NRE vs NRO vs FCNR(B)
NRE (Non-Resident External)
INR-denominated, fully repatriable, interest is tax-free in India under Section 10(4)(ii). Funded only from foreign earnings.
NRO (Non-Resident Ordinary)
INR-denominated, repatriation capped at USD 1 million per financial year (subject to TDS and Form 15CA / 15CB), interest is taxable in India.
FCNR(B) (Foreign Currency Non-Resident Bank)
Foreign-currency term deposit (USD, GBP, EUR, JPY, AUD, CAD); no exchange-rate risk; interest is tax-free; fully repatriable.
Choice depends on whether the funds originated in foreign currency, whether the account holder wants exchange-rate protection, and whether interest income needs to be tax-shielded.
Who needs NRE / NRO / FCNR advisory
The right candidates are NRIs:
- Returning to India and converting NRE / NRO to resident accounts under FEMA Schedule 4.
- Selling Indian property and routing the proceeds to NRO before repatriation.
- Receiving rent from Indian property in NRO and managing the TDS.
- Wanting to repatriate inherited assets via NRO under the USD 1 million scheme.
- Re-designating accounts after a status change (resident to NRI or vice versa).
Governing provisions
The relevant statutes:
- FEMA Notification 5(R)/2016 (Deposit Regulations) — account types, eligibility, permissible debits / credits.
- FEMA Notification 13/2000 (Remittance of Assets Regulations) — USD 1 million scheme.
- Section 10(4)(ii) — NRE / FCNR interest exemption.
- Section 195 — TDS on payments to non-residents.
- Form 15CA / 15CB (renamed Form 145 / 146 under ITA 2025 from 1 April 2026) — pre-remittance reporting.
How we deliver NRE / NRO / FCNR services
- Status determination — we confirm NRI status under FEMA and Income-tax Act based on physical presence and intention.
- Account structuring — right mix of NRE / NRO / FCNR for the client’s remittance pattern.
- NRO repatriation — we coordinate documentation for the USD 1 million scheme, including the source-of-funds chain and Form 15CA / 15CB.
- TDS optimisation — lower-deduction certificate (Form 13) where applicable.
- Returning resident planning — conversion of NRE to RFC, NRO to resident, FCNR continuation up to original maturity.
- Annual ITR — we file the Indian return reporting NRO interest, capital gains, rental income, and any treaty claims.
Documents we’ll ask for
- Bank statements of NRE / NRO / FCNR accounts (last 24 months).
- Source-of-funds documentation for amounts in NRO — sale deeds, rent agreements, dividend statements, inheritance documents.
- PAN and Tax Residency Certificate.
- Passport with visa stamps and travel history (for residency status).
- Form 15CA / 15CB drafts on each pending remittance.
- If returning to India: dates of arrival, intent to stay, employer letter (if applicable).
How long it takes and what it costs
Single-instance Form 15CA / 15CB takes 2–3 working days. NRO repatriation under USD 1 million typically resolves within 5–7 working days of complete documentation. Returning-resident account conversion is processed by the bank within 1–2 weeks of submission. We offer fixed-fee per remittance and an annual retainer covering all NRE / NRO / FCNR maintenance, status changes and ITR.
Frequently asked questions
Is NRE interest still fully tax-free?
Yes, under Section 10(4)(ii), provided the account holder is a non-resident under FEMA. The exemption ends if the account is converted to resident upon return.
How does the USD 1 million NRO scheme work?
An NRI can repatriate up to USD 1 million per financial year out of NRO funds, subject to source-of-funds proof, TDS clearance and Form 15CA / 15CB. The scheme aggregates across multiple banks.
What happens to my NRE / FCNR account when I move back to India?
NRE must be converted to resident or RFC within reasonable time; FCNR can continue up to the original maturity, after which it converts to resident (interest becomes taxable).
Do I need to file an Indian ITR if my only Indian income is NRO interest?
Yes, if the gross income exceeds the basic exemption limit. NRO interest is taxable; TDS at 30% is deducted; the ITR claims any treaty relief or refund of excess TDS.
Talk to a partner.
A 30-minute call with a partner — no deck, no follow-up email blasts. Just a read on whether we’re the right team to handle your NRE / NRO / FCNR taxation & repatriation.