NRE: repatriable + tax-free. NRO: Indian income + taxable (DTAA lower TDS). FCNR: foreign currency FD, no currency risk + tax-free. RFC for returning NRIs.
NRI ACCOUNT TYPES: (1) NRE (Non-Resident External): for foreign earnings. FULLY REPATRIABLE. Interest TAX-FREE in India. INR-denominated. (2) NRO (Non-Resident Ordinary): for Indian income (rent, dividends, pension). Interest TAXABLE 30% TDS (or DTAA lower). Repatriation up to $1M/year. (3) FCNR (Foreign Currency Non-Resident): FD in foreign currency (USD, GBP, EUR). NO currency risk. Interest TAX-FREE. 1-5 year tenure. STRATEGIC: NRE for savings, NRO for Indian income, FCNR for currency protection.
NRE ACCOUNT: (1) Interest 100% TAX-FREE in India. (2) FULLY REPATRIABLE (principal + interest). (3) Joint with NRI only (not resident). (4) INR-denominated — currency risk on conversion. (5) Funded by FOREIGN earnings only. (6) Savings 3-4% + FD 6-7%. STRATEGIC: park foreign salary in NRE. Tax-free + repatriable. CONVERT to resident account on returning to India (or RFC account during RNOR).
NRO ACCOUNT TAX: (1) Interest TAXABLE. (2) TDS 30% (without DTAA) or 10-15% (with TRC + Form 10F via DTAA). (3) For INDIAN income (rent, dividends, pension, capital gains). (4) Repatriation: up to $1M per FY (with CA certificate Form 15CB + 15CA). (5) JOINT with resident allowed. STRATEGIC: NRO for Indian-source income. File ITR to claim TDS refund if total income low. Use Section 197 lower TDS certificate for large balances.
FCNR (B) ACCOUNT: (1) FIXED DEPOSIT in foreign currency (USD, GBP, EUR, JPY, etc.). (2) NO CURRENCY RISK — held in foreign currency. (3) Interest TAX-FREE in India. (4) FULLY REPATRIABLE. (5) Tenure 1-5 years. (6) Rates lower than INR FDs (foreign currency rates). STRATEGIC: NRIs worried about INR depreciation use FCNR. Protects principal in hard currency. IDEAL for NRIs planning to stay abroad + repatriate later.
NRI BANKING STRATEGY: (1) NRE: tax-free foreign savings + repatriable. (2) NRO: Indian income, manage TDS via DTAA. (3) FCNR: currency protection for hard-currency holders. (4) RETURNING TO INDIA: convert NRE/NRO to RESIDENT or RFC (Resident Foreign Currency) account. (5) RNOR period: RFC account for foreign income. (6) TRC + Form 10F to reduce NRO TDS. (7) Form 15CA/CB for repatriation > limits. (8) DON'T keep resident savings in NRE (illegal — only foreign earnings). (9) FEMA compliance critical. CONSULT NRI-specialist CA + banker.