How to Transfer Money from NRO to NRE Account?

If you are wondering, 'Is it possible to transfer money from an NRO to an NRE account?' The answer is yes; you can transfer money from the NRO to the NRE account up to USD 1 million in a calendar year.

NRIs manage their expenses in India through the Non-Resident External (NRE) and Non-Resident Ordinary (NRO) accounts. The NRE account is meant for transferring foreign earnings to India. On the other hand, the NRO account is used to manage income earned in India.

How to transfer money to the NRE account? How to transfer money to an NRE account from the USA? These are common questions many NRIs have. You can transfer money to a NRE account from abroad in several ways. The money is deposited in Indian rupees.

You cannot transfer money to a NRE account from a savings account in India. However, you can transfer money from the NRO to the NRE account. You can also transfer money from one NRE account to another.

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.

Interest on NRO accounts attracts tax. On the other hand, interest on NRE accounts is tax-free. So, it is important to pay the required taxes before you move funds from the NRO to the NRE account.

You'll need to provide the following documents to transfer funds from an NRO account to an NRE account.

• Signed cheque/ letter for funds transfer from NRO to NRE savings account.
• FEMA declaration. This document says that you are eligible to transfer funds from an NRO to an NRE account according to provisions of the FEMA law.
• Documentary evidence of source of funds
  

You need to submit forms 15CA and 15CB. Form 15CB needs to be obtained from the chartered accountant. This shows the source of your funds. Form 15CA can be filled out online.

Filling form 15CA involves the following steps.

• Step 1: Log in to the Income Tax India website, www.incometaxindiaefiling.gov.in
• Step 2: Input your User ID ( PAN) and password
• Step 3: After logging in, go to the option- 'E-file- Prepare and Submit Online Form (Other than ITR).'
• Step 4: Select form 15CA.
• Step 5: You will find instructions to fill out the form
• Step 6: The form is in four parts- Part A, Part B, Part C, and Part D.
• Step 7: Complete filling in the part that applies to you.
• Step 8: Once you have filled up the form, verify and submit
• Step 9: Click on the form and take a printout. Also take a printout of the acknowledgement slip.
• Step 10: Sign the filled-up form and submit it to the bank in duplicate
  

You should get in touch with a CA to understand the process. Understand the conditions carefully before you do a fund transfer.

Click here to get started with HDFC Bank NRI Account.

* The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances.