Banking Accounts

A Non Resident Indian (NRI) can open the following Bank accounts:

1. Non-Resident External Account (NRE A/c):

An NRI may open an NRE current account, savings bank account, recurring, fixed deposit account which is denominated in INR (Rupees). It may be opened during a temporary visit to India. It can be jointly held with other NRI(s) or a close relative who may be a resident.The account can be operated by a Power of Attorney (POA) holder subject to restrictions. Nomination facility is available. The interest earned on NRE account is exempt as per Indian Income Tax laws. Hence, no tax is deducted at source on such interest earned. Funds are freely repatriable outside India from such an account.

2. Non Resident Ordinary Account (NRO A/c):

Any person resident outside India as per FEMA, may open an NRO current account, savings bank account, recurring or fixed deposit account which is denominated in INR (Rupees). It can be jointly held with residents or other NRI(s). The account can be operated by a Power of Attorney (POA) Holder subject to restrictions.Nomination facility is available. The interest earned on NRO account is taxable as per Indian Income Tax laws. Funds up to USD 1 million can be repatriated outside India or to NRE Account from such account in a financial year. A person resident in India who is settling abroad can transfer the balances lying in saving account to NRO account.

3. Foreign Currency Non Resident (Bank) Account - FCNR Account:

NRIs are eligible to open and maintain FCNR Deposits. It may be opened during a temporary visit to India. It is in the form of deposits with maturity of 1 – 5 years. It is denominated in any freely convertible currency. It can be jointly held with other NRI(s) or a close relative who may be a resident. Such close relative will be eligible to operate the account as a POA holder. Interest on FCNR account is exempt under the income tax laws for an NRI as well as Resident but not ordinarily resident. - by A M B JAIN & CO.