It is quite common for a number of Indians living abroad to send money back to their homeland. However, a number of Non-Resident Indians (NRIs) face a major issue when it comes to maintaining a Rupee account in India. This proves a major stumbling block in convincing them to send money to their native land. Thanks to the option of opening a Non-Resident External (NRE) account in the country, a possible resolution to this issue has been found. Now, not many people ask why I should remit money to India.
Moreover, with the Foreign Exchange Management Act (FEMA) not specifying any restrictions or limits to such remittance amounts by NRIs to India, it has become easier for them to transfer money to the country.
Understanding an NRE account
An NRE account is an exclusive savings account for NRIs. It serves the purpose of repatriation of funds arising out of earnings in some foreign country. With the help of this account you can conveniently transfer your earnings from abroad to India in a process that guarantees complete security. This money that is transferred to an NRE account gets converted into the Indian currency, thus allowing you as an NRI to hold and maintain your foreign earning in Indian Rupee terms. It allows you to repatriate all your funds, inclusive of the interest sum, at any given point of time.
Benefits of sending money to NRE accounts for an NRI
As an NRI, you may often be prompted to ask why I should remit money to India. Here are some financially advantageous benefits that you can earn in the process.
You can send as much money as you want back home to India
You get to stay in complete control of your hard-earned income in a foreign currency
You have the freedom of making fund transfers to and from the country
You will be provided with a Multicity checkbook with which you can make check payments at various locations around the world
It will provide you round-the-clock account access thanks to a secure Internet banking facility accessible anywhere, anytime
The Internet banking facility offers option for utility bill payment as well as online shopping
You can easily withdraw cash from any location
It allows you to appoint a nominee for the NRE savings account
The Indian Reserve Bank allows an NRI to transfer funds from a non-resident ordinary (NRO) account to his new NRE account
If you are still not convinced about why youshould remit money to India, you should probably consider the tax sops on offer. The money you send to your NRE account will not be taxable as it is treated as an earning from abroad, provided you qualify as an NRI. Only the interest you earn on this amount will be taxable, but what you do to show tax savings is your own decision. However, you will be required to pay tax as per the rules of the land where you are earning your living.
Now consider this, if you are living in the Middle East where income is non-taxable, you get to save every penny of your earning while your money sits safely in an Indian bank.
I believe that should be enough to convince you and make you change your mind to remit money to India.