NRIs usually need to transfer funds between different types of accounts – overseas to NRI accounts or vice versa – or even within NRI accounts – NRE, NRO and FCNR accounts. While transferring money between these accounts, they are required to follow RBI guidelines based on the account type. In this blog, we will guide you how to transfer money to NRE account from different types of accounts.
Can NRIs Transfer Money to NRE Account in India?
Non-Resident Indians (NRIs) manage their expenses in India by utilizing two types of accounts –
- NRE account (Non-Resident External account)
- NRO account (Non-Resident Ordinary account)
The NRE account serves the purpose of receiving foreign earnings to India, while the NRO account is used to manage income earned within India.
NRIs can transfer money from an NRO account to an NRE account. Additionally, it is possible to transfer funds between two NRE accounts. However, transferring funds from a regular savings account in India to an NRE account is not permissible.
How to Send Money to NRE Account from another NRE Account?
The following are the sequential steps involved in transferring money to an NRE account:
- Collect the NRE account information.
- Determine the preferred method of transfer.
- Determine the desired transfer amount.
- Verify the bank details and the transfer amount.
- Complete the payment for the transaction.
- Initiate the transfer by submitting the necessary information.
It is important to note that each bank or money transfer provider may have their own specific procedures and requirements, so it is advisable to check with them beforehand. Additionally, when transferring money to an account with a bank in India, it is crucial to ensure that you possess all the necessary account details, including the Indian bank’s IFSC code.
Can One Transfer Money to NRO Account from NRE Account?
Yes, NRIs can transfer money to an NRO (Non-Resident Ordinary) account from NRE. To better understand this aspect, let’s explore the types of permissible credits in an NRO account. The permissible credits in an NRO account include:
- Inward remittances from sources outside India
- Interest earned on the balance of the NRO account
- Gifts in Indian Rupees (INR) or loans obtained from residents or NRE/NRO account holders
- Transfers from your own NRE/NRO account or from another NRE/NRO account
- Any income generated in India for which taxes have not been deducted at source.
How to Transfer Money from NRE to NRO Account?
Here are the steps involved in transferring money to NRE account to an NRO account:
- Determine the preferred transfer method, such as online banking, in-person transaction, or utilizing a money transfer app.
- Provide your NRO account details, including the bank branch’s IFSC code.
- Decide on the amount you wish to transfer.
- Provide any necessary supporting documents if required.
- Verify and confirm the details of your transaction.
Is There any Tax on NRE to NRO Transfer?
The transfer of funds from NRE (Non-Resident External) to NRO (Non-Resident Ordinary) accounts does not attract any taxes. You can easily transfer money to an NRO account without any complications. However, it’s important to note that the funds held in the NRO account are subject to taxation according to applicable tax laws.
Can NRIs Transfer Money from an NRO Account to an NRE Account?
Yes, an NRI can transfer money from an NRO (Non-Resident Ordinary) account to an NRE (Non-Resident External) account. It is important to note that the transfer of funds between these accounts is subject to taxation. Only once all the taxes on the funds in the NRO account have been paid, can the transfer to the NRE account be initiated.
Process of Transferring from NRO to NRE Account
The process of transferring money may slightly vary from bank to bank. Here are the common steps involved in transferring money from NRO account to NRE account:
- Visit the official website of your respective bank.
- Login using your credentials and click on ‘Pay’.
- Click on the option ‘Transfer to NRE’ and choose your NRO savings account.
- Select the NRE account as the destination for the transfer and choose the source of funds from the provided drop-down menu.
- Enter the desired transfer amount and upload any relevant supporting documents as required.
- Accept the terms and conditions, and enter the One-Time Password (OTP) to confirm your payment request.
- The money will be transferred once all the submitted documents have been verified.
Limit on Transfer from NRO to NRE
The repatriation of funds from NRO (Non-Resident Ordinary) accounts is subject to certain limitations, with a maximum limit of USD 1 million or equivalent per financial year as per the guidelines set by the Reserve Bank of India (RBI). It is important to note that the funds held in NRO accounts are not freely repatriable. Additionally, the interest earned on NRO deposits is taxable in India at a rate of 30%, inclusive of surcharge and education cess.
Documents Required for Transfer of Money
For simple money transfers to NRO or NRE accounts, there is usually no need to provide many documents. However, while entering the transaction details, you may be required to specify the reason for the transfer and provide a government-issued ID for identity verification purposes.
For money transfers to NRO to NRE account, documents required are:
A signed cheque for the transfer of funds from NRO to NRE account
- FEMA declaration
- Documentary evidence of source of funds
- Form 15CA
- Form 15CB that is a form certified by the CA. It contains details regarding the payment like the TDS rate, deductions and the applicability of DTAA.
Can NRIs Transfer Money from Regular Savings Account to NRE Account?
No, NRIs cannot transfer money from a regular savings account in India to an NRE (Non-Resident External) account. Moreover, keeping a resident savings account after becoming an NRI is against the law. According to the regulations outlined in the Foreign Exchange Management Act (FEMA), when an individual’s status changes to NRI, their resident savings account must be converted to an NRO (Non-Resident Ordinary) account.
How to Convert a Savings Account into NRO Account?
The following are the essential steps to convert a residential savings account into an NRO (Non-Resident Ordinary) account:
- Initiate the process by contacting your respective bank and inquiring about the conversion procedure.
- Obtain the application form either directly from the bank or by downloading it from their official website.
- Complete the application form by providing all the necessary details and ensure it is duly signed by the account holder.
- If there are any associated fixed deposits (FD), ensure that you include the receipts along with the application form.
- If you are currently in India, submit the filled-out form along with the required documents at the bank branch.
- Get the form and documents attested by the Indian embassy in your new country of residence before submitting them to the bank branch.
Contact SBNRI
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