 INR per month in both the accounts.
Difference between the two accounts
Both these accounts come under the NRI account and have different features. The NRI account can be open either by individually or jointly with another NRI. Whereas the NRO account can be opened individually with anyone, however, if you are opening the account with another joinee then it has to be a local Indian resident only. The NRE account makes a better option when it comes to reparability because you can repatriate any amount of funds from the NRE account as compared to the NRO account which only allows you a limit of 1 million USD per financial year. The NRE account is tax free in India whereas the NRO account is taxable, in terms of premium earned and credit equalizations.
Transactions of the accounts
When it comes with depositing funds, only foreign currencies can be deposited in the NRE account and the NRO account, you can deposit both Indian and foreign currencies. Therefore, one of the benefits to these accounts is withdrawals. The withdrawal from the NRE account allows Indian local currency where as the NRO account allows Indian rupees. At the time of transferring funds between the two accounts, it can be a bit sophisticated. Transferring funds from NRE account to an NRO account is easier. Therefore, funds cannot be transferred from the NRO account to the NRE account.
It is important to do a thorough study before opening an NRE or and NRO account to understand the features and benefits. This will help you understand and plan your finances respectively. Additionally, it will help you create an proper financial plan for the future.
We are a Professional Tax advisor in India, Specializing in International / NRI taxation, servicing Indians across the World and also provide Tax services. To know more visit at www.taxassistindia.com
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