Accounts for Non-Residents: NRE, NRO, FCNR & RFC
NRIs and PIOs/OCIs primarily use three account types, each answering a different question: NRE (rupee-denominated, holds foreign-earned income, fully repatriable, tax-exempt interest, but carries INR exchange rate exposure), NRO (rupee-denominated, holds India-sourced income and redesignated resident funds, repatriation capped at USD 1 million/year with CA-certified Form 15CB and Form 15CA, interest fully taxable under Section 195 with DTAA relief potentially available), and FCNR(B) (a foreign-currency-denominated term deposit only, fully repatriable and tax-exempt like NRE but without INR exchange rate exposure, available in major currencies for 1–5 year tenures). We also cover RFC accounts — for returning NRIs to hold foreign currency assets as residents without immediate conversion — and the often-missed FEMA requirement to redesignate resident accounts to NRO (or appropriately open NRE/FCNR) at the point residential status changes, rather than continuing to operate a resident account after becoming an NRI.