How to Transfer Money from NRO to NRE Account | HDFC Bank (2024)

FAQs

Is it possible to transfer money from NRO to NRE account? ›

You cannot transfer money to a NRE account from a savings account in India. However, you can transfer money from NRO to NRE account. You can also transfer money from one NRE account to another.

Transfer of funds from NRO to NRE account is permitted within the overall ceiling of USD 1 million or equivalent per financial year, subject to submission of necessary documents as applicable. You can post / courier or submit in a person a request letter for transfer of funds from NRO to NRE / FCNR (B) account.

NRO Account Repatriation requirements

The A2 form needs to be filled and submitted to your bank. You will also need to submit Form 15CA. This is required in order to self-declare the payment details of your account, which are liable for taxes in India. Form 15 CB is another form that is mandatory to be submitted.

Hence, Form 15CB and Form 15CA are certification and declaration forms in relation to payments/remittance made to Non-Residents. Section 195 is not applicable on remittance by NRIs or PIOs from their NRO account to NRE account or foreign account. Bank requires Form 15CA and 15CB.

NRO to NRE Fund Transfer Limit

You can repatriate funds from NRO accounts only up to a maximum limit of USD 1 million per financial year as allowed by Reserve Bank of India (RBI).

You will have to request a transfer with the appropriate signed forms to move the funds. Here are the list of documents you will need to do so: A signed FEMA declaration. A cheque made out for the amount or signed letter for funds transfer from NRO to NRE savings account.

* Please note that the debit cards linked to NRE accounts can be used across the world. However, the debit cards which are linked to NRO accounts are non-chip based and can be used only in India and for domestic online transactions initiated on merchant website(s) based in India.

Can I withdraw money from NRO account outside India? ›

This account allows you to receive funds in either Indian or foreign currency. However, only Indian currency can be withdrawn as NRO Accounts are kept in Indian currency and cannot be freely repatriated into any foreign currency.

As an NRE Account holder, you can transfer money not only to another NRO account but to n NRO account as well. However, as an NRO account holder, you may only transfer money to another NRO account.

Any amount which is remitted to India from abroad through proper banking channel can be credited in the NRO account. NRI can deposit foreign currency upto $5,000, while in India, duly supported by currency declaration form. Money can also be transferred to NRO account from NRO account of any other NRI.

Limitations of NRO Accounts

One of the major disadvantages of an NRO account is the cap of USD 1 million on the repatriation of funds. Moreover, the interest income of an NRO account is also subject to taxes.

Tax for sending money from the USA to India

In general, “blood relatives” — including spouses, children and grandchildren, siblings or in-laws — don't pay tax on any amount you send. However, if you're sending more than about $700 to someone in India who isn't a blood relative, they'll need to report it on their taxes.

NRIs can repatriate the balance in their NRO account (only current income such as rent & pension and other income where taxes are not deducted at source). Although, the funds are not freely repatriable. The Reserve Bank of India (RBI) allows NRIs to remit up to USD 1 million per financial year from their NRO account.

There is no limit to repatriate funds from NRE accounts as it is fully and freely repatriable from India. NRE Deposits are tax-free in India as NRE Accounts are meant to maintain the income earned outside India.

The foreign income i.e. income accruing or arising outside India in any financial year is liable to income-tax in that year even if it is not received or brought into India. There is no escape from liability to income-tax even if the remittance of income is restricted by the foreign country.

Interest in an NRE account is not taxable in India. However, Interest on the NRO account is taxable in India and will be liable for TDS. As per FEMA rules, the penalty for not converting a resident account to an NRO account is up to 3 times the amount in the account or INR 2 lakh when the sum is not quantifiable.

Penalties for not converting to NRO account

According to the DBS Bank website, “Continuing to hold your resident savings account after gaining NRI status is considered illegal under the Foreign Exchange Management Act (FEMA) guidelines and doing so may attract hefty penalties.

What documents do I need to convert to NRE account? ›

Self-attested copies of passport and Visa to prove his/her NRI status. Overseas address is mandatory to be obtained from customer and mentioned on the account conversion form. Self-attested Address proof (Any one Indian or Overseas proof) should be as per the list of acceptable proofs.

The accounts can be opened as savings and current account and the currency is in Indian rupee. It is mandatory to maintain a minimum of INR 75000 in both NRE and NRO account.

While there is no restriction on the NRE account limit, only a few specific types of credits are allowed. These include: Inward remittances from other foreign currencies, as permitted by the RBI. Interest accruing on the funds deposited in the account.

Yes, an individual can open both NRE and NRO accounts to meet his needs. If you have any income arising in India, you can receive it in NRO account, and if you want to park your earnings abroad in India, you can open an NRE account.

HDFC Bank NRO Account

Given below are the key features and benefits of HDFC NRO savings account: HDFC NRO savings account interest rate ranges 3% to 3.50%. NRIs can repatriate funds outside India or transfer to an NRE account up to USD 1 million in a financial year.

