Managing finances across borders can be complex for Non-Resident Indians (NRIs), especially when dealing with NRO and NRE accounts. One of the most frequently asked questions is, “Can you transfer money from NRO account?” The answer is yes, but the process involves specific regulations, documentation, and tax compliance.
In this guide, we will explore how to transfer money from NRO account, the RBI guidelines, taxation rules, and essential steps to ensure a hassle-free repatriation of funds.
Table of contents
- Can You Transfer Money from NRO Account?
- Conditions for Transferring Money from NRO Account
- How to Transfer Money from NRO Account?
- Documents Required to Transfer Money From NRO Account to NRE or Foreign Account
- Which Banks Allow Money Transfers from NRO Accounts?
- Key Considerations When You Transfer Money From NRO Account
- FAQs About Transfer Money From NRO Account
Can You Transfer Money from NRO Account?
Yes, you can transfer money from NRO account, but there are some guidelines. As per the RBI guidelines, an NRI can transfer up to USD 1 million per financial year from an NRO account to a foreign account or an NRE account, subject to applicable taxes and documentation.
A Non-Resident Ordinary (NRO) account is one of the most common accounts in India by non-residents and is specifically created for NRIs to manage earnings generated in India, such as:
- Dividends from investments
- Rent from properties
- Pensions or any other earnings
In an NRO account money can be deposited in INR or foreign currency, but withdrawals are allowed only in INR.
Also, if you want to initiate domestic wire transfers from an NRO account, ensure you comply with RBI regulations, submit the required documentation, and account for tax deductions, if applicable.
Also Read: Best Banks in India for Inward Remittance: List of Top Banks
Conditions for Transferring Money from NRO Account
Transferring money from NRO account is subject to specific conditions, including the repatriation limit, tax compliance, documentation requirements, clearance of Form 15CA and 15CB, submission of a transfer request, and bank verification.
Let’s understand the conditions for transferring money from NRO account one by one:
- Repatriation Limit: From NRO account, NRIs can transfer money up to 1 million dollars per financial year (from April to March), provided they meet tax compliance requirements.
- Tax Compliance: The amount to be transferred must be tax-paid. The interest earned in an NRO account is taxable, unlike an NRE account, which is tax-free.
- Documentation Requirements: Banks require Form 15CA and Form 15CB for tax clearance before processing the transfer.
- Form 15CA: Declaration by the remitter (NRI) stating tax compliance.
- Form 15CB: Certification from a CA (Chartered Accountant) confirming tax liability.
These conditions are imposed to prevent illegal financial activities and ensure compliance with Indian tax laws.
How to Transfer Money from NRO Account?
Transferring money from NRO account involves specific steps, including fulfilling documentation requirements and adhering to RBI regulations. If you want to transfer money from an NRO to NRE account or Foreign Account, follow these steps:
- Tax Compliance: Ensure that applicable taxes (if any) have been duly paid on the funds to be transferred.
- Obtain Tax Clearance
- Form 15CA: A declaration form that the remitter submits online to the Income Tax Department.
- Form 15CB: A certificate issued by a Chartered Accountant confirming that the taxes have been paid on the funds being transferred.
- Submit Transfer Request to the Bank: Once you have Form 15CA and Form 15CB, submit the filled forms to your bank along with:
- A signed request letter
- A self-declaration of FEMA compliance
- Proof of source of funds
- Bank Verification: The bank will process and verify the request before initiating the transfer.
- Fund Transfer: Once verified, funds will be transferred to your NRE account or foreign account from NRO account.
Also Read: What is Inward Remittance? Examples, Process, Documents
Documents Required to Transfer Money From NRO Account to NRE or Foreign Account
Transferring money from a NRO account to a Non-Resident External (NRE) account or making foreign transfers requires careful documentation to comply with Indian banking and tax regulations.
