NRE vs NRO Tax Calculator (2026)

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Fixed Deposit Amount (₹)

FD Interest Rate (% p.a.)

Deposit Tenure (Years)

Account Type

DTAA Tax Treaty Country (for NRO)

NRE vs NRO Taxation Matrix in India (2026)

Non-Resident Indians (NRIs) must maintain separate NRE and NRO bank accounts according to FEMA and Income Tax Act rules:

Feature	NRE Account	NRO Account
Indian Income Tax Status	100% Tax-Free (Sec 10(4)(ii))	30% TDS (+ Cess = 31.2%)
DTAA Relief Rate	Not Applicable (Already 0% Tax)	10% - 15% TDS with TRC & Form 10F
Funds Source Allowed	Foreign Currency Remittances only	Indian Rent, Dividends, Pension, & Foreign
Repatriability Outside India	100% Unrestricted Repatriation	Capped at USD 1 Million / year

Key Benefits of NRE Accounts

Zero Tax Liability in India: 100% tax exemption on both savings and FD interest earnings.
Seamless Currency Movement: Freely transfer principal and interest back to US Dollars, Euros, or Dirhams.

Limitations & DTAA Prerequisites (2026)

Cannot Deposit Local Rupee Income in NRE: Local rental income or dividend payouts MUST go to NRO accounts.
TRC Requirement for DTAA: Must submit Tax Residency Certificate (TRC) annually to claim lower 15% NRO TDS.

NRI Banking Hack

Always submit Form 10F and your foreign TRC to your Indian bank branch before April 1st every year to lock in lower 15% DTAA TDS on NRO FDs!

Frequently Asked Questions

Is NRE FD interest tax-free in India?

Yes. Interest earned on Non-Resident External (NRE) savings and fixed deposit accounts is 100% tax-free in India under Section 10(4)(ii) of the Income Tax Act.

What is the TDS rate on NRO FD interest income?

Standard TDS on NRO fixed deposit interest is 30% plus applicable surcharge and cess (effective 31.2%). However, NRIs can claim lower TDS under DTAA tax treaties.

How does DTAA reduce NRO TDS for US, UK, and UAE NRIs?

Under Double Taxation Avoidance Agreements (DTAA), submitting a Tax Residency Certificate (TRC) and Form 10F reduces NRO interest TDS from 30% down to 15% (US/UK/Singapore) or 12.5% (UAE).

Can NRE funds be freely repatriated abroad?

Yes. Principal and interest in NRE accounts are 100% freely repatriable outside India without any limits or RBI clearance.

What is the repatriation limit for NRO accounts?

Under FEMA guidelines, NRIs can repatriate up to USD 1 Million (approx ₹8.3 Crores) per financial year from NRO account balances after paying applicable taxes and obtaining Form 15CA/15CB CA certificates.

Can an NRI deposit Indian rupee income into an NRE account?

No. NRE accounts can only accept foreign currency remittances originating from outside India. Rent, dividends, or pension earned in India must be credited to an NRO account.

What documents are required to claim DTAA benefit on NRO FDs?

NRIs must submit (1) Tax Residency Certificate (TRC) from foreign tax authority, (2) Self-declaration Form 10F, and (3) PAN Card copy to their Indian bank branch.

What happens to NRE/NRO accounts upon returning to India permanently?

Upon re-designation as a resident Indian, NRE accounts must be converted into Resident Foreign Currency (RFC) or regular resident savings accounts.

NRE vs NRO Account Tax Calculator (2026)