Module: | NRO Accounts, Tax Rules & Limits
Q10: Rohit requires emergency funds while in India, and approaches his bank for a loan, against his NRO Fixed Deposit. The bank agrees to sanction the loan. Which of the following conditions, apply to this loan?
1. The loan proceeds can be utilized, for personal purposes in India.
2. The loan proceeds can be credited to his NRE account, for repatriation abroad.
3. Repayment of the loan can be made, using funds from his NRE account.
4. The loan cannot be used for re-lending, or carrying on agricultural/plantation activities.
2. The loan proceeds can be credited to his NRE account, for repatriation abroad.
3. Repayment of the loan can be made, using funds from his NRE account.
4. The loan cannot be used for re-lending, or carrying on agricultural/plantation activities.
✅ Correct Answer: B
Loans against NRO deposits are for local use and cannot be repatriated/credited to NRE.
Repayment can be from NRE/NRO.
Re-lending and agricultural use are prohibited.
Repayment can be from NRE/NRO.
Re-lending and agricultural use are prohibited.