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I moved from India to US on H1B last year. I have landed some money to my brother for some business without any interest. Now I would be receiving that money back from him. I need to transfer that Money to US. I have NRO and NRE account.

Question: 1. Which account should I use NRE / NRO? 2. Do i need to report any thing while filing my taxes with 1040 or do I need to submit any other form.

Thank you in advance.

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Deposits into NRE account can only be done from funds outside India. So your brother cannot deposit into your NRE account.

He can deposit in NRO account or directly wire transfer the funds. Both these require some paper work depending on the amount.

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NRE is better. It's a tax free account, exempt from income tax. NRE account is freely repatriable (Principal and interest earned) while the NRO account has restricted repatriability

  • This answer is mostly wrong as a response to the question asked. – Dilip Sarwate Jan 31 '16 at 2:42
  • He asked which account is better? I answered it – Tanner Di Bella Jan 31 '16 at 2:43
  • Nonsense. The OP asked whether the money should be deposited in the NRE account or the NRO account. Cheer's answer is right on point; money deposited into an NRE account must come from external funds. Your claim that the NRE account is "better" is incorrect for this situation where the money is being deposited in India by the OP's brother from rupee funds. – Dilip Sarwate Jan 31 '16 at 2:59
  • According to the Board of Finance of India, I am correct. – Tanner Di Bella Jan 31 '16 at 3:01

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