How to Open an NRO Accountadmin | November 13, 2020 | 0 | Business
Many NRIs who have a source of income prefer opening an NRO account to manage the funds. Read on to know more about how to open an NRO account.
Many Non-resident Indians who have a source of income in India find it challenging to manage their funds while living abroad. The income earned could be in the form of rent from a housing property, pension, interest earned from the investment, etc. An NRI can keep the revenue safe and manage it well with an NRO account.
An NRO or Non-Resident Ordinary Account can be opened as a savings account, fixed deposit account, or current account. NRIs can use it to park their earnings in India and for managing payments in India. Many NRIs with income sources in India prefer opening an NRO accountas the transactions are done in Indian currency, and there is no risk of loss due to fluctuation in the exchange rate.
If you are looking to open an NRO account, then you can approach any bank of your choice. The process is simple, and with banks offering online services, opening an account has become easier. You can open an NRO account in an Indian bank and operate it even from abroad. Typically, the account opening process involves the following procedure.
When you approach the bank for an NRO account, the bank will give you two choices. You can either convert your existing resident Indian account into an NRO account or open a new one. For a new account, you must provide sufficient documentary evidence as per the Indian Income Tax Act mandate to prove your status as an NRI.
Suppose you are converting a resident account into an NRO account. In that case, you must fill a relevant form and submit documents such as proof of NRI status, proof of residence, and employment overseas, photographs, and other KYC documents as required by the bank.
If you open an NRO account, then you may have to fill a new account form and submit it along with necessary documents, including work permit, visa status, etc. All the documents must be duly attested by the Indian embassy in the country of residence.
Most banks require the NRO account applicants to prove financial transactions carried out in a foreign country. It could be cheque drawn in favour of a bank account in a foreign country, credit card statement (not older than six months).
Opening an Account
If you convert an existing resident Indian account into an NRO account, then the bank will change it to an NRO account after verifying the documents. If you are opening a new account, then after the bank verifies the records and receives the initial deposit amount, the account will become active.
Important Things to Know About NRO Account
- You can open and maintain an NRO account as a joint account with a resident Indian.
- If the signature in the NRO account application form varies from the one in the passport, then it must be attested by the bank branch manager.
- If you convert your resident Indian account into an NRO account, then be prepared to pay a conversion fee; the charges vary from bank to bank.
- The interest earned from the deposits in your NRO account is counted as an income under the Indian tax laws and is taxed as per your tax slab.
An NRO account is useful for you to manage the income earned in India. Make sure that you are aware of the bank’s terms and conditions in terms of minimum balance required in the account, withdrawal limitations, etc. and choose the bank accordingly that offers the best services.