Who is an NRI ?
- An individual will be treated as a resident in India in any previous year if he/she is in India for:
- Atleast 182 days in that year, OR
- Atleast 365 days during 4 years preceding that year and atleast 60 days in that year.
- An individual who does not satisfy both the conditions as mentioned above will be treated as “non-resident” in that previous year.
- An NRI can open four accounts in INR and/or in a foreign currency.
- NRE Account
- NRO Account
- Foreign Currency Non –Resident Accounts (FCNR Accounts)
- SNRR Account
Non-Resident External (NRE) Account:
- It is a savings account, to maintain income earned outside India
- Get tax-free interest in India
- Principal amount and interest earned can be withdrawn from an account in a foreign country
- Domestic credits are not allowed.
Non-Resident Ordinary (NRO) Account:
- It is used to manage your income earned in India such as income received from rent, dividends, pension etc.
- Withdrawal from India only up to a certain limit, for bonafide purposes like education, medical expenses and similar expenses
- 30% tax + applicable surcharge +education cess deducted at source on interest earned in India.
Foreign Currency Non –Resident Accounts (FCNR Accounts):
- A Term deposit account in US Dollars, GBP, EUR, JPY, AUD, CAD, SGD, HKD and CHF.
- Fixed tenures of up to 12 months, 36 months and 60 months.
- Interest income is not taxable in India.
- Principal amount and interest earned can be withdrawn from a foreign country
- Any person resident outside India, having a business interest in India, can open a Special Non-Resident Rupee Account (SNRR account) with an authorised dealer for the purpose of performing transactions.
Non-Resident (Non-Repatriable) Rupee Deposit Accounts (NRNR Accounts)
- NRIs are permitted to open these accounts by transfer of freely convertible foreign currency funds from abroad, or from NRE / FCNR accounts.
- There is no income tax on the interest.