Can you transfer money from an NRO to an NRE account?

Can you transfer money from an NRO to an NRE account?

Open an NRI Savings Account

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Key Takeaways: The complexities involved in transferring money between an NRO and NRE account can seem baffling. Is the transfer tax-compliant? Are any laws being broken? Can funds be freely transferred from an NRO account to an NRE account? Here are the answers you seek.


What is an NRO account?

Non-Resident Ordinary (NRO) accounts help you manage Indian rupee income sources like rent, dividend, or other income such as profit accrued through an investment or property sale in India. Here, both the non-resident and resident Indians can be joint account holders. The account also allows you to receive income in any currency, Indian or foreign.

However, you can only withdraw funds in Indian rupees from an NRO account. The funds available in an NRO account are not freely repatriable to any other currency or country either as these are used typically for income/profit that is accrued in India. The interest earned in this account is also taxable.

Can NRIs transfer funds from an NRO account to an NRE account?

Yes, you can transfer funds from an NRO account to an NRE or Non-Resident External account. The Reserve Bank of India allows the transfer of funds up to USD 1 million a year from an NRO to an NRE account.

Here is a list of documents you will require if you are planning NRO to NRE transfer of funds:

  • A signed cheque for the transfer of funds from NRO to NRE account
  • FEMA declaration
  • Documentary evidence of source of funds
  • Form 15CA (get it from here)
  • Form 15CB - It is a form certified by the CA. It contains details regarding the payment like the TDS rate, deductions and the applicability of DTAA.

Open an NRI Savings Account


Reasons for transferring funds from an NRO account to an NRE account

There are several reasons why you may need to transfer money to an NRE account. You might need to transfer your income in Indian currency and withdraw to meet investments and expenses in your preferred currency abroad. You might want to keep an NRO account only for collecting the Indian income and manage all investments in an NRE account that allows you the flexibility of full repatriation when you need the funds. If you need to access the funds in your NRO account in any other currency, then transferring it to your NRE account might be the best bet.

An NRE account offers other benefits too:

  1. No limitations: FEMA does not impose any maximum ceiling on the amount that you can transfer from an NRE account. As the money deposited in an NRE account is earned outside India, it is freely repatriable.
  2. Preferential rates on remittance: Better currency conversion rates are applicable whether you choose to send money to India or repatriate funds abroad from your DBS Treasures NRE account.
  3. Tax benefits: The principal amount in NRE accounts is exempt from taxes. Moreover, there is no gift tax, wealth tax or taxes on interest earned in India.

Final Note: If you want access to your Indian funds at any time in any currency, then transferring funds from an NRO to NRE account makes sense. However, to manage your India expenses, you may want to keep funds in an NRO account itself.

Whether you are looking to open an NRO or NRE savings account or seamlessly transfer funds, DBS Treasures can help you. If you need assistance, feel free to reach out to us here.

Open an NRI Savings Account

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