Banking Awareness : Non-resident Ordinary Rupee Account (NRO)

An NRO (Non-Resident Ordinary) savings account is where you can maintain and manage your income earned in India such as rent, dividends, pension etc.

 Non-Resident Ordinary Rupee Accounts (NRO) are also rupee-denominated accounts. These accountsare designed fozr those who wish to deposit the earnings in India arising from rent, dividends, sal aries etc.

Unlike NRE accounts, interest earned on this account is taxed at the rate of 30% (plus surcharge) and other applicable taxes in India according to the ITA. In order to take the benefit of lower rates of tax as per double taxation avoidance agreement (DTAA) entered in by India, NRIs need to submit the Tax Residency Certificate issued by Tax Authorities of the country of his residence.

Apart from different tax treatment, the amount of money that can be repatriated also varies. In case of NRO account, remittance outside India of current income such as rent, dividend, pension, interest, etc. and remittance up to USD one million, per financial year (April- March), are allowed for all bona fide purposes, subject to the satisfaction of the Authorised Dealer (AD) bank. This amount can be repatriated after the applicable taxes are deducted.

NRO accounts can be opened as a joint account with other Non-Resident Indian(s) and Resident Indians. However only resident close relative can be added as joint account holder in NRO accounts on "Former or Survivor" basis only.

The average investment term and monthly balance to be maintained in NRE and NRO accounts varies from one bank to another. Both accounts have the nomination facility where a nominee can be appointed to be entitled to the proceeds of the account in the event of the death of the account holder.

The balance maintained in this type will be Rupee (INR) dominated. 


ELIGIBILITY

NRO a/c. can be opened in the name of the following without prior approval of RBI

1) Non Resident Indians of Indian nationality / origin.
2)Non Resident foreign nationals (other than Pakistani & Bangladeshi).
3)Overseas firms, Cos., entities (Excepting Pakistani & Bangladeshi).

TYPES OF A/Cs

Following types of a/cs can be opened under NRO scheme.

1)Saving Bank a/c.
2)Current a/c.
3)Cumulative Deposit a/c.
4)Fixed Deposit, DRIC ,Union Smart, Flexi Deposit


 JOINT A/Cs

NRO a/c. can be opened either in individual name or joint names of Non Resident Indians. NRO a/cs. can be held jointly with residents also.

HUF NRO A/C.

HUF NRO a/c. can be opened provided all the coparceners of the HUF are Non Resident.