Posted on: 28-05-10 11:18:21
so far my understanding of NRO account is that its Rupees account and that money should be spent in India in Rs.
NRI account is a $ acct and is different.
Rs from Indian banks can be wired to Canadian banks but I dont know the tax implications.
I really dont know how to go about the Rs. amount I left back in India.
Quote:
Originally posted by desihippi
so far my understanding of NRO account is that its Rupees account and that money should be spent in India in Rs.
NRI account is a $ acct and is different.
Rs from Indian banks can be wired to Canadian banks but I dont know the tax implications.
I really dont know how to go about the Rs. amount I left back in India.
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Any Indian in India only has a standard account.
The 'N' portion enters when an NRI opens the normal account. So, it becomes an NRO account. 'O' for Ordinary account, which tells them that you are an NRI and you also earn Foreign exchange either through business or by working out side of India.
There is no such account called NRI Account. But when an NRI makes a remittance out of his foreign earnings into India, he can maintain that remittance into an account called NRE Account "E" for the external remittance. The money in this account is freely convertible once again back into foreign exchange. (To a currency of your choice at the going rate on that day)
Yes, you can spend it all when you return back to India. That is easy or give it away in the forms of gifts to relatives and friends or buy some items prior to your return and bring them along. Or buy land, home or a vehicle etc.,
Some Bank Managers are nice and they might help you convert about $500 with your Passport and an airline ticket. Talk with them and you will come to know the dollar amount a little clearer.
Freddie.
I just googled and found a very good http://www.raagvamdatt.com/Non-Resident-External-NRE-and-Non-Resident-Ordinary-NRO-Accounts-for-NRIs/124/ for the difference between NRO, NRE and FCNR account and here is is in plain simple language.
Non-Resident External (NRE) & Non-Resident Ordinary (NRO) Accounts for NRIs
We often hear about the two types of Non-Resident bank accounts – NRE and NRO. We also keep hearing about the restrictions each has, like restriction on repatriation. This article clarifies the difference between NRE and NRO accounts, and explains their characteristics.
All Non-Resident Indians (NRIs) face a dilemma at the beginning of their NRI status – What kind of bank account should they maintain back home in India? Should it be an NRO account, or should it be an NRE account? Can you have both? What can each be used for? Let’s understand these things in detail.
Non-Resident External (NRE) Account
An NRE account is a Rupee denominated account. That is, funds in an NRE account are maintained in Indian Rupees. It can be a savings, current or a fixed / term deposit account.
NRE accounts can be opened by NRIs.
Funds can be repatriated from an NRE account. This means that the funds can be freely sent to any other country.
An NRE account can contain funds remitted from abroad, or obtained from another NRE / FCNR account maintained in India.
Funds can be transferred from an NRE account to an NRO account without any restriction.
An NRE account can be held jointly, provided the other person is also an NRI.
The interest earned on deposits in an NRE account is exempt from tax in the hands of the NRI.
A resident power of attorney holder can not open an NRE account on behalf of an NRI. But the resident power of attorney holder can make local, rupee payments on behalf of the NRI.
Nomination is allowed for NRE accounts.
If the NRI holding the NRE account returns to India and becomes a resident of India, the NRE account is converted into a regular resident account.
Non-Resident Ordinary (NRO) Account
An NRO account is a Rupees denominated account. That is, funds in an NRE account are maintained in Indian Rupees. It can be a savings, current or a fixed / term deposit account.
NRO accounts can be opened by NRIs. Regular bank accounts of a person, who becomes an NRI, also get converted into NRO accounts.
Funds can not be repatriated from an NRO account. These funds have to be used only for local (within India) payments in Indian Rupees.
An NRO account can only contain funds received from within India.
Funds can not be transferred from an NRO account to an NRE account.
An NRO account can be held jointly with another NRI or with a resident Indian.
The interest earned on deposits in an NRO account is taxable in the hands of the NRI as per the applicable income tax slab rates.
A resident power of attorney holder can not open an NRO account on behalf of an NRI. But the resident power of attorney holder can make local, rupee payments on behalf of the NRI.
Nomination is allowed for NRO accounts.
If the NRI holding the NRO account returns to India and becomes a resident of India, the NRO account is converted into a regular resident account.
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Pramod Chopra
Senior Mortgage Consultant
Mortgage Alliance Company of Canada
for the clarifications between NRE and NRO accounts. Nice symmetrization,
Money from the NRO Account can be remitted, after producing the required documents.
As per the Master Circular for Non Resident Ordinary (NRO) Rupee Account Scheme, the permissible debits (up to USD 1 million per financial year for all bonafide purposes) in the account are -
a. Remittance of proceeds from sale of assets -
i. Assets acquired in India out of Rupee/Foreign Currency Funds -
This can include -
Immovable property
Financial assets (e.g. Shares/Mutual Funds)
ii. Assets acquired by way of inheritance/legacy
b. Remittance of current income (such as rent, dividend, pension, interest, etc., in India).
