Which Indian accounts and paperwork do you need?
NRE, NRO, FCNR, PPF, property paperwork, and OCI. The Indian side of your finances, explained for someone living in the US.
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Overview
NRE, NRO, and FCNR: which accounts you need
If you visit an HDFC, ICICI, or SBI branch in India as an NRI living in the US, the staff will usually offer you an NRE savings account. They often won't explain that NRE is only for money earned outside India, that you need an NRO account for income earned in India (rent, interest, dividends), or that FCNR is a dollar deposit that protects you from currency risk for terms longer than a year. Many NRIs leave the branch with the wrong accounts and find out two tax seasons later.
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Here is how the three accounts work. NRE: you deposit money earned abroad, converted to rupees. It is fully repatriable and the interest is tax-free in India, but the rupee balance loses about 3.5% a year to currency depreciation. NRO: holds rupees earned in India. You can move up to $1 million a year out of it. Interest has 30% TDS deducted, which you can usually claim as a credit on your US Form 1040 under the DTAA. FCNR: you deposit dollars directly, so there is no currency conversion, and earn 4.5% to 5.5% in USD. It is fully repatriable and has no Indian tax. Each account has a specific use, and very few NRIs need all three.
This topic covers the five India-side questions we get asked most. Selling property has its own guide because the paperwork (TDS, the lower deduction certificate, and Form 15CB for repatriation) takes some explaining. PPF has a guide because almost every NRI has one and few understand the maturity rules. EPF and EPS also get a guide, because people often treat them like a 401(k), and they work differently.