NRE/NRO account requirement

POSTED BY arjun ON September 1, 2011 11:16 pm COMMENTS (3)

I currently have an ICICI savings bank account through which I subscribe to 4 mutual funds(SIP) via ECS.I’m likely to go abroad on a medium term contract.

  1. Should I convert my savings account to an NRE/NRO account ? What is the difference between the NRE and NRO account ?
  2. Do my SIPs stop on conversion ? Do I need to inform the MF AMCs of the change ?
  3. (In relation to Q 1) Is it better to let my ICICI savings account stay as it is and open an NRE/NRO account in another bank ? Is this legal ?

3 replies on this article “NRE/NRO account requirement”

  1. Gopi says:
    June 28, 2015 at 3:57 am

    I am an NRI and had invested in company shares some years back. 3 months back, company was sold and they credited the amount to my NRO account, which is about 5 L. Now will the bank debit 30% tds which is about 1,50,000? Is there a way to save this? Should I gift the same to my parents or invest further in another equity linked plan, if that can save the tds ?

    Reply
  2. webgenius says:
    September 27, 2011 at 9:02 am

    Hi Arjun,

    Define “medium term contract”. If you’re going out of India for more than 6 months on a work permit, you’ll get the NRI status (kindly check the RBI rules once for the exact number of days). Once you become an NRI, you cannot hold SB accounts in your name. The SB accounts need to be converted to NRO accounts.

    You might also need a NRE account to tranfer funds from abroad. Funds need to be transferred to NRE account from abroad, and then from NRE to NRO account if required. This will avoid double taxation in India since you would have already paid the taxes abroad.

    This is my understanding. I’m not sure if it is 100% right. You can get in touch with SBI/Citibank NRI services. They’ll be able to guide you on the type of account required for you.

    Hope this answered question 1.

    Regarding question 2, please contact any NRI branch of a reputed bank. They’ll be able to help you with this.

    Regarding question 3, as an NRI it is illegal to hold non-NRO accounts as normal SB accounts.

    Reply
  3. arjun says:
    September 8, 2011 at 6:25 am

    Would really like an answer to this one…

    Reply

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