What is the distinction between NRE account and NRO account?
A- Balances held in NRE accounts can be repatriated abroad freely, whereas funds in NRO account are not generally reptriable. Repartiation of balances held in NRO accounts is allowed subject to certain conditions. Funds remitted from abroad or local funds which can otherwise be remitted abroad to the account holder can be credited to NRE accounts. Funds due to the non- resident account holder which do not qualify, under the Exchange Control regulations, for remittance outside India are required to be credited to NRO accounts. The interest income earned on NRO accounts attract income tax deduction at source.
