NRO Account To NRE Account

I get lot of enquiries from my NRI clients related to process of transferring funds from NRO to NRE or to overseas bank accounts. Sometime, they want to transfer funds from their saving account to NRE account or overseas bank account. Let me try to explain it and the process involved in simple points for better understanding:

  1. Inward remittance i.e transfer from abroad to India is not restricted as it increases foreign exchange in India.
  2. Outward remittance i.e transfer from India to abroad is restricted as it reduces Indian Foreign exchange.
  3. Two laws which governs outward remittance/repatriation is FEMA and Indian Income Tax law. Once shall compliance both law while taking money out of India.
  4. Definition of NRI as per Income Tax Act is different as there in FEMA law.
  5. As per Income Tax, residential status depends on number of days stayed in India.
  6. As per FEMA, a person becomes a non-resident once he goes out of India and has no intention to come back in near future. Non-resident for FEMA purpose in loose terms means Indian citizen staying abroad or foreign citizen having an OCI card.
  7. As per FEMA, a non-resident can’t hold saving account. He should open an NRO and NRE account within reasonable time frame.
  8. It means if an NRI is holding Saving account then he cannot transfer funds abroad directly from that account. He has to open NRO and NRE accounts. Infact, he is not allowed to keep saving account at all.
  9. People get confused with Liberalized remittance Scheme (LRS) sometime in which funds get directly transferred from resident saving account to overseas bank account. But please note, it is applicable only in case when resident is transferring their funds.
  10. NRO account is a special account governed by FEMA, in which an NRI can deposits funds from India or from his NRE or overseas bank account.
  11. NRE account is a special account governed by FEMA, in which an NRI can deposits funds from outside India i.e foreign countries. But to transfer funds from NRO account, he needs to submit few documents and certificate to bank depending on his case.
  12. It means transfer from NRO to NRE is restricted to control Indian foreign exchange reserves. It is important for any country’s economy and save it at the time of financial crisis.
  13.  A person can transfer USD 1 million (approx. INR 7.8 crore) from his NRO to NRE account in one financial year (period starting from 1st Apr to 31st Mar).
  14. If a person wants to repatriate more than USD 1 million, he has to take RBI or concerned authorities permission.
  15. Repatriation process involves submitting CA certificate (15cb certificate) to bank in which CA certifies that applicable income taxes are duly paid on the funds. He does his own due diligence and will ask for required documents to make himself satisfied that certificate can be issued.

Process of transferring your own money from NRO account to NRE account by an NRI.

  1. First approach your NRO bank and ask the list of documents they need to do the needful.
  2. They will ask you to fill form A2 as per FEMA law. In A2 form you have to fill then amount to be remitted, source of funds, purpose of transferring funds etc.
  3. Second, they will ask you submit 15ca and 15cb certificate in accordance with Income Tax Act. 
  4. 15ca is a declaration by remitter. This is filed online by login to remitter’s income tax account.
  5. 15cb is a Chartered Accountant certificate. It is filed by CA by login to his own income tax account. He has to apply his digital signature on it.
  6. Before issuing 15cb, CA will make sure that applicable taxes are duly paid on those funds. 
  7. Bank may ask for few other documents like tax returns, tax challans, sale deeds, gift declaration/deed depending on case to case.

Disclaimer: This article is just to make you understand about very basics of the concepts. Please take Professional advice in case you have any doubts.

Or You can write to me at or call/whatsapp me at +91 9910075924.

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