You can transfer money from an NRO to an NRE account, up to USD 1 million per financial year, once Indian taxes on the underlying funds have been paid and the right compliance forms are filed. The Reserve Bank of India permits the movement under FEMA’s Remittance of Assets rules, but your bank will not release a single rupee until it can see the tax trail. Get the documentation right and the transfer clears in a few business days; get it wrong and it stalls for weeks.
The USD 1 Million Annual Cap
The ceiling is USD 1 million per financial year, and it is a combined ceiling: it covers transfers from your NRO account into an NRE account and direct remittances from NRO to overseas accounts, added together across every NRO account you hold at every Indian bank.1RBI: Reserve Bank of India. Accounts in India by Non-residents It is not per bank and not per account.
The Indian financial year runs April 1 to March 31, and the limit resets on April 1.2RBI. Accounts in India by Non-residents For a larger sum, splitting the transfer across two financial years uses two separate limits. Transferring USD 900,000 in March and another USD 900,000 in April is within the rules.
The framework sits under the Foreign Exchange Management Act.3RBI: Reserve Bank of India. Master Circular on Non-Resident Ordinary Rupee (NRO) Account It is separate from the Liberalised Remittance Scheme, which governs residents. NRO repatriation runs on its own track.
Clearing Indian Tax Before You Move the Money
An NRE account is freely repatriable. Once funds land there, they can leave India without further approval. That is why every rupee moving from NRO to NRE has to pass a tax checkpoint first.
TDS on NRO Income
Interest earned on NRO deposits is subject to tax deducted at source at a base rate of 30%, plus a 4% health and education cess, giving an effective minimum of 31.2% on income up to ₹50 lakh. Surcharges apply at higher brackets and can push the effective rate up to 42.74% on NRO interest above ₹5 crore under the old tax regime. Banks deduct TDS automatically before crediting interest.
Rent, dividends, and other Indian-source income credited to your NRO account may also have TDS taken at the applicable rates. If too much was withheld, you can claim a refund by filing an Indian income tax return, but that comes later. The transfer itself needs the tax to have been paid.
TCS Does Not Apply
Tax Collected at Source under Section 206C(1G) applies to outward remittances by Indian residents under the LRS. NRO-to-NRE transfers by NRIs are exempt. If a bank tries to add TCS to this transfer, push back.
Using the US-India Treaty to Reduce TDS
If you are a US tax resident, the Double Taxation Avoidance Agreement between the US and India sets lower withholding ceilings than India’s domestic 30%:4Internal Revenue Service. Tax Convention With the Republic of India
- Interest on bank deposits: 10% if paid on a loan from a bank or similar financial institution; 15% otherwise.
- Dividends: 15% where the beneficial owner holds at least 10% of the voting stock; 25% otherwise.
To claim the treaty rate, you need a Tax Residency Certificate from the US confirming your tax residence, plus Form 10F filed with the Indian Income Tax Department. Form 10F supplies details the Indian authorities expect that a TRC may not carry, such as your taxpayer identification number and address. Both should be with your bank and the tax authorities before the income is credited; otherwise the default 30% TDS applies. India has DTAAs with many other countries, so NRIs elsewhere should check whether their country of residence has a similar treaty.
Which Funds Qualify
Not every rupee in your NRO account is eligible. The source determines whether the bank will release it.
Current Income
Recurring Indian income is generally eligible: rent from Indian property, dividends from Indian companies, pension, and interest on Indian deposits. These credits need to be identifiable in your NRO statements, because the bank matches specific entries against your transfer request.
Capital Gains and Inheritance
Proceeds from selling Indian property, shares, or other assets can also be transferred, provided the original acquisition complied with FEMA rules in force at the time. Capital gains tax must be paid, and the holding period matters because long-term and short-term classifications carry different rates.
For inherited funds, you will need proof of your legal right: a probated will if one exists, or a succession certificate from an Indian civil court if the person died without a will. A legal heir certificate alone is usually not enough to release bank deposits or securities; most banks require the probated will or a succession certificate.
