Remitence to india

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CA Pawan Lahoti (Querist)
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04 September 2011 My friend earned salary income in Indonesia.
He is not having NRE or NRO account in India.
But he transferred some money into his saving account maintain in India by demand draft.
Is this transfer will be taxable in India ?

If there is no NRE/NRO account then how to make transfer in India?

C A S.S.Agarwal, M.Com.,LL.B,

C A S.S.Agarwal, M.Com.,LL.B, (Expert)
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06 September 2011 NRE/NRO account is for NRI status persons. Your friend cannot maintain any saving account and transfer the funds directly to that account. If he does so then he is violating the norms of RBI.

As regards tax-ability it depends on the circumstances and proof against the payment

CA Pawan Lahoti

CA Pawan Lahoti (Querist)
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06 September 2011 He has the proof of salary and the remittance slip for the remittance of fund( Demand draft from HSBC). But he is not maintaining any NRI account in India because he was not aware of that. Please let me know if there is any taxability on that fund ?

Please also let me know if there is no NRI account then how to remit the fund. Because he will open account once he will reached India ?

Aashok Kumar Sharma online

Aashok Kumar Sharma online

(Expert)
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21 July 2025 Here’s a clear breakdown of the issue regarding your friend’s remittance to India:

1. Type of Account and Remittance
NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts are specifically for NRIs (Non-Resident Indians).
If your friend is an NRI, he cannot maintain a regular savings account in India; only NRE/NRO accounts are permitted for NRIs by RBI rules.
If he transferred money into a regular savings account (meant for residents) while being an NRI, it is a violation of RBI regulations.
2. Taxability of the Transferred Amount
Salary earned abroad by an NRI is generally not taxable in India if his residential status qualifies him as NRI for the relevant financial year.
The mere transfer of funds to India is not taxable. Taxability depends on whether the income is taxable in India or not.
Since the amount is salary income earned in Indonesia, it is taxable only if your friend is resident and ordinarily resident (ROR) in India in that year.
If NRI, salary earned abroad is exempt from tax in India, so remittance of that income is also not taxable.
3. Proper Way to Remit Money to India
Your friend should open an NRE or NRO account in India as soon as possible.
Money earned abroad can be transferred to these NRI accounts through normal banking channels (wire transfer, demand drafts, etc.).
If currently using a resident savings account without proper declaration, it should be regularized to avoid legal issues.
4. If Already Transferred to Savings Account
Your friend should consult the bank and declare his NRI status.
Convert the resident savings account to an NRO account if possible (some banks allow this on NRI status declaration).
Maintain all proofs of income and remittance to substantiate the nature of funds in case of any queries.
Summary:
Aspect Details
Income tax on salary Taxable only if resident; exempt if NRI
Tax on remittance No tax on transferring funds per se
Account type NRE/NRO accounts mandatory for NRIs
Use of regular savings acct Not allowed for NRIs; needs rectification
Remittance procedure Use bank wire transfer/DD into NRE/NRO

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