In a financial year, you are allowed to transfer funds from NRO to NRE account up to USD 1 Million.
NRIs have two account types to manage their financial transactions in India- the Non-Resident External (NRE) account and other is Non-Resident Ordinary (NRO) account. The NRE account is necessary to transfer foreign earnings to India whereas the NRO account is used to tend income earned in India.
Transferring Money From NRO To NRE Account?
There are two most asked questions in terms of foreign payment transfers- How to transfer money to an NRE account? How to transfer money to an NRE account from the USA? So, we would like to tell you that there are several ways to transfer money to an NRE account. But note that the funds are to be transferred in Indian rupees only,
As per RBI’s announcement, “On May 7, 2012, the Reserve Bank of India (RBI) permitted funds transfer from NRO to NRE account, subject to certain conditions. Before 2012, this was not permitted. The limit of money that can be transferred is USD 1 million in a financial year.”
Before transferring money from NRO to the NRE account you must pay all your tax liabilities. It’s because the interest earned on the NRO account is taxable, whereas the NRE account is tax-free.
Documents Required To Transfer Money To NRE Account:
- Signed cheque or letter for funds transfer from NRO to NRE account.
- FEMA declaration: this document serves as proof that you are eligible to transfer your amount from NRO to the NRE account as per provisions of the FEMA law.
- A document to serve as evidence of the source of funds.
About Filling Out form 15CA
Now to transfer money to an NRE account you will need to fill up and submit Form 15CA and 15B, which you will get from a chartered accountant.
Steps To Follow To Fill Form 15CA:
- First, log in to the official website of income tax India.
- Log in with your credentials.
- After that tap on the option- ‘E-file- Prepare and Submit Online Form (Other than ITR)’.
- Then, select form 15CA.
- Fill up the form, then verify and submit it.
- Now take out the print of the form copy.
- And get the acknowledgement slip.
- Then sign your filled form and submit it to the bank.