Non-Resident External Account (NRE) – NRE Accounts are maintained in INR. When you deposit the money in the NRE Account, the foreign currency is converted to Indian rupees at the prevailing foreign exchange rates. You can save here your income earned abroad.
The principal and the interest amount accrued on it, are fully repatriable, ie you can take out the amount out of India any time. The Interest income earned in this account is tax free. NRE account may be maintained in any form, e.g. savings, current, recurring or fixed deposit account etc. Joint accounts can be opened by two or more NRIs and/or PIOs or by an NRI/PIO with a resident relative(s) on ‘former or survivor’ basis. However, during the life time of the NRI/PIO account holder, the resident relative can operate the account only as a Power of Attorney holder. Permissible credits– Credits permitted to this account as inward remittance are interest accruing on the account, interest on investment, transfer from other NRE/ FCNR(B) accounts, maturity proceeds if such investments were made from this account or through inward remittance. Current income like rent, dividend, pension, interest etc. will be construed as a permissible credit. Permissible debits– The debits allowed from this account are local disbursements, transfer to other NRE/ FCNR (B) and investments in India.
