Nre account

Hi there, I live overseas from last 3-4 years. I just wanted to know do I need to open NRE account in India if I want to transfer money from overseas? What will happen if I dont open NRE account and I transfer money to my normal savings account in India. I understand there is no tax payable in NRE account but is there any tax payable if I have transfered in my normal savings account?

Thanks
Rav
Asked 1 year ago in Income Tax from Ahmedabad, Gujarat
Hi, 
U need to open NRE Account
Shyam Sunder Modani
CA, Hyderabad
955 Answers
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A non resident Indian like you can open  NRE account as welll as NRO account .  The NRE Account are INR account as well as the Foreign Currency account which are open with any Bank in India and it is considered as a account outside India . However the NRO account are the normal bank account in INR and are considered  the account within India . A credit from outside India in both the account are tax free and there is no tax .  However the liability of tax arises only when there is transfer of fund from NRO account to NRE account  or any other credit in the NRE account , from India .

So you can transfer your fund in the NRE or NRO account , however if the funds are repatriation basis , better route through it with the NRE account .
Prakash Sinha
CA, Delhi
112 Answers
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If you transfer money to your normal NRI Savings account and not NRE account, any interest earned on such income will be assessed to tax and the actual tax liability depends upon the quantum of interest earned. However, you may attract TDS for which you will need to file IT return to claim refund, if no tax is payable.

If you intend to repatriate your money from your NRI Savings account back to you, you need to get CA certificate for such transfer. 

In the case of NRE account, the account will be held in foreign currency and you will not be exposed to the risk of currency fluctuation.
B Vijaya Kumar
CA, Hyderabad
290 Answers
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