NRO Account

Description

Features of an NRO Account:

1. Repatriation of Funds:
   • NRIs can transfer both interest and principal amounts from an NRO account abroad.
2. Principal Transfer Limit:
   • Depositors can transfer up to Rs 1 million principal amount annually after tax deductions.
3. Income Tax Rate:
   • The income tax rate on NRO accounts is 30% and deducted at source.
4. Deposits Sources:
   • NRI income in India, including rent, pensions, dividends, can be deposited in NRO accounts.
5. Loan Facilities:
   • NRIs can obtain loans against NRO accounts.
6. Global Management:
   • NRO accounts can be managed globally via internet banking and come with international debit cards.
7. Joint Account Holding:
   • Joint NRO accounts are permissible, requiring at least one NRI, OCI, or PIO as holder.
8. Nomination Facility:
   • NRO accounts offer nomination facilities.
9. Investment Opportunities:
   • NRIs can invest in mutual funds, recurring deposits, and term deposits using NRO accounts.
10. Repatriation Restrictions:
    • Funds from NRO accounts cannot be transferred to NRE accounts according to RBI guidelines.

Eligibility Criteria for NRO Account:

• NRIs, Persons of Indian Origin (PIO), and Overseas Citizens of India (OCI).
• Specific eligibility extends to seafarers, students abroad, foreign students in India, and short-term foreign tourists.

Benefits of an NRO Account:

• Effective management of deposits, investments, and Indian income for NRIs.
• Facilitates fund transfers to the NRI’s home country, subject to tax obligations in India.
• Enables investment in mutual funds, Indian bonds, etc.
• Lower interest loans available against NRO fixed deposits.
• Joint accounts ensure seamless financial management back home.

Limitations of NRO Accounts:

• Repatriation of funds capped at USD 1 million annually.
• Interest income subjected to taxes.

To open an NRO (Non-Resident Ordinary) account, which is used to manage income earned in India by Non-Resident Indians (NRIs), you typically need the following documents:

1. Proof of Identity:
   • Passport: A copy of your valid passport with a clear photograph and signature page.
   • Overseas Citizen of India (OCI) card, if applicable.
   • Any other government-issued identification document.
2. Proof of Address:
   • Valid overseas residential address proof, such as a utility bill (electricity, water, gas) or a rental agreement.
   • If the address on the passport is not current, additional address proof may be required.
3. Photographs:
   • Recent passport-sized photographs of the applicant(s).
4. Visa and Immigration Documents:
   • Visa: Copy of the visa page in the passport showing the applicant’s current visa status.
   • Work Permit or Residence Permit, if applicable.
5. NRI Status Proof:
   • Proof of Non-Resident Indian (NRI) status, such as an Employment Contract, Work Permit, Residence Permit, or a Certificate of Employment.
6. Indian Address Proof:
   • Some banks may require proof of an Indian address, such as an Aadhaar card, Voter ID card, or utility bill in the name of the applicant’s family member residing in India.
7. Signature Proof:
   • Signature on the account opening form should match the signature on the passport or any other identity document submitted.
8. Bank Account Opening Form:
   • The bank’s prescribed account opening form, duly filled and signed by the applicant(s).
9. Tax Identification Number (TIN) or PAN (Permanent Account Number):
   • If you have an existing PAN card, provide a copy. If not, you may need to apply for one if required by the bank.
10. Additional Documents:
    • Depending on the bank’s requirements, additional documents or declarations may be needed.