Nro & nre account

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Querist : Anonymous

Querist : Anonymous (Querist)

03 July 2012 What is difference in NRO & NRE account. Which account can I use to make investment for money that I had in India before becoming NRI?

B Ravi Kumar ACMA, MBA, M Com

B Ravi Kumar ACMA, MBA, M Com (Expert)

03 July 2012 1. Interest on NRE account is tax free where NRO is taxable in India: It used to be that NRE accounts paid a lower interest than NRO accounts, but recently RBI allowed banks to set up their own NRE rates, and as a result now NRE fixed deposits pay as much as a NRO fixed deposit.

The big difference is that there is no tax in India on the interest on this NRE account, so it makes much more sense to open a fixed deposit using a NRE account instead of a NRO account.

2. NRE accounts are tax free whereas NRO accounts are not: You don’t have to pay any taxes on your NRE account, but interest income on the NRO deposit is taxed in India.

For further details you can visit www.rbi.org.in

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Sudhag

Sudhag (Expert)

22 November 2013 Yes, the money which you earned in India before becoming NRI can be very well invested in India.

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