The NRI has to fill up and submit Form 15CA Format (online application form) and Form 15CB (Chartered Accountant Application) to the bank branch to transfer money from India to a foreign country.

NRIs living in the USA can open an Axis NRO savings account to save their income earned in India such as pension, dividends, or deposit their existing savings. Convenient depositing and management of funds. Close relatives and parents of the account holder can operate the account in the absence of NRIs.

In order to remit funds from the NRO account, you would need to submit two documents: Form 15 CA and Form 15 CB. Check out the process. It's common knowledge now that the Government of India allows you to remit funds up to USD 1 million per financial year abroad.

The RBI has previously restricted the transfer of money from an NRO account to an NRE account. The release from abroad or another NRE account was the only means to move the money into NRE accounts.

Can my friend transfer money to my NRE account from USA? ›

Yes. Transferring money from in dollars to NRE account is just transfer from YOUR account in foreign currency to YOUR account in India.

Updates on foreign remittance tax India

In the 2023-23 Budget address, Finance Minister Nirmala Sitharaman announced that the Tax Collection at Source (TCS) for foreign remittances would increase from 5% to 20% of the transaction amount.

An NRO account restricts you from remitting more than USD 1 million inclusive of taxes during an assessment year. You can repatriate the interest amount freely, but the principal amount can be repatriated only within set limits. It also requires an undertaking along with a certificate from a Chartered Accountant.

An NRE Account or Non-Resident External Account offers you this facility. Here, your money is converted into Indian Rupee or INR at the time of deposit. This means that you can deposit money in any foreign denomination, e.g. US Dollar and withdraw it in Indian Rupees.

Once you come back to India permanently, you are a resident as per FEMA. And residents are not permitted to keep a NRE account. Interest on NRE FD is tax exempted only for Non-Residents. Therefore from the day you come back to India any interest earned in NRE FD becomes taxable in your hand.

You should opt for NRE Accounts if you want to hold or maintain your overseas earnings in Indian currency. NRE Accounts are also suitable if you wish to keep your savings liquid. You should opt for NRO Accounts if you want to save your earnings from India in Indian currency itself.

What is the IRS limit on sending money to India? The IRS has no limit on how much money your friends or family can send to India. However, above $11.7 million USD, they'll be liable for taxes.

Deposits made in foreign currencies in an NRE account are subject to conversion into Indian rupees. Hence, such deposits might fluctuate in value due to appreciation of domestic currency (or depreciation of foreign currency), thereby incurring losses during repatriation.

The earning received through your NRO account is taxable at 30 % plus applicable surcharge and cess.

Can I sell my property in India and bring money to USA? ›

How much money can be transferred from India to the USA? The US authorities do not impose a limit on the amount of money you can send from India. However, you may need to report high value payments to the IRS using IRS Form 3520.

To transfer money from USA to India online, you can avail of the telephonic or wire transfer facility. The Indian bank will have correspondent banks through which such a transfer takes place. If your bank is part of the SWIFT network, the money can also be transferred through SWIFT.

With an NRO Account, you are free to repatriate or transfer the interest you earn on the principal amount deposited. You can also transfer the principal amount within specified limits. As per rules, you can transfer up to USD 1 million in one financial year post payment of applicable taxes.

Money can be deposited in foreign as well as Indian currency but can be withdrawn only in the Indian currency. The best benefit of an NRO account is that money earned in India by an NRI can be saved in India. It can be used as a savings or a current account.

Yes, you can transfer money from your NRE savings account to the HDFC Bank Non-Resident Ordinary (NRO) Savings Account as an initial deposit.

As of the financial year 2021-2022, the LRS limit for NRIs is INR 2,50,00,000 per financial year. This limit applies to the total amount of funds transferred by an NRI during the financial year, and includes all transfers made for any purpose, including investments, gifts, and personal expenses.

Funds originating from a foreign country (foreign currency) can be deposited in both NRE and NRO accounts. However, funds originating in India i.e. in Indian Rupees or INR can be deposited only in NRO Accounts and not an NRE Account.

Non-Resident Ordinary (NRO) Rupee Account can be opened and maintained by an NRI, PIO or Foreign National with an Authorised Dealer for the purpose of putting through bona fide transactions denominated in Indian Rupees not involving any violation of the provisions of FEMA, rules and Regulations made there under.

An NRE Account or Non-Resident External Account offers you this facility. Here, your money is converted into Indian Rupee or INR at the time of deposit. This means that you can deposit money in any foreign denomination, e.g. US Dollar and withdraw it in Indian Rupees.

Can I deposit cash in my NRE account in India? ›

Can I deposit cash in my NRE account? Yes, you can deposit cash in your NRE account, provided the deposits are in specific foreign currencies, as permitted by the RBI. Since the NRE account is rupee-dominated, the deposits are converted to INR.