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Open a suitable bank account: NRE/ NRO/ FCNR |
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As an NRI, you can choose from various types of accounts, designed for NRIs. Non-Resident Ordinary (NRO) Savings Account, Non-Resident External (NRE) Savings Account and Foreign Currency Non-Resident (FCNR) Deposit Account are some types of bank accounts available to NRIs. |
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Before deciding on which account is suitable for you, take into account the following points: |
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What are the sources of the funds for depositing in the bank account? Are these funds obtained from Indian sources or repatriated (brought back home) from overseas? |
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In which currency you want to maintain the account? |
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Do you plan to repatriate (restore) the currency into the foreign currency, in order to take it abroad? |
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How will this money be taxed in India? |
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If you want to maintain the account in rupees, then NRO/ NRE account is suitable for you. In an NRE account, your funds in foreign currency are converted into Indian rupees, at the rate prevailing at the time of making transfer the funds in the account. You cannot use this account to deposit your income earned in India. The principal as well as the interest is freely repatriable.
If you want an account to transfer Indian earnings, NRO account is suitable for you. However foreign funds can be also be deposited/transferred to this account. The interest income earned on in this account is subject to tax in India. The interest is subject to income tax deduction at source @ 30% plus applicable surcharge plus education cess. You can repatriate upto USD 1 million, for bonafide purposes, per financial year from balances in NRO accounts subject to payment of applicable taxes. Funds from an NRO account cannot be transferred into an NRE account as NRO funds are non-repatriable.
In a FCNR account you can park your funds in US Dollars, Pounds, Euro, Japanese Yen and get protection from exchange risk and funds are alos repatriable. |
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KYC Formalities |
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As per the new SEBI (Securities and Exchange Board of India) ruling with accordance to the protocols set by the Income Tax Department of India, anyone who wants to invest in Indian stock markets, debt or other instruments or be involved in any financial transaction in India needs a PAN - Permanent Account Number. |
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The documents required for this are: |
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PAN Card (Compulsory document- it will act as an Identification proof) – to be signed |
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Proof of Address (Indian / Overseas) (It can be same as one submitted for PAN Application, this includes Utility bills, driving license, Passport, bank statements) |
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Other documents depending on your nationality. As mentioned above, a non Indian Citizen has to provide either an OCI or PIO card. |
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Passport size photograph with a signature across it |
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In the case of a non Indian Citizen, but of Indian Origin, the PIO/OCI card is compulsory to submit along with the KYC. |
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