An NRO account holds money earned outside India by a non-resident Indian

An NRO account (Non-Resident Ordinary account) is a savings or current account opened by someone who is not a resident of India but earns money outside the country. The account lets you deposit foreign income—salary, rental payments, pension, investment returns—into an Indian bank while keeping that money in Indian rupees.

The key difference from other accounts: money in an NRO account is treated as foreign income under Indian tax law. You pay tax on it in India, and the Reserve Bank of India (RBI) places restrictions on how much you can move out of the country each year. If you are a non-resident and want to keep money in India without those restrictions, you would open an NRE account (Non-Resident External) instead, which is taxed differently and has no limit on outward remittance.

Key Takeaways

  • An NRO account is for non-residents earning money outside India and depositing it into an Indian bank in rupees.
  • Money in an NRO account is taxable in India and subject to RBI limits on how much you can send out of the country each financial year.
  • You can open an NRO account remotely through most Indian banks, though some require in-person verification or a video call.
  • An NRO account is useful if you have ongoing income abroad but want to keep rupee balances in India for expenses or family support.
  • NRO and NRE accounts serve different purposes: NRO is for foreign income you want to keep in India; NRE is for foreign income with no outward remittance limit.

Who can open an NRO account

You can open an NRO account if you are classified as a non-resident for tax purposes under Indian law. This typically means you have not been physically present in India for 182 days or more in the financial year, or you do not have a permanent home in India. The RBI and the Income Tax Department define residency status, and your bank will ask you to declare your status when you apply.

You do not need to be an Indian citizen to open an NRO account—foreign nationals who earn money abroad and want to hold rupees in India can open one too. However, you must have a valid passport or travel document and proof of your foreign address. Some banks also require a reference from an existing customer or a video verification call if you are opening the account remotely.

What you can deposit and withdraw

You can deposit any money earned outside India into an NRO account: salary, freelance income, rental payments from foreign property, pension, investment returns, or money sent by family members living abroad. You convert the foreign currency to rupees at the bank's exchange rate and deposit it.

Withdrawals and transfers out of India are limited. The RBI allows you to remit up to $1 million per financial year (April to March) out of India from an NRO account, but this limit applies to the total of all your NRO accounts combined across all banks. Money you keep in the account and spend within India—paying bills, buying goods, supporting family—has no limit. Interest earned on the account balance is also taxable in India.

Tax treatment and reporting requirements

Income deposited into an NRO account is treated as foreign income and is taxable in India. You must report the account and all transactions on your Indian income tax return if your total income exceeds the filing threshold. The bank will issue a Form 26AS (tax credit statement) showing interest earned, and you will receive a TDS (tax deducted at source) certificate if tax was withheld on the interest.

The RBI also requires you to file a Foreign Assets Declaration if your NRO account balance exceeds certain thresholds. Check with your bank or a tax professional about the current limits, as they change. Failure to report the account or income can result in penalties and interest charges from the Income Tax Department.

Opening an NRO account: documents and steps

Most Indian banks allow you to open an NRO account online or by mail if you are a non-resident. You will need a valid passport, proof of your foreign address (utility bill, lease, or bank statement), proof of income (salary letter, tax return, or pension statement), and a declaration of your residency status. Some banks ask for a reference from an existing customer or a video call with a bank officer.

The process usually takes 5 to 10 business days after the bank receives all documents. Once approved, the bank will send you account details, a debit card (if you request one), and online banking credentials. You can then deposit money by wire transfer from your foreign bank account or through a money remitter. Keep copies of all documents you submit and the bank's approval letter for your records.

NRO vs. NRE: which account to choose

An NRO account and an NRE account serve different purposes. An NRO account is for foreign income you want to keep in India and use there; an NRE account is for foreign income with no restrictions on moving money out of India. NRE account interest is not taxed in India, while NRO account interest is taxed. If you earn abroad and plan to send money back out of India regularly, an NRE account is usually better. If you earn abroad but want to keep rupees in India for living expenses or to support family, an NRO account works well.

You can hold both accounts at the same bank. Some non-residents open an NRE account for savings and an NRO account for regular income deposits, then transfer money between them as needed. Ask your bank which combination makes sense for your situation.

Frequently Asked Questions

Can I open an NRO account if I am a citizen of another country?

Yes. You do not need to be an Indian citizen. You need a valid passport, proof of foreign residence, and proof of income earned outside India. The bank will verify your non-resident status and open the account under the same rules as Indian non-residents.

What happens to my NRO account if I move back to India and become a resident?

Once you become a resident for tax purposes, your NRO account remains open but the rules change. You can no longer deposit foreign income into it, and money already in the account becomes subject to different tax treatment. Contact your bank to discuss converting it to a regular resident account or closing it.

Can I use an NRO account to send money to family in India?

Yes. You can deposit foreign income into your NRO account and then transfer rupees to family members in India using the bank's domestic transfer service. There is no limit on transfers within India. However, if you want to send money out of India, you are limited to $1 million per financial year across all your NRO accounts.

Do I pay tax twice on NRO account income—once abroad and once in India?

You may, unless your home country has a tax treaty with India. Most countries do have treaties that prevent double taxation. You typically pay tax in the country where you earned the income, then claim a foreign tax credit in India for taxes paid abroad. Consult a tax professional in both countries to understand your specific situation.

Can I use an NRO debit card to withdraw cash outside India?

Yes, but the withdrawal counts toward your annual $1 million remittance limit. Each ATM withdrawal or foreign purchase using an NRO debit card is recorded as money leaving India. Keep track of these withdrawals so you do not exceed the limit.