There are two main types of accounts in India. NRE and NRO both are maintained in INR.
| NRE | NRO | |
| Purpose | For sending monies to India from another country | For funds generated in India like rental income |
| Repatriation | Fully repatriable i.e. all funds in this account can be sent out of India without any restrictions. | Repatriation limit of USD one million per financial year. Plus, paperwork needs to be completed before sending funds out of India.1 |
Paperwork to remit funds out of India or to convert NRO funds into NRE:
- NRE/NRO remittance forms
NRE does not need any other documents, documents listed below are for NRO: - Form A2 – Funds transfer form. Purpose code to use it S1301 – Remittance for family maintenance and savings
- Please ask the Bank for the BSR Code for the Branch. Indian CA will need it.
- Form 15CB – Chartered Accountant certificate from Indian CA
- Form 15 CA – Self declaration from Indian CA
- UDIN from Indian CA
- Source of funds like contract notes of share sale etc. from client or his Indian broker.
Bankers will need original wet signature forms and self-attested documents so allow sufficient time for courier.
A useful blog I found on this subject.
August 2021
Recently a client wished to invest funds in the Indian stock market and he contacted his old bank where he had a dormant account, after lot of paperwork and telephone calls finally the bank was able to activated NRO accounts and client started sending funds to India in his NRO account.
We realised that this is not the optimum solution for the client as he is sending his overseas earnings to India and will face restrictions in the future if funds are sent via NRO account, see above for restrictions.
We have requested the banker to change the arrangement to NRE account, let see how things turn up.
November 2021
NRE PIS account opened after months of to and fro.
December 2021
Client wanted to transfer shares held in NRO account to NRE account but due to lack of clear rules, this project was abandoned.
Roy Accountants 