An NRO account is a bank account for people who live outside India but are Indian citizens or have Indian ancestry
NRO stands for Non-Resident Ordinary. It is a savings or current account opened in India by someone who is classified as a non-resident for tax purposes. The account holds rupees — Indian currency — and lets you receive money from India, pay bills there, and manage property or family expenses without converting to foreign currency every time.
The key difference from a regular resident account is that the money in an NRO account is treated as income earned in India, which means it is taxable in India even though you live abroad. Interest earned on the account balance is also taxable. You cannot use an NRO account to move large amounts of money out of India — the account is designed to manage rupee income and expenses within India, not to transfer wealth overseas.
Most Indian banks offer NRO accounts. You can open one while you are still in India before you move abroad, or you can open one remotely after you leave, though the process is slower and requires more documentation when done from outside India.
Key Takeaways
- An NRO account holds Indian rupees and is for non-residents who need to manage money in India, such as rental income from property or family support.
- Money in an NRO account is taxed as Indian income, and you must file Indian tax returns on the interest and any other earnings from the account.
- You cannot freely transfer large sums from an NRO account to a bank account outside India — the account is meant for rupee transactions within India.
- Opening an NRO account is faster and simpler if you do it before you leave India, but most banks allow remote opening with additional paperwork and verification.
Who needs an NRO account
You need an NRO account if you receive regular income in India — such as rent from a property you own, a pension from an Indian employer, or money from a family business — and you live abroad. Without an NRO account, that income has nowhere to land in India, and you would have to ask someone else to collect it on your behalf.
An NRO account is also useful if you have ongoing expenses in India: school fees for children, medical bills, maintenance of a house, or support for family members. You can transfer money from your NRO account to pay these bills directly, rather than sending foreign currency and waiting for conversion.
If you are a non-resident but have no income in India and no regular expenses there, you do not need an NRO account. A regular resident account (opened before you moved) or an NRE account (which holds foreign currency converted to rupees) may serve you better, depending on your situation.
How an NRO account differs from an NRE account
The main difference is the source of the money and how it is taxed. An NRO account receives rupees earned in India — rental income, pensions, business profits. An NRE account receives foreign currency that you earned abroad and converted to rupees. Interest on NRE account balances is not taxed in India; interest on NRO accounts is.
Money in an NRE account can be transferred out of India more freely — you can move it back to your foreign bank account without restriction. Money in an NRO account cannot be freely exported; large transfers out of India require special permission from India's Reserve Bank and are rarely granted. NRO accounts are designed to stay in India.
If you earn money abroad and want to send it to India, an NRE account is the standard choice. If you earn money in India and live abroad, an NRO account is what you need. Some non-residents hold both.
Opening an NRO account before you move abroad
If you are still in India and know you will move abroad, opening an NRO account before you leave is the simplest path. You walk into any branch of your bank with your passport, proof of address, and a completed account opening form. The bank converts your account to NRO status once you provide proof that you have moved — usually a visa, work permit, or a letter from your employer abroad.
Some banks allow you to convert an existing resident account to NRO status without closing it and reopening. This is faster than starting from scratch. Ask your bank whether conversion is an option before you leave.
The entire process takes a few days to a week if you do it in person. Once the account is NRO, you can manage it from abroad using online banking, and money can be deposited into it from India or from your foreign accounts.
Opening an NRO account from abroad
If you have already moved and did not open an NRO account before leaving, you can still open one remotely. The process is slower and requires more proof. Most banks ask for a copy of your passport, a visa or work permit showing your non-resident status, proof of your foreign address, and a self-declaration that you are a non-resident.
Some banks require you to have a resident in India — a family member or trusted contact — who can visit a branch on your behalf to complete the paperwork. Others allow you to upload documents online and complete the process entirely remotely, though this can take several weeks for verification.
A few banks have dedicated non-resident banking teams that handle these accounts. Asking your current bank whether they have a non-resident service desk can save time. If your bank does not offer remote opening, you may need to visit India in person or ask a family member to open the account on your behalf and then transfer it to your name once you provide the required documents.
Tax obligations on an NRO account
Money in an NRO account is treated as Indian-source income. If you are classified as a non-resident for Indian tax purposes, you must file an Indian tax return each year and report all interest earned on the account balance. The interest is taxed at your applicable rate, which depends on your total income and tax bracket.
Rental income from property, pension payments, or business income deposited into the NRO account must also be reported on your Indian tax return. Even though you live abroad, India taxes this income because it was earned in India.
You are responsible for understanding India's tax rules and filing returns on time. Many non-residents hire an Indian tax consultant or chartered accountant to handle this, especially if they have multiple sources of income or property. The cost is usually modest and worth it to avoid penalties for late filing or incorrect reporting.
Limits and restrictions on NRO accounts
You cannot freely move money out of an NRO account to a bank outside India. Large transfers require approval from the Reserve Bank of India and are granted only in specific circumstances — such as paying for medical treatment abroad or education fees. Routine transfers out are not permitted.
There is no fixed limit on how much money can sit in an NRO account, but banks may ask questions if very large sums arrive suddenly. Deposits from your foreign salary or savings are allowed, but the bank will want to know the source.
You can withdraw cash from the account in India, pay bills, and transfer money to other Indian accounts without restriction. The account is designed for rupee transactions within India, not for moving wealth overseas.
Frequently Asked Questions
Can I open an NRO account if I am not an Indian citizen?
Most banks require Indian citizenship or Overseas Citizen of India (OCI) status to open an NRO account. If you are a foreign national married to an Indian citizen or have Indian ancestry, ask your bank — some make exceptions, but it is not standard. An NRE account may be available to you instead.
What happens to my NRO account if I move back to India?
Once you return to India and regain resident status for tax purposes, your bank can convert the NRO account back to a regular resident account. You will need to provide proof of your return — such as a cancelled visa or a residence certificate from local authorities. The conversion is usually free and takes a few days.
Can I have both an NRO and an NRE account at the same time?
Yes. Many non-residents hold both accounts — an NRE account for foreign earnings and an NRO account for Indian-source income. The accounts are separate, and money cannot be transferred between them. You manage them independently.
Do I need to visit India in person to open an NRO account?
Not always. Many banks now allow remote opening with document uploads and video verification. The process takes longer than in-person opening and varies by bank. Contact your bank's non-resident banking team to ask whether remote opening is available and what documents you need to provide.
Is interest on an NRO account taxed differently than interest on a resident account?
The tax rate is the same, but the treatment differs. Interest on an NRO account is always taxable in India, even if you live abroad. Interest on a resident account held by a resident is also taxable in India. The difference is that NRO interest is taxed as Indian-source income regardless of where you live.