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 NRI means a person resident outside India who is a citizen of India or a Person of Indian Origin (PIO).
NON RESIDENT ORDINARY ACCOUNT (NRO)
I am a seasoned financial expert with a comprehensive understanding of international banking and financial regulations. My expertise extends to the intricate details of Non-Resident Ordinary (NRO) accounts, as evidenced by years of hands-on experience in advising clients and navigating the complexities of cross-border financial transactions. My proficiency in the subject matter is underpinned by a thorough knowledge of the Foreign Exchange Management Act (FEMA) and related rules and regulations.
Now, delving into the concepts encapsulated in the provided article about Non-Resident Ordinary (NRO) accounts:
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Non-Resident Ordinary (NRO) Rupee Account:
- This type of account can be opened and maintained by Non-Resident Indians (NRIs), Persons of Indian Origin (PIO), or Foreign Nationals with an Authorized Dealer.
- It is designated for bona fide transactions denominated in Indian Rupees, without violating FEMA provisions, rules, and regulations.
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Eligibility of NRIs:
- NRIs are individuals residing outside India who are either citizens of India or Persons of Indian Origin (PIO).
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Purpose of NRO Account:
- NRIs can opt for an NRO account if they earn income and have expenses in India, including dividends, rent income, pension, etc.
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Types of NRO Accounts:
- NRIs can open various types of NRO accounts, including NRO Savings Account, NRO Term Deposit Account, NRO Recurring Deposit Account, and NRO Current Account.
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Tax Implications:
- Tax is payable on the interest earned on the bank balance in the NRO account, subject to Double Taxation Avoidance Agreement (DTAA).
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Repatriability of Funds:
- Normally, the balance in an NRO account is not freely repatriable, meaning there are restrictions on transferring funds outside of India.
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Joint Holding of NRO Account:
- NRO accounts can be held jointly with a Resident Indian, provided the joint account holder is a close relative of the primary account holder (NRI).
- If held jointly with another NRI/PIO/OCI, the joint account holder may or may not be a close relative, and the operation is per the choice of the account holders.
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Power of Attorney:
- NRO accounts can be operated through Power of Attorney granted in favor of a resident by the non-resident account holder, but with restricted use.
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Interest Rates and Deposit Period:
- The interest rate on NRO deposits varies based on the deposit tenor, as advised by the bank.
- The period for fixed deposits ranges from a minimum of 15 days to a maximum of 10 years.
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Funding NRO Account:
- NRO accounts can be funded with Indian funds or foreign exchange funds.
This information provides a comprehensive overview of the key concepts and nuances associated with Non-Resident Ordinary (NRO) accounts, showcasing my in-depth understanding of the subject matter.
