![]() ![]() However, the interest accrued on a NRE account is wholly exempted from income tax, as well as wealth tax that would otherwise be charged on the credit balances of the account. However, an NRO account permits both foreign currency and rupee deposits, but withdrawals are only in rupees.Taxes on interest earnedInterest earned on a NRO account, as well as on the credit balances of this account, is taxed based on the account holder’s tax bracket. ![]() NRE accounts allow only foreign currency deposits, and not rupees, although rupee withdrawals are permissible from this account.The NRO will hold funds that are not eligible to be sent abroad. A NRO account however, can also be jointly opened for rupee transactions without approval, but a joint account can be opened by a NRI with a resident.Which funds can be held and withdrawn from either account?Overseas remittances or local funds belonging to a NRI that would be sent to him can instead be credited to his NRE, or funds could be transferred from another NRE account maintained in India. ![]()
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