A Non Resident Ordinary (NRO) account is a current or a savings account which is managed in India by a Non Resident Indian (NRI) in order to administer his income earned in India, before and after becoming a Non Resident Indian. These incomes can include pension from abroad, dividends and rent. The money deposited in the account is converted from foreign currency to INR. All NRIs, except for a resident of Nepal and Bhutan, can open a Non Resident Ordinary account.
Features of an NRO account
There is an option for the NRIs to convert their existing resident accounts to a Non Resident Ordinary account, when they become a non resident. Just like an NRE account, some banks may ask for minimum balance to be maintained in an NRO account like INR 10,000. Unlike an NRE account, you are not allowed to freely repatriate funds from an NRO account.
Restrictions by the Reserve Bank of India
There are certain restrictions imposed by the Reserve Bank of India on the NRO accounts. The NRO accounts are taxable, unlike NRE accounts which are tax excused. NRO accounts are not exposed to the risk of exchange rate fluctuations, as opposed to NRE accounts that are at such risks. There are various types of NRO accounts. In the article above we have mentioned only saving accounts. The other types include recurring, current and fixed deposit accounts.
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