What is NRO bank account?

An NRO (Non-Resident Ordinary) account is a bank account in India for Non-Resident Indians (NRIs) to manage their income earned in India. This account is designed to allow NRIs to deposit and manage their Indian earnings such as rent, dividends, pensions, and other incomes earned in India.

Key Features of NRO Account

• NRIs can deposit their Indian income sources such as rent, dividends, and pension into this account.
• Funds in an NRO account can be repatriated outside India, subject to certain limits and conditions. The current limit is up to USD 1 million per financial year, after payment of applicable taxes.
• An NRO account can be held jointly with another NRI or even with a resident Indian.
• Interest earned on NRO accounts is subject to tax in India. The applicable rate of Tax Deducted at Source (TDS) on interest income is 30% (plus applicable surcharge and cess).
• The NRO account is maintained in Indian Rupees (INR).
• NRO accounts can be in the form of savings accounts, current accounts, recurring deposit accounts, or fixed deposit accounts.
• NRIs can also transfer funds from NRE account to NRO account or deposit foreign funds in NRO account.