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  • Steps to Convert Resident Savings Account to NRO Savings Account

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    With more citizens moving abroad for job purposes or other such reasons, some choose to close their savings account in the country rather than convert it. For an Indian resident moving abroad to settle, he/she can convert their resident savings account into a NRO (Non-resident Ordinary) account. By making the conversion, the non-resident can make deposits of their earnings in the NRO account from savings, investments, rent, etc., in the form of Indian currency. Those shifting abroad can follow the steps mentioned below to convert their resident savings account to a NRO savings account.

    Benefits of a NRO Savings Account

    Before getting into how to convert one’s Resident Savings account to a NRO savings account, it is important to first know the benefits of a NRO savings account:

    • All money earned in India from investments, rent, dividends, etc. can be parked in the NRO savings account in Indian currency.
    • Transfer money abroad at competitive exchange rates.
    • Make a nomination. The nominee assigned can operate the account on behalf of the primary account holder.
    • The NRO account comes with the Double Taxation Avoidance Agreement (DTAA).
    • Funds deposited in the account are fully repatriable.
    • Interest rates as set by the bank holding the account.
    • Access to 24/7 internet banking facilities.

    Steps to Convert Resident Savings Account to NRO Savings Account

    To carry out the conversion from a resident savings account to a NRO savings account, customers will have to follow the steps mentioned below.

    • Inform the bank holding your resident savings account that you have shifted abroad and wish to convert your account into a NRO savings account.
    • You will now have to fill in the conversion of resident savings account to NRO account form. The form will contain all your KYC details and details of your new address (overseas), point of contact, etc. The form can be obtained either at any bank branch or on the website of the bank holding your account.
    • Attest the form once you have filled it.
    • At the bank, submit the required documents - visa permit, OCI/PIO card, passport copy, etc.
    • If in case the savings account was a zero-balance savings account, the account holder will have to convert it to a savings account with a minimum average balance.
    • The customer has to submit all the documents and form listed above to the bank branch holding the account. If in case the account holder is outside the country, the forms and documents will have to first be attested by the Indian embassy and then submitted to the bank branch.
    • Once the bank receives the form and documents, it will verify the documents. Following the approval for the conversion of the savings account, the bank will rename the account as a NRO saving account though the account number in most cases will remain the same.

    Documents Required to Convert Resident Savings Account to NRO Savings Account

    Listed below are the documents that are required to be submitted when submitting the form for the conversion of Resident Savings account to NRO savings account:

    • Identity proof - Passport, Aadhaar card, Voter ID, Driver’s license, etc.
    • Proof of NRI status - Valid visa, work permit, OCI/PIO card, etc.
    • Foreign address proof - Utility bills, telephone address, etc.
    • Recent passport size photographs.

    Points to Note when Converting Resident Savings Account to NRO Savings Account

    Customers making the savings account conversion will have to remember the below listed points.

    • When making the conversion from a Resident Savings account to NRO savings account, the bank will levy some charges.
    • The interest earned in the NRO account is fully repatriable after deduction of taxes.
    • The NRI customer will have to provide proof of foreign address for documentation processing and drop-off forms.
    • All money earned in India can be deposited in the NRO account in Indian currency.

    FAQs

    1. What is an NRO account?

    An NRO (Non-resident Ordinary) is a savings account that can be opened by Non-resident Indians. All that the NRI needs to do is to convert his/her regular savings account held in the country to a NRO account. Once this is done, the NRI can deposit all his/her earnings made in India into the NRO account in Indian currency.

    2. Can you tell me if the funds from a NRO account can be repatriated?

    Customers holding a NRO account cannot repatriate the principal amount in the account. That said, the interest earned over the principal amount can be fully repatriated. Note, customers can repatriate funds up to $1 million in a year.

    3. Can I convert my zero-balance savings account into a NRO account?

    If you have a zero-balance savings account, you will have to convert it to normal savings account with an average monthly balance requirement. Once that is done, you can then convert the resident savings account to a NRO account.

    4. To open a NRO account, can I use american dollars for the initial deposit amount?

    You can open a NRO account in Indian currency and any foreign currency that can be converted. If you make the initial deposit in dollars or any other foreign currency, then the foreign currency will be converted into Indian currency - based on the exchange rate of the day - for the initial deposit amount. That said, all deposits in the account will be maintained in the form of India currency.

    5. Can you explain to me what DTAA (Double Taxation Avoidance Agreement) is?

    DTAA (Double Taxation Avoidance Agreement) is an income tax agreement made between India and other countries to ensure that citizens do not have to go through stringent tax measures over their earnings in both countries. The DTAA (Double Taxation Avoidance Agreement) facility can be availed when the customer opts to convert his/her resident savings account to a NRO savings account. To avail this facility, the customer holding the account will have to submit a self-attested PAN card copy, tax residency certificate, and Form 10F along with the conversion form for the residence savings account to be changed to a NRO savings account.

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