Free decision tool
Where the money comes from decides the account; what you want to do with it decides the currency. Four choices, and the answer updates as you go.
NRE. The account for money earned abroad that you want in rupees.
An NRE account holds your foreign earnings in rupees. Interest is exempt in India while you are non-resident under FEMA, and both principal and interest can be sent back abroad without limit.
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NRE (Non-Resident External)
Rupee account for money earned abroad. Interest exempt in India while you are non-resident; principal and interest freely repatriable.
Tax: NRE interest is exempt under Section 10(4)(ii) only while you are non-resident under FEMA. Your country of residence may tax the same interest as worldwide income.
What to do with this number
The three accounts side by side
Who can hold each, what can be credited, how repatriation works, and what changes when you return.
What NRO interest really costs after tax
The bank's deduction against your treaty rate, on one deposit, for one year.
Still using your old resident account?
It has to be redesignated to NRO; leaving it as it is breaks FEMA and freezes on the next KYC.
How this is worked out
Checked against the Income-tax Act and Rules on 10 September 2026. An estimate, not advice: your return decides.
Want a CA to open the right NRI account for you?
We coordinate with your bank's NRI desk and file Form 10F / Form 41 + TRC so day-one TDS is at the treaty rate.
Senior CA who specialises in NRI tax · we deal with the tax officer, you don't
What usually comes next
One NRI tax problem usually opens a door to the next. Here's the most likely next step from where you are right now.
Most new NRIs need both. NRE for foreign earnings (tax-free interest in India under Section 10(4)(ii), fully repatriable). NRO for Indian-source income like rent or dividends (interest taxable, repatriation capped at USD 1 million per financial year under FEMA).
Interest on NRE accounts is exempt under Section 10(4)(ii), but the test is whether you are a person resident outside India under FEMA, not your residential status under Section 6 of the Income-tax Act. The two can differ, which is exactly what catches people in the year they move back. Your country of residence may still tax NRE interest under its own rules.
NRE holds your money in rupees. FCNR holds it in a foreign currency (USD, GBP, EUR, etc.), so the balance is not exposed to rupee movement. FCNR rates track international benchmarks rather than Indian ones, so the two are not directly comparable. Both are tax-free in India while you are a person resident outside India under FEMA.
Current income can go in. RBI's Master Direction on Deposits treats rent, dividend, pension and interest as a permissible credit to an NRE account, provided the bank is satisfied it really is current income and the tax on it has been deducted or paid. The line is not foreign versus Indian, it is current income versus capital receipts: sale proceeds and similar capital sums belong in an NRO account.
The day you become a resident again, your NRE account must be re-designated to a resident savings account or converted to an RFC (Resident Foreign Currency) account. RFC preserves the foreign-currency exposure and keeps the interest tax-free during the 2 to 3 year RNOR window.
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