Non Resident External (NRE) Account is normally being used to keep foreign earnings in Indian Bank Accounts by a person who has status of NRI / PIO / OCI. NRE account should only be used to keep money earned from foreign contry and it should not be used to convert your money earned in India either direct or transfer from your existing bank account such as savings bank account or term deposits or current accounts etc. Non Resident Ordinary (NRO) account is being used to keep the money an NRI / PIO / OCI to manage the income earned in India. NRO account also can be used to keep your earning made from foreign country but remember that it can not be repatriating to its original state, ie., converting into foreign currency.
Who is NRI
Non-Resident Indian (NRI) is a person resident outside India who is a citizen of India with any one of the criteria applicable to:
- For taking up employment outside India.
- For carrying on outside India a business or vocation outside India.
- For any purpose, in such circumstances as would indicate his intention to stay outside India for an uncertain period.
For income tax purpose, a non-resident is a person who has been living out of India for more than 182 days in the preceding financial year.