Archive · 13 Aug 2026

NRI Tax Rules: NRE and FCNR Interest Tax-Free, NRO Taxable

NRI Tax Rules: NRE and FCNR Interest Tax-Free, NRO Taxable

When people from India live and work in another country, they are called non-resident Indians, or NRIs.

Many NRIs keep money in bank accounts in India, and there are special accounts for them called NRE, NRO, and FCNR.

These accounts are used for different things: NRE accounts hold foreign earnings in Indian money, NRO accounts hold money earned in India, and FCNR accounts hold foreign currency.

The government made a new special offer in June that lets NRIs put foreign-currency deposits in Indian banks, and the Reserve Bank of India handles the risk.

Whether NRIs pay tax on the interest depends on which account the money is in.

Interest from NRE and FCNR accounts is usually tax-free in India, which means no tax has to be paid on it.

But interest from NRO accounts is taxable, and the tax rate is 30% plus extra charges.

India has an agreement called DTAA with 90 countries so NRIs do not have to pay tax twice on the same money.

To know how much tax someone owes, India first checks how many days that person spent in the country.

Sources