What is an Indian Seafarer's Non Resident External Account?

1. A non-resident external (NRE) account is one that is denominated in Indian rupees. Earnings in foreign currencies can be put in NRE accounts, which are held in Indian rupees.

2. Earnings in foreign currencies placed in an NRE account are fully repatriable. The amount of capital and interest generated that can be repatriated is unlimited.

3. Under section 10(4)(ii) of the Income Tax Act, 1961, interest generated on foreign currency profits deposited in an NRE account is exempted.

4. Who can open NRE savings account?

        • Non Resident Indian (NRI)         
        • Person of Indian Origin (PIO)
        • Overseas Citizen of India (OCI)
        • Indian Nationals who are mariners or seafarers
        • Indian Citizen residing outside India for employment, studies or business

5. NRE Account can be of the following types:
        • Savings account
        • Current account
        • Recurring account
        • Fixed Deposit account

6. Permissible Debits (Payment or expenses) from NRE account:
        • Local disbursements
        • Remittances outside India
        • Transfer to NRE/ FCNR (B) account of the account holder or to any person eligible to maintain such               NRE account
        • Investment in shares, mutual funds or any other security of Indian company subject to general/ special            permission granted by RBI
        • Investment in immovable property in India subject to general/ special permission granted by RBI

7. Permissible Credit (Receipts or incomes) in NRE Account?
        • Proceeds of remittances to India
        • Transfers from other NRE/ FCNR (B) accounts
        • Interest accruing on the funds held in the account
        • Current income like rent, dividends in India etc. subject to payment of applicable taxes
        • Maturity or sale proceeds of any permissible investment in India which was originally made by NRE/              FCNR (B) account or out of remittances received from outside India through banking channels
       • Refund of shares or debentures subscriptions to new issues of Indian companies if the same was paid             from NRE/ FCNR (B) account or by remittance from outside Indian through banking channels.

8. NRE Joint can be opened by:
       • Two or more NRI’s
       • Two or more PIO’s
       • NRI with a resident relative*
       • PIO with a resident relative*

*However, the resident relative can operate the account only as Power of Attorney holder.