INCOME TAX16 Sept 2026
Moving funds from NRO to NRE? Crucial tax rules and transfer limits you need to know | Mint
Non-Resident Indians (NRIs) can move money from their NRO (Non-Resident Ordinary) account to an NRE (Non-Resident External) account, but tax and foreign exchange rules apply. NRO interest faces tax deduction at source (TDS) in India, while NRE interest is tax-free. NRO balances can be sent abroad only up to $1 million per financial year. Keep Form 145 or Form 146 ready before you transfer.
Key Statutory Highlights
- NRIs are allowed to shift funds from an NRO account to an NRE account, and can also transfer money between separate NRE accounts.
- Interest earned on NRO deposits faces tax deduction at source in India, while interest earned on NRE deposits is exempt from income tax in India.
- NRO balances can be repatriated outside India up to $1 million per financial year, and that limit applies across all NRO accounts held by the NRI in that year.
Actionable Advice for Taxpayers / Founders:Before moving a large amount out of an NRO account, check the tax and foreign exchange rules that apply, keep Form 145 or Form 146 ready to show the source of funds and tax paid, and confirm the paperwork with your bank or a Chartered Accountant.
Statutory Disclaimer: TaxQue Shorts are AI-assisted editorial briefs for compliance awareness. This brief has not passed every source check; confirm the original notification before acting. This does not constitute formal legal or CA counsel.
TaxQue News Desk
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