There are two main types of accounts in India. NRE and NRO both are maintained in INR.
|Purpose||For sending monies to India from another country||For funds generated in India like rental income|
|Repatriation||Fully repatriable i.e. all funds in this account can be sent out of India without any restrictions.||Repatriation limit of USD one million per financial year. Plus, paperwork needs to be completed before sending funds out of India.1|
- 1. Paperwork required:
- Form A2 – Funds transfer form
- Form 15CB – Chartered Accountant certificate
- Form 15 CA – Self declaration
A useful blog I found on this subject.
Recently a client wished to invest funds in the Indian stock market and he contacted his old bank where he had a dormant account, after lot of paperwork and telephone calls finally the bank was able to activated NRO accounts and client started sending funds to India in his NRO account.
We realised that this is not the optimum solution for the client as he is sending his overseas earnings to India and will face restrictions in the future if funds are sent via NRO account, see above for restrictions.
We have requested the banker to change the arrangement to NRE account, let see how things turn up.
NRE PIS account opened after months of to and fro.
Client wanted to transfer shares held in NRO account to NRE account but due to lack of clear rules, this project was abandoned.