Question 1

Can NRIs invest in Public Provident Fund (PPF)?

Accepted Answer

NRIs can keep contributing to an existing PPF account that was opened while they were a resident Indian, and it continues to earn 7.10% p.a. with full EEE tax status until maturity. FEMA rules prohibit opening a fresh PPF account once status changes to NRI. After maturity, common NRI-friendly replacements include NRE fixed deposits, Post Office Time Deposits, and debt mutual funds held in an NRE demat account.

Question 2

What is the difference between NRE and NRO fixed deposits?

Accepted Answer

NRE FDs are funded from foreign-exchange remittances; both principal and interest are fully repatriable and the interest is tax-free in India. NRO FDs are funded from Indian-source income (rent, pension, dividends), interest is taxable as per your income slab, and only up to USD 1 million per financial year can be repatriated from an NRO account after tax. Use NRE for parking overseas earnings; use NRO for managing Indian income.

Question 3

What are the repatriation limits for NRI investments in India?

Accepted Answer

There is no upper limit on repatriation from NRE and FCNR accounts. From NRO accounts, NRIs can remit up to USD 1 million per financial year after paying applicable Indian taxes and submitting Form 15CB / 15CA. Sale proceeds of Indian securities or property can also be remitted under the same USD 1 million NRO ceiling subject to documentation. Bank FDs held in NRE form offer the cleanest repatriation path.

FCNR(B) Deposit (1Y, USD)

Key Details

Tax Treatment

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