NRI and family desk
NRE, NRO or FCNR? Which account for which money.
Three accounts, three jobs. Money earned abroad goes in NRE or FCNR; money earned in India, like rent or pension, goes in NRO.
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What to know, in order
- NRE: a rupee account for money you bring from abroad. Principal and interest can be sent back abroad freely.
- NRO: a rupee account for income earned in India, such as rent, pension, dividends or sale money. Interest is taxable in India and TDS is cut.
- FCNR(B): a fixed deposit kept in a foreign currency like US dollars, for 1 to 5 years. No rupee exchange risk, fully repatriable.
- When you become a non-resident, tell your bank. Your resident savings account must be changed to an NRO account.
- Moving NRO money abroad is allowed up to USD 1 million in a financial year, after tax, usually with Form 15CA and a CA certificate in Form 15CB.
- An explanation, not tax or legal advice. A chartered accountant is reviewing this page.
Questions people ask
Is NRE interest tax free?
Yes, while you are a non-resident as defined in FEMA. Schedule IV, entry 1 of the Income-tax Act 2025 keeps interest on NRE account money out of total income for such a person.
Is FCNR interest tax free?
Under the 1961 Act it was tax free for a non-resident or RNOR. We have not yet matched the exact entry in the 2025 Act, so ask your CA before you rely on it.
Can my parents in India be joint holders?
On an NRE or FCNR account a resident close relative can be a joint holder on a "former or survivor" basis. An NRO account can be held jointly with residents.
I am moving back to India. What happens to these accounts?
Tell the bank. NRE and NRO accounts are redesignated as resident accounts; FCNR deposits can run to maturity, and foreign currency can move to an RFC account.
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