Introduction: Understanding global finance can be challenging for Non-Resident Indians (NRIs), particularly when transitioning from a Non-Resident Ordinary (NRO) account to a Non-Resident External (NRE) account. Successfully navigating this process relies on understanding the guidelines set by the Reserve Bank of India (RBI) and following key steps. We’ll guide you through each stage of the NRO to NRE fund transfer, ensuring a smooth and legally compliant financial transition.
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NRO to NRE Fund Transfer – Steps
Step 1: Understand the Rules:
To kickstart your financial journey, delve into the guidelines set by the RBI. Adhering to these rules is essential for a trouble-free fund transfer without legal complications. The transition from NRO to NRE demands attention to detail and strict compliance with regulatory frameworks, laying the foundation for subsequent steps.
Step 2: Verify Your KYC Details:
Facilitating a smooth transaction requires verifying and updating your Know Your Customer (KYC) details. Ensure you have the following:
- ID Proof: Photocopy of Valid Passport.
- ID Proof: Copy of PAN/ Form 60 (in absence of PAN)
- Proof of NRI Status: Copy of valid visa/ work permit / Overseas Resident Card.
- Address Proof: The address on the document must match the application form.
Keeping all information up-to-date is crucial, as outdated or inaccurate KYC information can lead to complications.
Step 3: Open an NRE Account:
The key to a seamless transition is opening an NRE account. Choose a reputable financial institution authorised for foreign exchange transactions and initiate the process of opening your NRE account. HDFC, ICICI, SBI and Axis banks are some reputable options. This step sets the stage for the subsequent phases of the transfer process.
Step 4: Get an Account Closure Certificate (ACC):
Obtain an Account Closure Certificate (ACC) from your bank. This document confirms that all tax obligations related to your NRO account have been settled, making you eligible for the fund transfer to the NRE account.
Step 5: Currency Conversion:
This step is only necessary if you want to transfer your funds in a foreign currency. Many banks provide Foreign Currency Non-Resident (FCNR) accounts, streamlining the process of converting INR to foreign currency and facilitating the subsequent steps in the transfer process.
Step 6: Start the Transfer:
Initiate the fund transfer through your bank’s online portal or by visiting a branch in person. Provide accurate recipient account details, including the account number, bank name, and SWIFT code, ensuring utmost accuracy for a successful transfer.
Documents needed for NRO to NRE transfer:
- A signed cheque for the transfer from the NRO to the NRE account
- Form to transfer funds from NRO to NRE along with FEMA declaration
- Proof of funds source: documents showing where the money came from (e.g., salary payslip).
- Form 15CA: self-declaration stating you’ve paid any taxes due.
- Form 15CB: certified by a CA, confirming the tax amount you owe (if any).
How to transfers funds from NRO account to NRE account
1. Log in: to your bank’s net banking or mobile app.
2. Select payment: Click “Pay” or similar option.
3. Choose NRE transfer: Select “Transfer to NRE” or equivalent.
4. Pick accounts: Choose your NRE account for the money to go to, and your NRO account as the source.
5. Enter details: Fill in the transfer amount and upload required documents.
6. Complete transfer: Use a one-time password (OTP) sent to your phone to confirm.
Step 7: Confirm the Transfer:
After the transfer, confirm the successful crediting of funds into your NRE account. Scrutinize your account statement or contact your bank for confirmation, validating the monetary transmission and ensuring a seamless transfer from the NRO account to the NRE account.
Conclusion: In conclusion, the transfer of funds from an NRO to an NRE account, guided by regulatory adherence and precise execution, empowers NRIs to effectively manage their international portfolios. This comprehensive guide serves as a reliable companion in the complex realm of cross-border fund administration, facilitating a seamless transition, and optimizing one’s global financial portfolio.
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About the Author: CA Arun Tiwari, a Chartered Accountant and former EY employee, serves as the Chief Consultant of the NRI Desk and Influencer Desk at AKT Associates. He specialises in offering consultancy services tailored for NRIs and is dedicated to creating educational content to raise awareness within the NRI community.
Author Bio
Income tax forms 15CA and 15CB are not required when funds are transferred from ‘self to self’ or to children ( free gift). Only the ‘autorised dealer ( bank)’ needs to be satisfied that the funds are Indian tax paid, if any. Only A2 form with correct code is required. Thanks