Neutral impactCorporate Action
Moving funds from NRO to NRE? Crucial tax rules and transfer limits you need to know
Mint 2 hrs ago·16 Sept 2026, 2:18 pm
Non-Resident Ordinary (NRO) accounts are used by Indians living abroad to manage income earned within India, such as rent or dividends. Non-Resident External (NRE) accounts, conversely, are designed to hold foreign earnings. While you can move funds from an NRO to an NRE, this process is strictly regulated. The tax department views this transfer as a taxable event, as the money was previously subject to tax in India. Therefore, you must pay the applicable tax on the amount being moved before the transfer is processed.
The transfer limit is a key factor to consider. You can only move a total of $1 million per financial year. This cap applies to the total amount moved from NRO to NRE, not just the balance in your account. Additionally, the transfer must be made in foreign currency. Investors should consult a tax advisor to understand their specific tax liability and ensure they comply with these regulations to avoid penalties.
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- Category: Corporate Action.
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