Transfering money from NRE account in India to family member
I am a US citizen and I want to transfer some amount 10 lakhs+ to my brother from my NRE account in India to his account. My brother is going to purchase something for his business. He is going to return my amount after 3-4 Months From the description it looks like you would like to loan to your brother on repatriation basis. Yes this is allowed. See the RBI Guide here and here for more details. There are some conditions; (iv) Scheme for raising loans from NRIs on repatriation basis   Borrowings not exceeding US$ 2,50,000 or its equivalent in foreign exchange by an individual resident in India from his close relatives resident outside India, subject to the conditions that - a) the loan is free of interest;   b) the minimum maturity period of   the loan is seven years;   c) The amount of loan is received by inward   remittance in free foreign exchange through normal banking channels or   by debit to the NRE/FCNR account of the non-resident lender;    d) The   loan is utilised for the borrower's personal purposes or for carrying   on his normal business activity but not for carrying on   agricultural/plantation activities, purchase of immovable property or   shares/debentures/bonds issued by companies in India or for   re-lending. Although it is mentioned as Seven years, this is revised to one year. Since he cannot deposit into my NRE account I guess he has to deposit it into my NRO account. A repatriate-able loan as above can be deposited into NRE Account. Is there any illegality here doing such transaction? No. Please ensure proper paper work to show this as loan and document the money trail. Also once I get my money in NRO account do I need to pay taxes in India on the money he deposited? This question does not arise.
Yes NRIs are allowed to open a DEMAT account in India from abroad.  Investments can be made under the Portfolio Investment NRI Scheme (PINS) either on repatriation or non-repatriation basis.  As per,the guidelines of the Reserve Bank of India it is  mandatory for NRIs to open a trading account with a designated institution authorized by the RBI.  They must avail either a Non-Resident Ordinary (NRO) or Non-Resident External (NRE) account to route the various investments. Taxability does not depending on transfer of money to NRO. It depending on your tax status in India. Assuming you have spent more than 182 days outside India for the financial year 1 April 2015 to 31 March 2016, you would be NRI. I am transferring money from my Maldives saving account to my Indian Saving account(NRO). Will it be taxable in India? Assuming you are NRI, this is not taxable. Any interest in NRO account is taxable in India. Again I am transferring the money from my Indian savings account to my dad's Indian saving account. Will it be taxable? This is not taxable to you. To your father it would be treated as Gift. As per Gift tax, this is not taxable to your father as well. If the amount is large, keep proper documentation of the transaction. Any income that is generated i.e. interest etc on this amount will be taxable to your father. I have not opened any NRE/NRO account before coming to Finland.  This is in violation of Foreign Exchange Management Act. Please get this regularized ASAP. All your savings account need to be converted to NRO. Shall I transfer funds from abroad to both NRE and NRO account or I can transfer only to NRE account in India? You can transfer to NRE or NRO. It is advisable to transfer into NRE as funds from here can be repatriated out of India without any paperwork. Funds from NRO account need paperwork to move out of India. I am a regular tax payer in abroad. The Funds which i'll transfer in future will attract any additional tax in India? As your status is Non Resident and the income is during that period, there is no tax applicable in India on this. Few Mutual Fund SIPs (monthly basis) are linked with my existing saving account in india. Do these SIPs will stop when the savings account will turn into NRO account? Shall I need to submit any documents for KYC compliance? If yes, to whom I should submit these? is there any possibility to submit it Online? Check your Bank / Mutual Fund company. Couple of FDs are also opened online and linked with this existing saving account. Do the maturity amount(s) subject to TDS or any tax implication such as 30.9% as this account will be turned into NRO account till that time and NRO account attracts this higher tax percentage. These are subject to taxes in India. This will be as per standard tax brackets. Which account (NRE/NRO) is better for paying EMIs for Home Loan, SIPs of Mutual Funds, utility bills in India, transfer money to relative's account etc Home Loan would be better from NRE account as if you sell the house, the EMI paid can be credited into NRE account and you can transfer this out of India without much paperwork. Same for SIP's. For other it doesn't really matter as it is an expense. Is there any charge to transfer fund from NRE to NRO account if both account maintain in same Bank same branch. Generally No. Check with your bank. Which Bank account's (NRE/NRO) debit/ATM card should be used in Abroad in case of emergency. Check with your bank. NRE funds are more easy. NRO there will be limits and reporting. Do my other savings accounts, maintained in different Banks, also need to be converted into NRO account? If yes, how can it be done from Abroad? Yes. ASAP. Quite a few leading banks allow you to do this if you are not present. Check you bank for guidance. As NRI/PIO (Non-Resident Indian/Person of Indian Origin), the