NRE vs NRO account: which account should an NRI use?

NRE and NRO accounts are both Indian rupee accounts, but they are designed for different money flows. NRE is commonly used for eligible overseas earnings remitted to India, while NRO is commonly used for India-sourced income such as rent, pension, dividends and sale proceeds.

Compare the source of funds, Indian tax treatment, repatriation rules and permitted joint holding before choosing an account. When a resident Indian becomes resident outside India under FEMA, an existing resident account generally needs to be redesignated as NRO.

Quick answer

Start with where the money was earned. Use NRE mainly for eligible foreign earnings and NRO mainly for India-sourced income. Confirm the transaction and account designation with your authorised dealer bank.