Non-Resident Ordinary Account (NRO) – This account type is generally used by NRI’s to save their Indian income. Rent income, dividends from investments, or Pension funds can be paid into these accounts. It is used to deposit your income earned from India or abroad.
The accounts may be maintained in any form, e.g. savings, current, recurring or fixed deposit account. The accounts may be held jointly with residents on ‘former of survivor’ basis. NRIs and PIOs may hold an NRO account jointly with other NRIs and PIOs. Permissible credit- Inward remittances from outside India, legitimate dues in India and transfers from other NRO accounts are permitted. Rupee gift/ loan made by a resident to a NRI/PIO relative within the limits prescribed under the Liberalised Remittance Scheme may be credited to the latter’s NRO account. Permissible debits- Local payments, transfers to other NRO accounts or remittance of current income abroad. Apart from these, balances in the NRO account cannot be repatriated abroad except by NRIs and PIOs up to USD 1 million. Funds can be transferred to NRE account within this USD 1 Million facility. The interest earned on an NRO fixed deposit is taxed at a rate of 30%.