As per the previous rule, fund transfers from an NRE account to an NRO account was allowed, but not the other way round.
According to an Agencies report, on Monday, the Reserve Bank of India (RBI) ruled that non-resident Indians (NRIs) would be allowed to transfer funds from Non-Resident Ordinary (NRO) accounts to Non-Resident External (NRE) accounts where the amount cannot be in excess of $1 million per financial year.
In a notification the RBI said,“On a review, it has been decided that henceforth NRI... shall be eligible to transfer funds from NRO account to NRE account from within the overall ceiling of $1 million per financial year subject to payment of tax,”
Previously, fund transfers from NRE accounts to NRO was allowed, but not the other way round.
“At present transfer of funds from NRO to NRE account is not permissible,” the RBI notification said.
While, an NRE account is for depositing income from abroad, NRO account is mainly for putting Indian incomes.
In case of NRE accounts, only NRIs can become joint account holders but for NRO accounts both resident and non-resident are allowed to become joint account holders.
The decision was taken based on recommendations of KJ Udeshi Committee which reviewed the facilities available for persons under the Foreign Exchange Management Act, 1999.
According to an Agencies report, on Monday, the Reserve Bank of India (RBI) ruled that non-resident Indians (NRIs) would be allowed to transfer funds from Non-Resident Ordinary (NRO) accounts to Non-Resident External (NRE) accounts where the amount cannot be in excess of $1 million per financial year.
In a notification the RBI said,“On a review, it has been decided that henceforth NRI... shall be eligible to transfer funds from NRO account to NRE account from within the overall ceiling of $1 million per financial year subject to payment of tax,”
Previously, fund transfers from NRE accounts to NRO was allowed, but not the other way round.
“At present transfer of funds from NRO to NRE account is not permissible,” the RBI notification said.
While, an NRE account is for depositing income from abroad, NRO account is mainly for putting Indian incomes.
In case of NRE accounts, only NRIs can become joint account holders but for NRO accounts both resident and non-resident are allowed to become joint account holders.
The decision was taken based on recommendations of KJ Udeshi Committee which reviewed the facilities available for persons under the Foreign Exchange Management Act, 1999.
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