nre account

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

16 May 2011 usually when nri's come to india they dont open ordinary rupee accounts like us.

They open

NRE- Non Resident External (in foreign currency)

NRO- Non Resident Ordinary (in Rs)

they can open an ordinary account like us.

I wanted to know when do they have to close nre and nro accounts??

1)when they become residents? ror or nor?
or when they start filing returns??

CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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16 May 2011 NRE account has to be closed when the NRI decides to settle permanently in India. He need not to wait for becoming a ROR or NOR.

It also does not depend upon the return filing criteria.

Querist : Anonymous

Querist : Anonymous (Querist)

25 May 2011 Thank you sirjee.

Another query is that

1) Assuming they are non residents only.

They want to operate both nre account and ordinary account at the same time. is it allowable.

AS interest rates on fd is much higher in ordinary account compared to nre account.

So for fd they open ordinary account and file returns and for nre they just use for transactions when they come to india for traveling etc??

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CA PARAS BAFNA

CA PARAS BAFNA (Expert)
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25 May 2011 NRO Account can be operated in the manner you have written.

Querist : Anonymous

Querist : Anonymous (Querist)

25 May 2011 thank you for the reply sir.

But not nro account

1 nre account and 1 ordinary rupee account(the accounts we operate).

Is it possible to operate both at same time.

Or all accounts should be nre only ??

or all accounts should be ordinary only??

CA. Anuj Gupta

CA. Anuj Gupta (Expert)
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25 May 2011 As per FEMA ordinary accounts should not be opened and operated by NRI's.

NRI's have the option to open FCNR(B)account (in foreign currency)for better returns .Also even NRO/NRE accounts can be opened as FD's.