Module: | NRI Banking Basics & NRE Accounts
Q1: Siddharth moves to the UK for employment, and opens a Non-Resident External (NRE) account in India, to manage his finances. He seeks clarification on the account's features. Which of the following statements, regarding his NRE account, are correct?
1. The funds he remits from the UK to this account are fully repatriable, back to the UK.
2. The interest earned on his NRE savings is exempt from Income Tax, in India.
3. He can freely transfer funds, from his existing FCNR(B) account, into this NRE account.
4. He can deposit his rental income, earned from a property in Mumbai, into this account.
2. The interest earned on his NRE savings is exempt from Income Tax, in India.
3. He can freely transfer funds, from his existing FCNR(B) account, into this NRE account.
4. He can deposit his rental income, earned from a property in Mumbai, into this account.
✅ Correct Answer: A
NRE accounts allow full repatriation.
Interest is tax-free in India.
Permissible credits include inward remittances and transfers from NRE/FCNR(B). Local income like rent must go to an NRO account.
Interest is tax-free in India.
Permissible credits include inward remittances and transfers from NRE/FCNR(B). Local income like rent must go to an NRO account.