Q.966 Indian resident can deposit

rent payable to NRI in NRO

Account

Question: Dear Mr. Chand, I am a regular reader of your column plus a buyer of your book. My Bank KOTAK MAHINDRA bank has just informed me that a resident Indian cannot transfer funds to a NRO account for any reason. So how do I get my rental income now. This is verbatim from Kotak Mahindra Rgds Pradeep Answer: Reserve Bank of India [RBI] allows NRIs to: 1. Purchase property in India 2. Rent their properties in India 3. Deposit their earnings in India in their NRO accounts. Credits allowed in NRO accounts include current income like rent, dividend, pension, interest, etc. 4. Furthermore NRO account can also be held by NRIs as a ‘Joint Account’ with an Indian resident or NRI. 5. Your tenant should be able to deposit rent in your account by depositing a Cheque issued by him in your name or through online banking. Currently, following the declaration by the government of India on November 8, 2016 that Rupees 1000 & 500 currency notes are no longer legal tender in India, no one can deposit cash in the form of Rupees 1000 or 500 denomination currency notes in anyone else’s bank account. They can only deposit such currency in their own accounts until December 30, 2016. If the Kotak Bank is insisting that a Indian resident cannot deposit funds in your NRO account then I would appreciate it if you could kindly forward their communication indicating this restriction to me. I have a feeling that perhaps there has been some miscommunication somewhere. Indian residents cannot have NRO accounts of their own but they should be able to deposit their rent in an NRO account that belongs to their landlord.