NRO stands for Non-Resident Ordinary. It is a rupee account or denominated in rupees. It can be in the form of a current account, savings account, term deposit account or a recurring deposit account. These accounts are generally used by NRIs who earn income in India (Say from rentals, from their real estate properties, pension, etc.). While the principal amount is completely tax free, the interest you earn on that principal is taxed at 30.9%. NRIs will be always in a profit if they open NRO account. NRO accounts can be held either in single or as a joint. The joint a/c holder need not be an NRI and can be a resident as well. Similarly, the beneficiary can be an NRI or a resident. However, it must be noted that if you return back to India and are no more an NRI then this account needs to be converted to a normal account. So, research well before you open NRO a/c.
Benefits of NRO account:
- Withdraw cash and shop in India with your EasyShop NRO debit card.
- Entrust a relative or friend with an additional ATM card.
- Local representative can operate the account with a Letter of Mandate.
- Open an NRO account jointly with an Indian resident.
- Conduct transactions online, 24×7 securely with net-banking.
- Manage your account easily with phone-banking.
- Bank from any metro in India with intercity banking.
- Pay utility bills – electricity, phone, and mobile phone – payment by a simple registration.
- Get a personalised cheque book.
- Appoint a beneficiary to operate the a/c with the nomination facility.
- Free email statement facility.
- Interest earned on these is high as banks can themselves determine interest rates.
- Nomination facility is available with both NRI and resident individuals.
- Manage your Rupee funds conveniently in India from anywhere in the world.
- Earn higher interest rates on your account
However, interest on the available balance in NRO A/c is liable to taxes. Also, holders are not allowed to repatriate this interest outside India. But amount deposited in these accounts from the sale of property can be repatriated until the acquisition cost.