If you are a Non-Resident Indian (NRI) staying and earning abroad, it is a good idea to go for NRI banking services. It supports and handles your financial needs for people living in India. The same thing is relevant if you have earnings in India. There are three kinds of accounts – the Non-Resident Ordinary (NRO) Savings Account, Foreign Currency Non-Resident Account, and Non-Resident External (NRE) Savings Account
Non-residential external savings account (NRE) – Under this type of NRI account, you can move the foreign currency you earn to your family residing in India. These accounts are exempt from any kind of tax, and the interest earned through these accounts are not taxable.
Non-resident ordinary account (NRO) – If you have a steady flow of income through means of pensions, dividends, rents, interest rates, etc and have other local expenditures, then NRO account is appropriate while you stay out of India. The incomes that get generated or credited in this account need to be within India. This account can only have Indian currency denomination. All incomes received are taxable as per Indian Income Tax act.
Foreign currency non-resident fixed deposit account (FCNR) – This account is advantageous when you want to keep the income you have earned in foreign currency denomination. The account protects your funds from exchange rate fluctuations As this account can be in foreign currency, the source of funds should be from outside India. Income earned does not get taxed in India.
An NRE account is for your foreign income earned outside India and is not taxable. An NRO account is for income earned within India through rent, pension and dividend. An FCNR is ideal for NRIs, who have moved back to India for good after being residents abroad for an uninterrupted period of more than one year. Once you get the following documents required for NRI account, any of these accounts can be opened. Banking services in India offer lots of benefits to NRIs.
Documents required for NRI account
Like all savings accounts, some documents are essential for opening NRI Account. Here’s a list:
- Passport details and individual details of the applicant. A photocopy is required for the same.
- Permanent Account Number (PAN) or Form 60 copy if PAN card is missing.
- Valid visa or work permit copy is important for an NRI Account.
- Passport-size photographs of the applicant.
- Besides all other NRI account-related documents that are mandatory, one requires to authenticate the overseas or Indian address.
- Along with the documentation required for opening an NRI account in India, you must have an initial payment cheque or demand draft from your own account. For this purpose, you need to maintain an average monthly balance.
In case you are unable to visit your branch to open an account, and are located in a non-FATF country, all photocopies of the above documentation must get verified by the Indian Consulate or by a foreign banker. Once you submit the documents necessary for an NRI account in India, the account can get used for transactions.