Ready Reckoner
READY RECKONER #4 · MONEY FLOW

I earn abroad but also receive income in India. Where should each go?

Think in two buckets: money coming from abroad, and money arising in India.

30-SECOND ANSWER

Don't mix everything simply because all the money belongs to you.

Overseas remittances are permitted credits to NRE accounts. Indian current income such as rent, dividend, pension and interest can be handled through NRO; RBI also permits such current income to be credited to NRE when the authorised dealer is satisfied about its character and applicable tax has been deducted, paid or provided for.

See your money before choosing the account

Salary earned in Dubai, Qatar, UK, US or elsewhereOverseas earnings → inward remittance → NRE may be relevant

If you want a repatriable rupee balance in India, understand the NRE route.

Rent from your Indian propertyIndian current income → NRO is a straightforward route

Current income can also be credited to NRE subject to RBI's conditions and the bank being satisfied about tax compliance and repatriable character.

Pension, dividend or interest arising in IndiaIndian current income → check NRO/NRE permitted-credit conditions

Do not decide from the label alone. Ask what the income is, whether tax has been dealt with, and whether you expect to repatriate it.

Three questions prevent most confusion

1. Where did the money arise?Outside India or inside India?
2. Has applicable Indian tax been dealt with?This can matter when current Indian income is credited or remitted.
3. Will I need the money outside India later?The account's repatriation rules then become important.

A useful nuance many people miss

“Indian income can never enter NRE” is too broad.

RBI's current FAQ says current income such as rent, dividend, pension and interest can be a permissible credit to NRE, provided it has not lost its repatriable character. RBI guidance also states the authorised dealer should be satisfied that applicable income tax has been deducted, paid or provided for.

Before moving a large amount

Identify the exact source: salary, rent, interest, dividend, pension, sale proceeds, gift, inheritance or something else.
Ask whether the receipt is a permitted credit to the account you plan to use.
Check tax/documentation requirements before assuming the money can later be sent abroad in the same way.

Official basis

Reserve Bank of India

RBI's non-resident account FAQ lists inward remittances and specified current income as permissible NRE credits, while NRO permits inward remittances and legitimate dues in India. RBI separately explains the conditions for crediting current Indian income such as rent, dividend, pension and interest to NRE.

Open RBI account guidance →

Open RBI current-income guidance →

Last verified: 17 August 2026. This is general education, not personalised tax or FEMA advice. Sale proceeds, gifts, inheritance and other capital receipts need separate analysis.

Your money may come from more than one place.

Tell Amrutha what you earn abroad, what you receive in India and what you plan to do with the money. The right conversation starts with the money flow.

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