NRIs can operate their finances in India through two accounts- the Non Resident External (NRE) account and the Non Resident Ordinary (NRO) account. NRE accounts are meant for transferring foreign earnings to India. If an NRI wants to carry out business activities in India he can use NRE accounts. NRE accounts are mostly used by NRIs to make direct investment in India. Many people ask- can I deposit in NRE account from India? The answer is no. You can only transfer funds to your NRE account from abroad or from a NRO account under certain conditions. Transferring money to NRE account has several benefits. We take a look.
Send as much money you want: The Foreign Exchange Management Act (FEMA) does not specify any limit on the amount of money you send to a NRE account. However, this income needs to be earned legally in your country of residence. If you are transferring very high amounts you may be asked to explain your source of funds.
Multiple modes of transfer: How to transfer money to NRE account in India? How to transfer money to NRE account from USA? These are common questions many NRIs have. There are several ways in which you can transfer money to your NRE savings account. You can use wire transfers or money transfer services offered by your bank. You can do a transfer through by depositing or mailing foreign currency cheques and demand drafts. All these different modes of money transfer come with a specific advantages and disadvantages. You can choose the mode which is the most convenient for you.
Earn higher interest rates: You can earn high interest rates of 4 percent per annum for end of the day balances. This interest rate is offered for balances equal to or above Rs.50 lakhs. For balances less than 50 lakh, the interest earned is 3.5 percent.
Tax benefits: NRE accounts come with tax benefits. The principal amount is exempt from tax. You do not have to pay any tax on interest you earn in India. There is no wealth tax or gift tax too. As long as you pay taxes on your income in the country of residence, any money you transfer to a NRE account in India is not taxable.
Transfer your funds from any place outside India: When you transfer money to a NRE account, your money is converted to Indian rupees when it is deposited. This allows you to transfer money to your NRI account in any currency and then withdraw it in Indian rupees. You can use these funds for various investments you make in India whether it is in deposits, mutual funds or property.
Access your account anytime: NRE accounts come with an international ATM-cum debit card. This lets you withdraw money across all ATMs and bank branches in India 24X7. You can also access the account safely and securely 24X7 through Internet banking.
NRE accounts are thus tailor-made to transfer money to for use in India. Click here to get started with HDFC Bank NRI Account.
* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.
What is an NRI account
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