The following individuals can open a NRE account without prior approval of RBI.
• Non Resident Indian (i.e. An Indian Citizen, who have gone abroad for gainful employment or for carrying on a business or vocation or for any other purpose in circumstances indicating an intention to stay outside India for an uncertain duration)
• A Person of Indian Origin (PIO)/ OCI (Overseas Citizens of India).
• Crew members having Indian Nationality or of Indian origin employed by Shipping companies/Airlines, based at Foreign Ports and residing abroad.
• Students who have gone abroad for higher studies and continue to stay abroad. Indian nationals deputed/ posted abroad or working with foreign Governments/Governments agencies, UNO and other international agencies.
Tax on NRE Accounts
Income earned in the account is exempt from income tax. If your physical cash deposits/withdrawals in one or more accounts during the Financial Year amount to ₹2 million or more, it is mandatory to possess a PAN card. If you do not have a PAN card, you should initiate the process of applying for one.
Features of NRE Accounts
- Can be opened as a savings as well as a current account.
- Allows you to make fixed and recurring deposits.
- Can be held jointly with two or more NRIs/PIO, or a resident relative* on a ‘former’ or ‘survivor’ basis*.
- A joint-holder resident relative can operate the account as a Power of Attorney (PoA) or mandate holder on the NRI’s behalf during their lifetime.
Documents Require to Open NRE Account
- Passport;
- Proof of Address: Driving license, Voter’s ID issued by the Election Commission of India, proof of possession of Aadhaar number, job card issued by NREGA, letter issued by the National Population Register, Passport;
- Non-Residential status proof such as Visa/Work Permit/Residence Permit for Indian Passport holder or OCI Card/document evidencing India connect for Overseas Passport holder;
- For seafarer’s account: Copy of passport and visa, contract letter, etc;
- Permanent Account Number (PAN) card or Form 60 for opening savings bank account (if income in India is less than 3 lakh in a financial year). Please note, a PAN card is mandatory to open a current account;
- Foreign Account Tax Compliance Act (FATCA) declaration as applicable for the United States (US) or Common Reporting Standard (CRS) for the United Kingdom (UK), Canada or any of the 100+ countries that have adopted CRS.
Operations in the NRE bank Account
Operations by Power of Attorney in favour of a resident by the non-resident account holder – Operations on the account in terms of Power of Attorney is restricted to withdrawals for permissible local payments or remittance to the account holder himself through normal banking channels.
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