Matters regarding managing income must be dealt with, with the utmost knowledge and care. However, managing one’s income becomes a little complex when it comes to Non-Residents of India (NRIs). An Indian who has moved abroad for the purpose of studies, employment or business and has stayed outside India for 183 days is considered an NRI. They may be earning income not only abroad but also in India. The earnings can be in the form of dividends, salaries, rent, pension, interest, etc. Keeping this in mind, banks offer NRIs the facility of opening an NRO account. NRO accounts are rupee-dominated accounts and they can be opened by an NRI in India. It can be opened in the form of current, savings or fixed deposit account. A non-resident of India can open a Non-Resident Ordinary Account (NRO account) to access earnings in India. Click here, to know more about NRO account.
Being an NRI, you must be aware of the features of an NRO account before applying for it. Given below are three things that you must consider before applying for one.
1. Purpose of NRO Account
NRIs must know that money cannot be repatriated freely from the NRO account. However, after the payment of applicable taxes, you can repatriate the total amount freely. An NRI can only remit 1 USD during a financial year including all the taxes and other assets. The foreign currency that NROs transfer in an NRO account gets converted to Indian Rupees (INR). It must be noted that an NRO account is not exempted from tax laws. Income tax, wealth tax, and gift tax are applicable to NRO accounts. With the help of this account, you can make payments of your utility bills and give donations conveniently. The funds in the NRO account can be used to make local payments also.
2. Who Can Apply for an NRO Account
An NRI who intends to open an NRO must ensure that they meet the following eligibility criteria-
- Any PIO (Person of Indian Origin) or NRI can apply
- An NRI who stays outside India for business or employment and intends to stay outside India for an uncertain period of time
- An Indian National who may be a seafarer
- Students who are pursuing higher studies in foreign countries
- Indian Government employees who are working in foreign nations. They would be required to provide their diplomat passport.
3. Documents Required to Open an NRO Account
An application form must be filled and signed by the account holders for opening an NRO account. To submit the account opening form overseas or in any Indian bank, an NRI would be required to have the following documents-
- NRI status proof
- Photocopy of PAN card
- Photocopy of valid visa
- Latest passport-sized colour photograph
- Proof of the local overseas address
- Photocopy of your Indian passport where all your personal and passport details like name, date, and place of birth, address details, photograph, signature, issue, and expiry date are mentioned and recorded.
- Transaction proof (last six months credit card statement)
The above-mentioned documents must be attested by an overseas bank official located in certain foreign countries. The documents can also be attested by an Indian Commercial bank branch that has an overseas branch. If the documents are self-attested, the NRI would be required to submit their credit card and bank account statement, along with utility bills.
An NRO account is specially designed keeping in mind the financial needs of an NRI and to help them to manage income earned in India as well as abroad. Being an NRI, this is the easiest way for you to operate funds and investments that you have in India.