You cannot use your regular Savings Account when you move overseas. In such cases, you need to consider a Non-Resident Indian or NRI Account. You should be aware of the benefits of the accounts so that you can operate them efficiently. Open an account and enjoy the following benefits, be it for income or investment purposes:
Tax benefits
Choosing the appropriate NRI Account is better for better interest taxation. Savings in a Non-Resident Ordinary or NRO Account are subject to certain tax deductions. However, interest received on your Non-Resident External or NRE Account is tax-free in India. After paying the necessary taxes, you can transfer money from your NRO to your NRE account.
Minimum balance requirement
You need not always keep the NRE and NRO accounts fully stocked. Banks have drastically lowered the minimum balance requirements.
FCNR deposit
Foreign Currency Deposits are the other primary NRI Bank Account. Therefore, you can open an FCNR and receive interest in foreign currencies to save your foreign currency profits. In India, interest from FCNR deposits is also tax-free.
Convenience
Convenience is another helpful factor. It is simple to open an NRI account online without visiting the branch personally. You only need to fill out the form, attach a self-attested copy of the necessary documents, and courier it.
Simple currency transfers to India
One can deposit revenue earned abroad in such accounts. The money is then easily accessible at any Indian bank branch. Opening an NRI Savings Account makes sending money from abroad to India simpler. Thanks to the current banking relationship, you can also anticipate favourable exchange rates for such transfers.
Better interest rates
Central banks worldwide focus on lowering interest rates. Some banks offer very low-interest accounts. NRE Accounts often have higher interest rates. An NRI Account might also assist you in getting better returns through their FDs.
Operational efficiency
You can conduct financial operations within India using NRO Accounts. In most cases, the bank will let you register the operational mandate on your behalf. You can write a license like this for your spouse, siblings, parents, and other family members. A joint account permits shared operations with a resident Indian using an NRO Account.
Tax exemptions for NRE Accounts
Under the current tax legislation in India, interest income on NRE accounts is exempted from income tax. This exemption prevents the bank from deducting taxes from the interest income earned on NRE Savings or NRE FDs.
