Q: What is an NRO account? – Reshmi
A: Non Resident Indians who want to open a banks account in India have two options, i.e. to open an NRE or an NRO account. If an NRI has income coming from India as well as abroad, then Non Resident Ordinary Rupee (NRO) account is the appropriate account for him/her.
People whose residence status is changing to NRI, it is mandatory for them to convert their regular savings account into an NRO account. NRO account can be a savings account or a current account. On depositing the money in a foreign currency in an NRO account, the fund is converted into Indian Rupee.
NRO accounts come with certain restrictions on repatriation of amount above a threshold limit. If an NRI receives income from India such as rental income, dividend, etc., then such income can be deposited in NRO accounts. Any income received from NRO account is taxable at applicable slab rate of the account holder.
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