In case of NRIs (non-residential Indians) the easiest way to handle their earnings and funds in the country is via a NRO account. Thus, the Non-resident Ordinary (NRO) account may be opened either as a savings bank account or a current account. Just like the NRI account, the NRO is an Indian Rupee account.
In order to open an NRO account, one initially needs to provide documentation proof that they have gained NRI status. The documents that banks generally ask for include identity proof, proof of NRI status, foreign address papers and a couple of photographs.
The resident proof that is generally offered to banks are employment papers, student status, details of dependent visa, or a print out of the overseas resident permit. The proof that you provide should be attested either by the embassy of India, notary or a bank with a branch that operates overseas.
For smooth and fast transfer of account, one can also provide an Indian address proof along with the other documents. Once the application along with the documentation is submitted, it is reviewed by the authorities and if all is in place, the savings bank account will be transferred into a NRO account.
While opening an NRO account there are certain other facts that should be kept in mind. They are-
1. An NRO account is not only meant for NRIs. Persons of Indian origin (PIO) as well as overseas citizens of India (OCI) can open this account and enjoy its benefits.
2. In order to maintain an NRO account or for that matter even a NRE account, you have to have a minimum of Rs75, 000 in it.
3. Restricted repatriability has been initiated in case of the NRO account, this means that only 1 million $ can be remitted from the account annually.
4. While one does not have to pay taxes on the amount saved in the NRE account, the NRO account is subject to tax payment. Thus, the interest earned on the amount deposited in the NRO account and the credit balance too are subject to income tax clearance.
5. One can hold a NRO account with another resident Indian as per Section 6 under the Companies Act 1956.
Thus, opting for a NRO account will be beneficial in order to save funds in the form of dividends or rent coming from the country itself. A number of benefits are also offered to customers who hold this account. In case of a NRO joint account with an Indian resident, one can also hold it as a fixed deposit account, thus keeping his savings safe and sound.