An NRE account holds foreign earnings remitted to India. Its interest is exempt from tax in India and the balance is freely repatriable. An NRO account holds income earned in India, such as rent, dividends or pension. Its interest is taxable, with TDS.
Funds in an NRO account can be repatriated up to USD 1 million per financial year, after taxes, with the required Form 15CA / 15CB documentation.
Key points
- Income arising in India should go to NRO, not NRE
- Claim lower TDS under DTAA with a Tax Residency Certificate and Form 10F
- Update your residential status with your bank on return to India
General information only, not professional advice. Section references are to the Income-tax Act, 1961; corresponding provisions of the Income-tax Act, 2025 apply from 1 April 2026. Thresholds and dates may change by notification.
CA Rahul Rajendra MohiteACA, M.Com · ICAI Membership No. 622387 · Founder, Rahul R. Mohite & Co., PuneFirm profile and key facts