overseas income and transfers in foreign currency are exempt from Indian income taxes. However, the account in India has to be designated NRE or FCNR. There are three kind of accounts that an NRI can maintain Interest earned in NRE and FCNR accounts is exempt from income taxes. Interest earned in NRO accounts is not exempt from income taxes, in fact banks would withhold about 30% of interest (TDS). The exact tax liability would depend upon income generated in India and TDS could be applied towards that liability when the tax returns are filed. There are other implications also of designating the account as NRE or NRO. NRE accounts can only be funded via inward remittance of permitted foreign currency e.g. deposit USD/GBP. So proceeds like rental income, pension etc. that are generated in INR within India can't be deposited in this account. The money deposited in NRE account can grow tax free and can be converted back in any foreign currency freely. On the other hand NRO accounts can be funded through both inward remittance of permitted foreign currency or local income e.g. rental, pension etc. All the amount in this account is treated as Indian originated INR (even if remitted in foreign currency) and thus is taxed as any other bank account. The amount in this account is subject to the annual cap of convertibility of USD 1 million. Both NRE and NRO accounts are maintained in INR and can be Saving and Term Deposit. Any remittance made to these accounts in any foreign currency is converted to INR at the time of deposit and is maintained in INR. FCNR account are held in foreign currency and can only be Term Deposit. Official definitions: Accounts for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs) I have read from lot of places that transferring funds from NRO to NRE is possible given correct documents are provided. Yes this is correct. The key document 15CB establishes that you have paid taxes that were due before money is transferred from the NRO account to the NRE account and/or are repatriated. Here is what I am simply doing- Steps 3 & 4 more so the step 4 can be seen as new income. So the source of the funds is originally from NRE account. However, the CA feels that since my withdrawal and deposit mechanism in NRO is cash, I might be subject to questioning.   Is there any issues in doing the above? The CA is right. The Cash Withdrawal and Cash Deposit has broken the link between the money withdrawn and the money deposited. It could easily be the case that the Cash Withdrawals were spent on expenses and the Cash Deposit is new (taxable) income to you. This new income needs to be declared and the taxes paid. If you Uncle is a close relative (the exact relationships that are called close relatives are defined by law), the return of the money can be declared to be a gift from your Uncle to you and no taxes are due from you on the money. If the funds are large, it is advised to have a gift deed. It is not a simple matter of creating a gift deed stating that your Uncle has given you a gift; your Uncle has to show how he acquired so many assets that he gave you some money as a gift and whether appropriate taxes were paid by him.  If your Uncle is not a close relative, he can still gift you up to Rs 50,000 per year without you having to pay any income tax on the money received, but again, a gift deed would be needed to account for the cash deposits. In short, keep speaking to your CA. He will advise you on the best course of action. Related Question Transfering money from NRE account in India to family member I want to transfer around $2000 to another bank account (which is under my name ) in India. As much as I know you cannot instruct to transfer money from your travel card to a Bank Account. You can withdraw cash at ATM or swipe it. On return you can encash the balance. Will this have any tax implications? The money provided to you by the company is meant as an allowance for your expense in US. As per law any money you save and not spend has to be declared as additional income and taxes paid accordingly. Is there any difference if I send it to my parents account? There is no difference if you transfer the funds to your account or to your parents accounts or keep the cash. If you haven't spent the allowance, its additional benefit and taxable. He cannot get money from someone else account. Your US resident friend in New York can send money to your Indian friend in Atlanta via Western Union which has presence in almost every corner of the US. Most definitely in the city of Atlanta. Your Indian friend can receive the Western Union transfer, in cash, within minutes after the friend in New York sends it. Here's the site for location search. The sender doesn't need to go anywhere, can send online, so your New York friend doesn't even need to waste much time. In fact - you don't need to bother your friend in New York, you can send it online yourself (assuming you're American/have US bank account). In order to receive the money, your Indian friend will obviously need a proper identification (i.e.: passport). this is to prevent fraud, and there is likely nothing (through paypal) that you can do to speed up the process apart from making sure you verify all the accounts linked to PayPal (bank, credit, etc) and that your relatives do the same. Be mindful that Paypal is NOT intended as a large sum transfer service - they are a convenience for online payments. Using an established monetary transfer system (wire, etc) for this purpose in the first place would have saved some time at the expense of a convenience fee. Tax implications, etc all apply, etc.