Wednesday, May 9, 2012

Liberalisation - Transfer from NRO to NRE account

Presently transfer of Funds by NRI and PIO from NRO account to NRE account maintained in India  is not allowed.

Based on a recommendation by a committee ,  RBI has now allowed the transfer of Funds from NRO account to NRE account subject to amaximu of USD 1 Million per year , subject to payment of applicable Taxes

NRE account is generally opened  for depositing income from abroad and NRO account is opened  for putting Indian incomes. In NRE account , only NRIs can become joint account holders but in the NRO account  both resident and non-resident can become joint account holders. One can freely repatriate the principal amount from the NRE account but not from the NRO account. The principal amount lying in the NRO account can be used only for local payments.
  

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