Can I transfer money from NRE to another NRE account?
Free and easy transferability: If you wish, you can transfer both the principal amount and the interest from an NRE account to an account in a foreign bank without any restrictions. You can also transfer funds quickly from an NRE account to another NRE account or an NRO account.
You cannot transfer money to a NRE account from a savings account in India. However, you can transfer money from NRO to NRE account. You can also transfer money from one NRE account to another.
YES! NRIs can transfer funds from their NRE (Non Resident External) Account to their NRO (Non Resident Ordinary) Account. An NRE account allows you to transfer funds to another NRE account as well as an NRE to NRO fund transfer.
- 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.
There is no tax implication for you or for your wife for transferring money from one account to another, as long as your wife does not invest on your behalf. NRIs must convert all their resident bank accounts to non-resident (ordinary) or NRO or non-resident external or NRE account.
Disadvantages of NRE Account
Monthly minimum balance to be maintained ranges from Rs 50,000 to Rs 1 Lac depending on where your bank branch is (Rural/Urban). Can't manage earnings in India in this account as only deposits from foreign countries are accepted.
You should convert/re-designateor close your NRE account after the return, on a priority basis. If you fail to convert your NRE account within 3 months of the return, it will be considered as a violation of Foreign Exchange Management Act (FEMA) and attract a penalty.
There is no ceiling on the money an NRI can send to India. This money, however, needs to be earned through legit means. You also have to pay the required taxes on this money in the country it was earned.
| Name of the Bank | NRE Deposit Interest rates below Rs. 2 crores | Minimum Balance |
|---|---|---|
| HDFC Bank | 4.90% | Rs. 10,000 (Urban and Metro city branch) Rs. 5,000 (Rural city branch) |
| ICICI Bank | 4.90% | Rs. 10,000 |
| Kotak Mahindra Bank | 4.60% | Rs. 10,000 |
| RBL Bank | 5.40% | Rs. 50,000 |
Non- resident External account is abbreviated as an NRE account. These are Indian rupee accounts opened by NRIs in India. The main purpose of these accounts is that they enable the account holder to deposit money in foreign currency. The account holder can withdraw money from his/her NRE account.
How much money can an NRI transfer out of India?
However, a non-resident is allowed to remit upto 10 lakh USD every year from his NRO account every year. So you can remit back upto this limit every year in case the aggregate value of your investments exceeds 10 lakh USD.
Deposit / Withdrawal of Funds
Funds originating from a foreign country (foreign currency) can be deposited in both NRE and NRO accounts. However, funds originating in India i.e. in Indian Rupees or INR can be deposited only in NRO Accounts and not an NRE Account.
While an NRE account is fully repatriable tax free, under an NRO you can still repatriate the balance but you are required to pay taxes on the repatriated amount. This crucial difference is why the NRO account is more ideal for those that want to keep their funds in the country.
So if a father remits a large sum of money by way of gift to his son or daughter who has settled abroad, the gift will not be taxable in India in the hands of the non-resident daughter or son. Father falls under the list of relatives and a gift from the father is not treated as income in the hands of the recipient.
NRIs can give and receive gifts in cash or kind (jewelry, antiques, property) to and from relatives and non-relatives in India.
Hence, if the aggregate value of gifts received during the year exceeds Rs. 50,000, then total value of all such gifts received during the year will be charged to tax (i.e. the total amount of gift and not the amount in excess of Rs. 50,000).
2. Can an NRI maintain multiple accounts with different banks in India, simultaneously ? Ans.: Yes, there is no prohibition to open and maintain multiple accounts a/cs. 3.
You cannot maintain your NRE account and NRE FDs when you are an RNOR. You need to convert your NRE account to resident account immediately upon returning to India. You need to convert these accounts to resident accounts within a reasonable period of time. The reasonable period can be assumed as 3 months.
Though there are several differences between an NRE and NRI account, you will need both to manage your funds. An NRE account proves useful for your foreign earnings and you can even send money back to your country of residence freely. An NRI account helps keep your income earned in India safe and within India.
Yes, you can transfer money from your NRE savings account to the HDFC Bank Non-Resident Ordinary (NRO) Savings Account as an initial deposit.
What can I do with my NRE account after returning to India?
Status of NRE FD after return to India: If you are holding an NRE FD, it would be converted into a domestic resident FD account without changing the promised rate of interest. But the interest earned would become taxable as per your income tax slab.
