Plenty of Indian residents is now grabbing opportunities to travel, study or work abroad. Surely, this would be a big step to take, with several changes taking place during this transition. From the several changes that take place, one of the many changes you will need to undertake is your banking account. For one, you need to change your account from a resident account to a Non-Resident (Ordinary)account.
This account can be opened with funds that are remitted from abroad, or that is generated in India. Additionally, there are certain restrictions on the repatriation of the foreign proceeds. For example, only an amount of 1 million USD can be remitted in a single financial year. The income that is also earned in this account is taxable and is subjected to income, wealth and gift taxation. However, this account can be held jointly with another Indian resident or another NRI providing a more flexible usage of the account.
So far, the NRO account has been a popular choice for those who are looking to convert their resident account into NRI account. Here is how you can convert your existing account into this NRI account:
Form: Most of the major banks provide a specific form for the conversion of an existing savings account to the NRO account. This form can be easily obtained from the closest bank branch or even from the bank website. All the holders of the account will be required to sign the form. Most banks allow one filled form to be used to convert all the savings account held by the same customer.
Documents: Along with the conversion request form, a new account opening form will also need to be furnished. In this form, you will need to provide proof of your overseas address. You will also need to provide a copy of your passport, valid visa or work permit. If you have your PIO card, you may need to submit a copy of it.
Funding: All the NRI accounts must have a minimum amount of Rs. 75,000 on a monthly average. If the account in question possesses a zero balance before being converted, it will be needed to be funded until it meets the minimum balance.
Submission: The documents will be required to be submitted to the bank branch you would want to open the account in. In the event the customer is already outside the country, the form and the relevant documents needs to be attested by the Indian embassy and sent to the required bank branch.
Re-designation: Once the relevant form and documents have been received and verified by the bank, the account is then re – designated as an NRO account. While this may not change the bank account number, it will be flagged as NRO account in all banks records.
After the form and documents have been received and verified by the bank, the savings account is re-designated as an NRO account. Re-designation may not change the account number, but it may be flagged off as NRO account in bank records.