I am currently in US, and would like to transfer some amount from my US Bank account to a savings account based in India on a monthly basis through a third party like Xoom or Transfast.

If I'm going to transfer this amount, will it be taxable in India?

  • It seems to be yes, but it will be on the service charges you pay for the transfer not the amount itself. hindustantimes.com/business-news/WorldEconomy/…
    – DumbCoder
    May 16, 2013 at 16:21
  • But the question still remains unanswered, are there tax implications if I transfer money from my overseas account to a simple savings account in India and not to an NRE or NRO account?
    – user11029
    Aug 23, 2013 at 12:38

2 Answers 2


As NRI/PIO (Non-Resident Indian/Person of Indian Origin), the overseas income and transfers in foreign currency are exempt from Indian income taxes. However, the account in India has to be designated NRE or FCNR.

There are three kind of accounts that an NRI can maintain

  1. Non-Resident Ordinary Rupee Account (NRO Account)
  2. Non-Resident (External) Rupee Account (NRE Account)
  3. Foreign Currency Non Resident (Bank) Account – FCNR (B) Account

Interest earned in NRE and FCNR accounts is exempt from income taxes. Interest earned in NRO accounts is not exempt from income taxes, in fact banks would withhold about 30% of interest (TDS). The exact tax liability would depend upon income generated in India and TDS could be applied towards that liability when the tax returns are filed.

There are other implications also of designating the account as NRE or NRO. NRE accounts can only be funded via inward remittance of permitted foreign currency e.g. deposit USD/GBP. So proceeds like rental income, pension etc. that are generated in INR within India can't be deposited in this account. The money deposited in NRE account can grow tax free and can be converted back in any foreign currency freely. On the other hand NRO accounts can be funded through both inward remittance of permitted foreign currency or local income e.g. rental, pension etc. All the amount in this account is treated as Indian originated INR (even if remitted in foreign currency) and thus is taxed as any other bank account. The amount in this account is subject to the annual cap of convertibility of USD 1 million.

Both NRE and NRO accounts are maintained in INR and can be Saving and Term Deposit. Any remittance made to these accounts in any foreign currency is converted to INR at the time of deposit and is maintained in INR. FCNR account are held in foreign currency and can only be Term Deposit.

Official definitions: Accounts for Non Resident Indians (NRIs) and Persons of Indian Origin (PIOs)

  • 1
    +1. The NRO account credits from outside are not treated as taxable income.
    – Dheer
    May 17, 2013 at 3:32
  • Thanks @Dheer. Edited the post to clarify that we are talking about the tax implications of interest earned in these accounts. Income generated overseas is not subject to income taxes in India regardless of account used to deposit it.
    – amit_g
    May 17, 2013 at 4:57
  • 1
    If the indian account is not NRE/NRO/FCNR what are the tax implications and limits? Lets say I transfer to my wife's Saving account for maintenance purposes i.e. Indian Loan EMIs, Parents money etc. what would be the tax situations in that case?
    – AnBisw
    Dec 26, 2014 at 21:25
  • @Annjjawn This should answer you question. qr.ae/TU1kx2
    – Gokul
    Apr 3, 2018 at 8:55

If you are a non resident Indian, the income you earn and transfer to India is tax free in India. You can hold the funds in USD or convert then into INR, there is no tax implication.

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