Transfer from NRO to NRE in

two days . . .

Transfer from NRO account to NRE accounts became possible when the Reserve Bank of India (RBI) on May 7, 2012 the Reserve Bank of India (RBI) permitted such transfers subject to certain conditions. Currently as per RBI rules up to USD 1 million in a calendar year can be transferred from NRO to NRE provided the specified conditions are met by the account holder. When would NRIs want to transfer from NRO to NRE? Generally any money that is deposited in India from sources such as the sale of property acquired or perhaps inherited must first be deposited in an NRO account. Then after providing proof that taxes have been paid on the funds received, account holders can choose to repatriate the funds abroad if they wish or simply have them transferred to their NRE account. By having such funds deposited in their NRE accounts it gives them the option to move their money abroad using your banks outward remittance facility online whenever the account holder wishes to do so. For instance when exchange rates are favorable.

My Personal Experience –

Transferringfrom NRO to NRE with Axis

Bank - July 2023.

Here is how this went. 1. Sold a property in India 2. Buyer deducted 20% as TDS plus applicable cess tax etc. The balance was paid to us by way of online deposit to our NRO account. 3. The TDS deduction amount is paid to the Indian tax authorities by the buyer on the seller’s behalf. 4. A tax return must be filed to get a refund of the TDS deducted. A Chartered Accountant (CA) in India can help sort the tax filling and forms required to repatriated funds obtained from such transactions. 5. Having decided to transfer the funds received in our NRO account to our NRE account. We approached Axis bank where we have both NRO & NRE accounts to help transfer funds. 6. We were advised to submit the following documents. a. Axis bank transfer form. Other banks will have their own version of this form. b. Form 15CA – Any person making a remittance has to deposit a Form 15CA online with the Indian Tax Authorities. After accessing the Form on the Indian tax filling and submitting it after filling the information required. A printout of Form 15CA can be taken. NRIs may find it easier to let their CA handle this for them. Our CA provided this service for us. You will have to provide your CA with your PAN number. We were also asked to provide a digital signature to the CA so they could sign on our behalf. The cost of digital signature was Rs. 2000/- and the signature is valid for two years. c. Form 15CB – Form 15CB is issued by a CA and certifies that tax deduction as per the income tax rules has been done. This is proof that any tax due on the amount of money being repatriated has been fully paid. d. Axis Bank also wanted us to provide a copy of the sale deed. Our attempts to sort this process by email only led to delays and misunderstanding. As we were planning a trip to Leh Ladakh India in July 2023, we decided to hand over the documents required personally to our bank after arrival in India. My wife and I arrived in India on July 5, 2023 and visited our Axis Bank branch in Dwarka, Delhi the same day. the bank manager introduced us to Mr. Rahul Sinha, Relationship Manager – NRI Banking at Axis Bank. We submitted the required documents to Mr. Sinha around 12 Noon on July 5, 2023. He checked the documents and found an error in our Form 15CB. We contacted our CA by telephone and Rahul explained what was required. Our CA sent a fresh copy of Form 15CB within a few minutes. This was found to be correct by Rahul and we were told the transfer would be done either by the end of the day or tomorrow. And Yes! Our transfer from NRO account to NRE account was done the next day, July 7, 2023. Please note that the ease and speed of such transactions could vary depending on the bank employee's familiarity with the procedure. Knowledgeable staff could facilitate the process efficiently, but if the person handling the documents is unaware of the procedure, it may lead to delays and frustrations for NRI account holders. Benefit of NRE account verses NRO accounts The main benefit I find is Taxability. All deposits in an NRE account are free from Indian income tax. This includes the principal amount as well as the interest earned. Also you are free to repatriate funds from this account anytime from abroad using outward remittance online. On the other hand, the interest earned on an NRO account, however, is subject to Tax Deductible at Source (TDS). To get TDS deduction refund, you must file a tax return in India. Most NRIs I assume don’t bother doing this.