NRE vs NRO Account: Which One for Property Purchase?
The Direct Answer
NRE (Non-Resident External) = Money you earned abroad. It is fully repatraible. Use this to BUY property. NRO (Non-Resident Ordinary) = Money earned in India (Rent, Dividends, Sale Proceeds). Use this to RECEIVE funds (Rent/Sale).
The Golden Rule
Always Buy via NRE; Always Receive via NRO. If you pay for a property using an NRE cheque, the RBI allows easy repatriation of the principal amount later. If you pay via NRO (Indian earnings), repatriation requires more paperwork (15CA/15CB).
Comparison Table
| Feature | NRE Account | NRO Account |
|---|---|---|
| Source of Funds | Foreign Income (USD/GBP/AED) | Indian Income (Rent/Sale Proceeds) |
| Repatriability | Freely Repatriable (No limits) | Restricted ($1M USD / year) |
| Tax on Interest | Tax-Free in India | Taxable at ~30% |
| Joint Account | With another NRI only | With Resident Indian (Former or Survivor) |
| Best Use | Parking Savings / Buying Home | Collecting Rent / Paying Bills |
Common Scenarios
- Buying a Flat: Transfer Dollars -> NRE Savings -> Write Cheque to Builder.
- Collecting Rent: Tenant transfers INR -> NRO Savings.
- Selling a Flat: Buyer pays INR -> NRO Savings -> You repatriate to Foreign Account.
- Paying Home Loan: Can pay from NRE or NRO (but preferable to pay from NRE to keep Repatriability intact).
Can I transfer money between them?
- NRE -> NRO: ✅ Yes, Allowed freely.
- NRO -> NRE: ❌ Restricted. Requires 15CA/15CB certificates (proof of tax payment).
Kanav Arora
Real Estate Investor
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