NRIs, PIOs and OCIs are exempted from Aaadhaar Card.
It is compulsory in India to link all saving bank accounts with Aadhaar Card. If you still have normal saving accounts in India, it is a compulsion for NRIs too to link it with Aadhaar card by 31/03/2018. To avoid freezing accounts NRIs, PIOs and OCIs need to convert Resident Saving Bank Account to NRO & NRE accounts before 31st March 2018.
NRO and NRE accounts are also exempted from linking with Aadhaar card
When a person becomes a Non-Resident Indian (NRI), he is required to either close his existing saving bank account or convert it to NRO account or a Non-Resident (Ordinary).
As per FEMA regulation, when a resident’s status changes to NRI the resident savings account have to be converted to an NRO account. In simple words, it’s illegal to maintain a saving bank account for NRIs. Most of the people make a mistake of maintaining a resident saving bank account even after becoming an NRI. However, the law does not allow it.
It is not probable to convert a resident savings account to NRE account as the fund source for NRE account has to be remitted from abroad.
NRO accounts can be initiated with funds either through remitted from abroad or generated in India.
Features of NRO account
- These are exactly like a savings accounts, with several restrictions on repatriation of proceeds to the foreign country.
- All income which is receivable in India such as rentals from the property, pension, investments etc. has to be deposited in these accounts, and any payment towards EMIs on loans or insurance premiums which you availed while in India also has to be mandated from NRO account.
- The interest will be similar to the interest on a regular savings bank account. Interest earned on NRO accounts is completely repatriable after the deduction of taxes, as applicable.
Here’s how to convert present savings account to an NRO account:
Banks prescribe precise forms for the conversion of existing saving bank accounts to NRO accounts. Forms can be download from the bank website or obtained from the bank. All holders are needed to sign the form.
A single form can be used to convert all saving bank accounts held with the bank against the same customer ID.
Additionally, to the above form for conversion of account type, you will also require providing:
- Address proof of the abroad address
- Copy of the applicant’s passport
- Copy of valid visa or work permit
- OCI/PIO card (if applicable)
- Some banks would also need two passport size photographs
The account holder or applicant must provide proof of overseas resident in the form of employment details, student status, dependent visa status, or a copy of the resident permit in the country he is currently living. This proof has to be attested by the Indian embassy, notary, or an Indian bank with an overseas branch, but this is optional, many banks accept the self-attested copy of documents.
If you also want to include your local Indian address for ease of operation in addition to an overseas address, you need to submit another local address proof with attestations.
After the form and documents have been obtained and verified by the bank, the saving bank account is re-designated as an NRO account.
Subsequently, re-designation of inhabitant saving bank account to NRO savings account, and the account number will continue the same and money from a resident savings account will automatically be transferred to the NRO saving bank account.
But, if only NRE account is to be opened, the resident account will be closed, and a new NRE account will be opened. NRO and NRE accounts can also be opened together.
If there is fixed deposit associated with the old account, Fixed deposit receipts need to be submitted along with the form. A new Deposit Confirmation Advice (DCA) would be issued to be with applicable terms and conditions.