Full Form of NRO
The abbreviation NRO stands for Non-Resident Ordinary. It is primarily used in the context of banking and finance, especially in India.
Key Points about NRO:
- Purpose:
NRO accounts are designed for non-resident Indians (NRIs) to manage their income earned in India. This includes rent, dividends, pensions, and other sources of income.
Currency:
The account can hold funds in Indian Rupees (INR) only.
Types of Accounts:
NRO accounts can be opened as:
- Savings Accounts
- Current Accounts
- Fixed Deposits
Tax Implications:
Interest earned on NRO accounts is subject to Income Tax in India, and TDS (Tax Deducted at Source) is applicable.
Repatriation:
Funds from NRO accounts can be repatriated, but there are limits and specific regulations that apply. Typically, up to $1 million can be repatriated in a financial year, subject to compliance with tax regulations.
Joint Accounts:
- NRO accounts can be opened jointly with other NRIs or with residents of India, but there are specific guidelines governing such arrangements.
Conclusion
In summary, NRO accounts serve as a crucial financial tool for NRIs to manage their Indian income while ensuring compliance with Indian tax laws. Understanding the features and regulations associated with NRO accounts is essential for effective financial management.