A few days ago Raj left the following comment:
Came across your website while trying to do some research and I was wondering if I could trouble you for some advice
I currently live in the UK and the father lives in India and looks after some familial property in India.
He has now come to an age that he will need to be looked after and he’s planning to come and live with me.
I was looking to open a bank account which me and my brother (who lives in the US) can manage it online from abroad and primarily deal with funds coming from tenants and also if necessary transfer some money from the UK or from the US if any property maintenance is needed.
It’s all Kosher and needs to be quite straightforward for both of us to use.
Is there such facilities available in India and if so would you be kind enough to point me in the right direction.
Most banks seems to be interested in opening savings accounts but have been unable to find this information
Many thanks in advance
I think I’ve seen the question about how NRIs should deal with rental incomes earlier as well, and I imagine this must be a fairly common scenario with so many Indians living abroad and owning property in India.
However, as Raj says, most bank staff don’t seem very knowledgeable about this and the few people I asked gave me some conflicting answers as well.
I’m going to share what I found anyway and as usual, comments will help point out any inaccuracy and help further the discussion.
You can receive rental income in NRE and NRO current accounts
The link on NRE and NRO accounts on the FEMA website state that you can receive rental income on current accounts of both types and then repatriate this money as long as you comply with the other rules governing the account.
Here is the relevant text about the NRE account:
Credit of current income like rent, interest, pension, dividend etc. after deduction of tax (IDS) and obtaining CA certificate that the funds are eligible for remittance and applicable tax has been paid/provided for. – RBI circular No. 5 dated 15-7-2002.
This means you can receive rental income as long as tax has been deducted on it and you have obtained a CA certificate stating that tax has been deducted on it.
Here is the relevant text about the NRO account:
NRIs can repatriate their current incomes like rent, dividend, interest, pensions etc. by debit to their NRO Account. They should produce a certificate of Chartered Accountant that the amount is eligible for remittance and applicable taxes have been paid/provided for
This again states that you can repatriate the funds as long as you produce proof in the form of a CA certificate that shows that you have already paid tax on this income.
Shiv found a very useful ET article on this which asks for clarity in repatriation rules and covers a lot more ground than I’ve done in this post.
Finally, I would think that if you were in this situation, you should avail the services of a CA before opening the account so that the CA can acquaint you with the nuances of this transaction, and you would anyway need the CA to get a tax certificate later on so might as well hire one earlier in the process and ask any questions you may have.