How to transfer funds from NRO to an NRE account?

Non-resident Indians (NRIs) in India manage their expenses through two accounts: Non Resident External (NRE) and Non Resident Ordinary (NRO) (NRO). The NRE account is used to transfer foreign earnings to India. In contrast, NRO accounts are used to manage income earned in India. Most banks allow you to transfer money from an NRO account to an NRE account. Here's how to transfer funds from an NRO to an NRE account.

What is NRO Account?

The Non-Resident Ordinary (NRO) Account is used to deposit rupees earned in India. This account can also be used to deposit foreign earnings. When an Indian citizen travels abroad for work with the intention of staying, his resident accounts should be converted by the bank into an NRO Account. As a result, it is critical to notify the bank of the individual's departure abroad.

It is also important to understand that NRO Accounts are denominated in rupees and can be opened in the form of Savings, Current, Recurring Deposits, or Fixed Deposits. These accounts can be opened jointly with any Resident Indian, Former or Survivor.

What is NRE Account?

The Non-Resident External (NRE) Account enables you to easily transfer foreign earnings to India. This type of account, however, is dominated by the rupee and can be opened in the form of Current, Savings, Fixed, or Recurring Deposits.

It is critical to understand that the interest earned on these accounts is not taxed, i.e. they are tax-free, and that they are easily transferable. On Former basis, these accounts can be opened jointly with a close relative who is a Resident Indian.

Limit of transfer

The Reserve Bank of India allows transfers of up to USD 1 million per year from an NRO to an NRE account.

Documents required

• A signed check authorising the transfer of funds from an NRO to an NRE account.
• FEMA's proclamation
• Documentary proof of funding source
• Form 15CA
• Form 15CB - This is a CA-certified form. It includes payment information such as the TDS rate, deductions, and DTAA applicability.

Tax Payment

The interest on NRO accounts is taxed. NRE account interest, on the other hand, is tax-free. As a result, before transferring funds from an NRO to an NRE account, it is critical to pay all applicable taxes.

How to transfer funds from NRO to an NRE account?

Follow these steps to transfer funds using Net Banking.

Step 1: Login and click the 'PAY' button.

Step 2: Select your NRO savings account and click 'Transfer to NRE.'

Step 3: From the drop down menu, select NRE account for credit and source of funds.

Step 4: Enter the amount and upload any necessary supporting documents.

Step 5: Accept the terms and conditions and enter the OTP to confirm your payment request.

Once all documents have been verified, the funds will be transferred.