What Is an NRO Account?
An NRO Account is an Indian rupee bank account for non-residents under Indian exchange-control rules, holding income arising in India such as rent or dividends.
Also known as: Non-Resident Ordinary Account, NRO Savings Account.
How NRO Account works
An NRO (Non-Resident Ordinary) Account is a rupee account maintained in India by a person resident outside India to receive and manage income earned in India, with transfers abroad controlled under Indian foreign exchange regulations administered by the Reserve Bank of India (RBI). Current income such as rent, dividends, pension or interest may be remitted abroad from the account. According to the RBI, other remittances from NRO balances are capped at USD one million per financial year for bona fide purposes, subject to payment of applicable taxes in India. Income credited to the account generally remains taxable in India as Indian-source income, with treaty relief and residence-country taxation subject to local rules.
NRO Account vs NRE Account
Unlike an NRE Account, which is designed for funds earned outside India and is generally freely repatriable, an NRO Account holds income arising in India, and repatriation of capital balances is subject to RBI limits and tax clearance.
Example
Illustrative example: An Indian citizen working remotely from Country B keeps renting out a flat in India. Rent is paid into an NRO Account; Indian tax applies to the rental income, and the account holder may also report the rent in Country B, claiming relief for Indian tax under Country B's rules.
Common misconception
Myth: Money in an NRO account can be moved abroad freely like any foreign bank balance.
Reality: NRO Account balances beyond current income are subject to an RBI annual remittance cap and applicable Indian tax, so transfers abroad require documentation under Indian exchange-control rules.
Frequently asked questions
How much money can be repatriated from an NRO account?
An NRO Account holder may, according to the RBI, remit up to USD one million per financial year for bona fide purposes, subject to applicable Indian taxes; current income such as rent or dividends follows separate rules.
What is the difference between NRE and NRO accounts?
An NRE Account generally holds foreign earnings and is repatriable, while an NRO Account holds income arising in India, with interest and income typically taxable in India and repatriation subject to RBI limits.
Related terms
- Exchange Control — Regulatory framework limiting NRO repatriation
- Tax Residency — Residence status determining eligibility to open and operate an NRO account
- Non-Resident Withholding Tax — Tax deducted on Indian income of non-residents
- Foreign Tax Credit (FTC) — Relief in residence country for Indian tax
Related guides
- Tax treaties and international taxation — Treaty relief for Indian-source income
Sources
Last verified: 2026-10-09. This entry is general information, not tax or legal advice; rules vary by country and change over time.
