What are the types of NRI accounts based on repatriability?

What are the types of NRI accounts based on repatriability?

  1. NRI-NRE Account: Non-resident (external) Account, which allows only foreign credits from outside India into the account. NRE accounts allow free repatriation of funds outside India without any limits. NRE Accounts offer repatriation and tax benefits on certain income and Double Taxation Avoidance Agreements (DTAA).

  2. NRI-NRO Account: NRO stands for non-resident (ordinary) account. Such accounts allow both foreign currency credits from outside India as well as rupee credits from within India. NRO accounts allow the principal balance to only be repatriated up to specified limits. NRO accounts are more suitable if one needs to accept rupee transactions.


RELATED FACT

NRI clients can invest through SEBI-registered brokers by opening a Trading and DP Account in NRI status, with the option to open both NRE and NRO Trading Accounts.

NRE clients need two bank accounts (NRE PIS and Savings) and a PIS letter, while NRO clients only need a savings account, as PIS is not required.

NRE Accounts offer repatriation benefits, tax exemptions, and DTAA advantages, with transactions reported to the RBI.

Investments are subject to company-wise limits, and NRI-NRO clients can trade equity derivatives with a custodian.

NRIs cannot engage in intra-day trades, short-selling, or trade in commodity/currency derivatives.

Caution list securities require RBI approval if near the investment threshold, while trading in banned list securities is prohibited.