NRE vs NRO: the tax difference
| NRE account | NRO account | |
|---|---|---|
| Holds | Money earned abroad | Indian income — rent, dividends, sale proceeds |
| Interest | Tax-free in India | Taxable; TDS at 30% plus surcharge and cess unless a treaty rate applies |
| Repatriation | Freely repatriable | Up to USD 1 million per financial year |
The USD 1 million limit
Under RBI’s rules on remittance of assets, an NRI can remit up to USD 1 million per financial year (April–March) from NRO balances, sale proceeds of assets and inherited assets. Above that needs RBI approval. The bank will ask for an undertaking and, typically, a CA certificate.
Forms 145 and 146 (formerly 15CA and 15CB)
Under the Income-tax Rules, 2026, the remitter files Form 145 online before the remittance. It has four parts:
- Part A — taxable remittances up to ₹5 lakh in the year.
- Part B — over ₹5 lakh, where a tax officer’s certificate has been obtained.
- Part C — over ₹5 lakh, with a chartered accountant’s certificate in Form 146.
- Part D — remittances not chargeable to tax.
The CA certificate confirms the nature of the funds and that tax has been paid or deducted — which is why it’s easiest when your return is filed and the property-sale TDS reconciled. See TDS on property sale.
Treaty relief on NRO interest
- India’s tax treaties often cap tax on interest below 30% — for example 12.5% for most interest under the India–UAE treaty.
- To claim it, give the bank your tax residency certificate and Form 41 (formerly 10F), filed online.
Step by step
- Settle the tax — file the return or confirm TDS was deducted.
- Get the CA certificate in Form 146 (if the amount needs it).
- File Form 145 online.
- Submit Form 145, the certificate and the undertaking to your bank with the remittance request.
- Keep copies for your tax return and for your country of residence.
Need a Form 146? See NRI tax services.
Rates and slabs: income tax for NRIs in India — slabs, TDS and DTAA.
Frequently asked questions
How much can an NRI repatriate from an NRO account?
What replaced Form 15CA and 15CB?
Is interest on an NRE account taxable?
What documents are needed to claim a lower treaty rate on NRO interest?
Please note: this guide is general information based on the rules as they stood on the review date above. Regulations and RBI/CBDT procedures change often — please get advice on your specific facts before acting.