Glossary

NRO Account

A Non-Resident Ordinary (NRO) account is a savings or current bank account maintained in India by a Non-Resident Indian (NRI) to manage income earned within the country. It allows individuals to deposit rupee-denominated earnings, such as rental income, dividends, or pension payments, while facilitating the payment of local financial obligations and taxes.

For non-resident property owners, the NRO account serves as the primary financial vehicle for managing domestic assets. It is essential for those who derive income from Indian real estate, as local rental proceeds must be deposited into an NRO account rather than a standard resident savings account. This regulatory requirement ensures that all income generated within India is properly accounted for, taxed at the applicable slab rates, and maintained in a compliant manner for potential repatriation under specific FEMA guidelines.

In practice, account holders must ensure that all local expenses, including property maintenance fees, utility bills, and municipal taxes, are debited directly from this account. While the principal amount is generally non-repatriable, the interest earned and net rental income—after the deduction of applicable withholding taxes—can be repatriated abroad annually, subject to documentation requirements like Form 15CA and 15CB. Account holders should regularly monitor tax certificates to ensure that all income streams are correctly reported to the Income Tax Department.

Last updated: 2026-09-17