Living life overseas is full of fun and excitement. You learn to become independent and take care of finances while building a future. There are several growth opportunities concerning education, employment, and infrastructure. Indians travel abroad for a broader scope and achieving their aspirations.
The Foreign Exchange Management Act (FEMA) made it mandatory for Non-Resident Indians to open an NRI account to carry out financial transactions in India. You use it for transferring funds earned overseas to India and maintain the savings.
Non-Resident External account
The NRE account helps you transfer foreign earnings to India. It allows you to deposit money in a foreign currency and freely repatriate it to your resident country. Once you deposit money in a foreign currency, it gets converted into Indian rupees. Subsequently, you maintain and withdraw funds in INR.
Some key benefits of this account include tax exemption on interest and principal amount and repatriation. The amount deposited or credited in the NRI savings account is tax-exempt in India. The interest earned also does not attract taxes.
You easily transfer funds from your NRE savings account back to your country of residence or transfer foreign earnings to the account. There are no restrictions on the repatriation of funds back to your country of residence.
Non-Resident Ordinary account
You are free to open NRI savings account that suits your needs and finances. India allows NRIs to invest in mutual funds and earn profit from the returns. Other income sources include rent, dividends, salaries, etc. An NRO account is an Indian rupee-denominated account available as savings and fixed deposit accounts. It helps you manage income earned in India.
The interest earned is taxable in India according to the Income Tax Act. The repatriation limit is up to USD 1 million in a financial year. Some key benefits of an NRI savings bank account include easy management of earnings and expenses in India. As an account holder, the bank allows you to open a joint account with an NRI or resident Indian. However, you can only choose a resident close relative as a joint account holder on a former or survivor basis.
FCNR account
The Foreign Currency Non-Resident account helps you transfer foreign income in the same currency. It differs from NRE and NRO accounts regarding the underlying currency denomination. Deposit funds in seven currencies - US Dollars, UK Pound, Singapore Dollar, Hong Kong Dollar, Canadian Dollar, Australian Dollar, and Swiss Franc without restrictions.
It reduces the risk of losses because of currency fluctuations as you maintain a foreign denomination. Neither the deposited principal amount nor its interest attracts taxes in India under the Income Tax Act, 1961.
Conclusion
Opening the NRI savings account online saves time and offers unlimited access. Fill the form, upload the documents, and operate the account after approval from the bank.