Form 15CA and Form 15CB
Every NRO-to-NRE transfer rides on tax compliance forms filed through the Income Tax Department’s e-filing portal. The amount you are moving in the financial year decides which parts you need.5Income Tax Department. Form 15CA FAQs
Up to ₹5 Lakh in the Financial Year
If your total remittances during the financial year stay at or below ₹5 lakh, you file only Part A of Form 15CA. This is a self-declaration that applicable taxes have been paid. No Chartered Accountant certificate is required at this level.5Income Tax Department. Form 15CA FAQs
Above ₹5 Lakh in the Financial Year
Once remittances cross ₹5 lakh, you need Form 15CA Part C together with Form 15CB. Form 15CB is a certificate from a Chartered Accountant who independently verifies the nature of the remittance, the applicable tax rate, and the TDS deducted.6Income Tax Department. Form 15CB User Manual The CA uploads Form 15CB to the portal, and you reference it when filing Form 15CA Part C.7Income Tax Department. Form 15CA User Manual
There is an exception. If you already hold an order or certificate from your Assessing Officer under Section 195(2), 195(3), or 197 of the Income Tax Act, you file Form 15CA Part B instead and skip the CA certificate.
Non-Taxable Remittances
If the remittance is not chargeable to Indian income tax at all, you file Form 15CA Part D. Most NRO-to-NRE transfers involve taxable Indian income, so Part A or Part C will cover the great majority of cases.5Income Tax Department. Form 15CA FAQs
What Else the Bank Wants
Beyond the tax forms, expect the bank to ask for a written transfer request, a signed FEMA declaration confirming you have not exceeded the USD 1 million annual limit, your PAN, and evidence of the source of funds. Source evidence means the registered sale deed for a property sale, bank statements showing dividend or rental credits, or inheritance documents where relevant. Checklists vary by bank, so request yours before you assemble the package.
How the Bank Processes the Transfer
You submit the forms and supporting documents either through your bank’s net banking portal, where most major Indian banks now accept online submission, or by delivering physical copies to your home branch. The compliance team then cross-references the forms against your NRO account activity.
Verification typically takes two to five business days. The bank checks that the transfer stays within the annual USD 1 million ceiling, confirms the tax certifications, and traces the source of funds. Larger or more complex transactions, such as a property sale of several crore, usually draw follow-up questions. Having your CA reachable and your sale deed, tax receipts, and statements organized in advance is what keeps a five-day process from turning into a three-week one.
Once cleared, the bank debits the NRO account, converts the rupees to the NRE account’s currency at the prevailing rate, and credits the NRE account. From there the funds are fully repatriable.
What the Transfer Costs
The transfer is not free, and the charges combine in ways that are easy to miss.
Currency Conversion and GST
Banks charge a foreign exchange conversion margin when converting rupees for credit into the NRE account. An 18% GST applies on top of the bank’s service fees and conversion charges, calculated not on the transfer amount but on the service value. That service value is tiered: 1% of the transaction value up to ₹1 lakh; ₹1,000 plus 0.5% of the amount above ₹1 lakh up to ₹10 lakh; and ₹5,500 plus 0.1% of the amount above ₹10 lakh for larger transfers. The 18% GST then applies to whatever that service value works out to.
CA Fees for Form 15CB
Where Form 15CB is required, Chartered Accountant fees typically run ₹3,000 to ₹5,000 per certificate. Transactions involving DTAA claims or multiple income sources can cost more. The fee is per certificate, so multiple transfers in the same year can mean multiple 15CB certificates.
Bank Processing Fees
Most banks charge a flat processing fee for NRO-to-NRE transfers, though the amount varies. Some banks waive it for premium NRI account holders. Ask about the fee schedule before initiating the transfer.
Using a Power of Attorney
If you cannot be in India, a Power of Attorney can handle some NRO account operations, but the limits are real. A PoA executed outside India has to be notarized before an authorized officer of the Indian Embassy or apostilled by the relevant authority in your country of residence, and then stamped in India under the applicable state’s Stamp Act. The document should spell out exactly what the PoA holder can and cannot do, including any transfer limits.
An Indian-resident PoA holder generally cannot transfer funds from your NRE account to another NRE account. Whether a PoA holder can initiate the NRO-to-NRE transfer itself is less settled and varies by bank. Some banks allow it; others require the account holder to authorize repatriation personally. Confirm with your bank’s NRI desk before assuming a PoA will do the job. Where personal authorization is required, many banks now accept video verification in place of physical presence.
Penalties for Getting It Wrong
FEMA contraventions, whether exceeding the USD 1 million cap, moving funds without paying applicable taxes, or filing false documentation, carry monetary penalties of up to three times the amount involved. Where the amount cannot be determined, the penalty can be up to ₹2 lakh. Continuing contraventions attract a further penalty of up to ₹5,000 per day after the first day.
These are civil penalties enforced through adjudication by the RBI and the Enforcement Directorate. FEMA’s compounding framework does allow certain contraventions to be settled by paying a compounding fee, avoiding a full adjudication, but the amounts still make non-compliance an expensive way to learn the rules. Getting the paperwork right the first time costs far less than fixing it after the fact.