Providing the correct paperwork ensures a seamless process and avoids delays or compliance issues. To ensure a smooth transfer process, you must submit the following documents:
- Copy of PAN Card (Permanent Account Number)
- Bank statement of NRO account
- Form 15CA & 15CB (for tax compliance)
- Source of funds proof (e.g., rental agreement, dividend receipt, etc.)
- KYC documents (passport, visa, and proof of residency abroad)
Which Banks Allow Money Transfers from NRO Accounts?
Most leading Indian banks facilitate transfer money from NRO account to a NRE and foreign accounts including SBI, HDFC, ICICI, Axis, Kotak Mahindra, and others.
However, each bank has its own set of procedures, documentation requirements, and charges. To ensure a smooth transfer, it’s important to review your bank’s specific guidelines in advance.
Key Considerations When You Transfer Money From NRO Account
Transferring money from NRO account involves several important considerations, including taxation, regulatory compliance, and banking charges. Let’s explore the key factors you need to keep in mind when transferring funds from an NRO account.
1. Taxation on NRO Account Transfers
- Interest earned on an NRO account is subject to TDS (Tax Deducted at Source) at 30%.
- Taxes must be settled before initiating an NRO to NRE transfer or foreign remittance.
2. RBI and FEMA Regulations
- All transactions must comply with Foreign Exchange Management Act (FEMA) guidelines.
- Banks may request additional documentation to ensure compliance.
3. Bank Charges and Exchange Rates
- Banks may charge a processing fee for NRO to NRE transfers and overseas remittances.
- The exchange rate at the time of transfer affects the final amount received in a foreign account.
4. You can claim a tax refund if your total income is below the taxable threshold.
5. A Tax Residency Certificate (TRC) can help avail tax benefits under DTAA (Double Taxation Avoidance Agreement).
So, can you transfer money from an NRO account? Yes, but the process involves tax compliance, repatriation limits, and necessary documentation. Whether you are moving funds from NRO to NRE or sending money abroad, following the proper steps ensures a smooth transfer.
To avoid delays, ensure all required forms are correctly filled, and consult a financial expert for guidance. Understanding RBI and FEMA rules will help NRIs manage their Indian income effectively and transfer funds legally.
FAQs About Transfer Money From NRO Account
Yes, you can transfer money from NRO account to an NRE account, but it is subject to an annual repatriation limit of USD 1 million and requires Form 15CA & 15CB for tax compliance.
As per RBI guidelines, NRIs can transfer up to USD 1 million per financial year from an NRO account, provided they comply with tax regulations and submit necessary documentation.
You need Form 15CA, Form 15CB (certified by a Chartered Accountant), a PAN card, bank statements, proof of funds (e.g., rental income, dividends), and KYC documents like passport and visa.
Yes, any income in an NRO account, such as interest or rental income, is taxable. Before transferring, you must clear any applicable taxes, and TDS at 30% may be deducted.
To transfer funds abroad, you must pay applicable taxes, obtain Form 15CA & 15CB, submit a transfer request to your bank, undergo bank verification, and then initiate the transfer.
Most Indian banks, including SBI, HDFC, ICICI, Axis Bank, and Kotak Mahindra, allow NRO account transfers to NRE or foreign accounts. Each bank may have specific procedures and charges.
Form 15CA is a declaration of remittance submitted to the Income Tax Department, while Form 15CB is a CA-certified document confirming tax compliance before fund transfer.
Yes, banks may levy processing fees, forex conversion charges, and service fees. The exchange rate at the time of transfer also impacts the final amount received.
Yes, if your total income is below the taxable limit, you can file an income tax return and claim a refund for excess TDS deducted on NRO account transactions.
The transfer process from NRO account typically takes 2-7 business days, depending on bank verification, documentation approval, and compliance with RBI and FEMA regulations.
To learn more about bank accounts for students, the best education loans, forex, banking experience for global students, or international money transfers, reach out to our experts at 1800572126 to help ease your experience with studying abroad.
Follow Us on Social Media
