NRO Account Meaning and NRO vs NRE for Property Sale Money

An NRO account (Non-Resident Ordinary) is an Indian rupee bank account for money that arises in India: rent, pension, inherited money and the proceeds of selling land or a house. An NRE account (Non-Resident External) is for money you earned abroad. If you are selling inherited property, the buyer pays into your NRO account, and you can generally send up to USD 1 million a financial year abroad from it after tax.

That one rule decides a lot: which account to give the buyer, how fast the money can leave India, and how its interest is taxed. Here is the plain version, with a 30-second helper to place your own money.

What is an NRO account?

An NRO account is a normal Indian savings, current or fixed deposit account, held by someone who is now a non-resident, for income and money that comes from India. The full form is Non-Resident Ordinary. It is governed by FEMA, India's foreign exchange law, and you can read the short version in our NRO account glossary entry.

When you move abroad and become an NRI, any resident savings account you still hold should be re-designated as an NRO account. Banks call this "conversion to NRO". Keeping a resident account after you have become a non-resident is not allowed under FEMA rules, so tell your bank when your status changes.

Typical money that goes into an NRO account:

• Rent from a house, shop or leased farmland in India.
• Pension, dividends and interest earned in India.
• Money inherited from a parent's Indian bank account or fixed deposits.
• The price from selling inherited land, a house or a plot.
• Money from abroad, too: NRO accepts foreign remittances, though they then become subject to NRO rules.

What is the difference between NRO and NRE?

The short answer: NRE is for money from abroad and is freely repatriable and tax-free in India; NRO is for money from India, is taxable and has a yearly limit on sending it out. Both hold Indian rupees. If you want to keep foreign currency itself, that is a third account type, FCNR(B), which is a fixed deposit only.

The tax line is written into law. Interest on an NRE account is exempt for a person resident outside India: section 10(4)(ii) of the 1961 Act, and since 1 April 2026 Schedule IV, serial 1, read with section 11 of the Income-tax Act, 2025. NRO interest has no such exemption.

Which account does property sale money go into?

Sale proceeds of property in India go into your NRO account in almost every case. This includes inherited land, inherited houses, agricultural land you inherited, and anything you bought while you were still living in India or paid for with Indian money.

There is one narrow exception. If you bought the property as an NRI with money brought from abroad, or from your NRE or FCNR account, FEMA lets you repatriate the amount you originally paid in foreign exchange. For residential property this applies to no more than two houses. Some banks will let that repatriable part be sent abroad directly or credited to NRE; anything above it, such as the gain, is handled through NRO and the USD 1 million route. Keep your old foreign remittance certificates and bank statements; without them the bank will treat it all as NRO money.

Use the helper below to place your own money.

How much can you send abroad from an NRO account?

You can generally send up to USD 1 million per financial year (April to March) from NRO balances, covering sale proceeds of assets and inherited money, once tax is paid. The limit is per person, so two NRI siblings who each receive their share of a sale each have their own USD 1 million.

The rupee equivalent moves with the exchange rate on the day you remit. A larger amount simply goes out over more than one financial year. Transfers from NRO to NRE count within the same limit. The NRI repatriation calculator splits a larger amount across years for you.

Which forms do you need: Form 145 and Form 146?

To move NRO money abroad, you file Form 145 online and, in most cases, give the bank a chartered accountant's certificate in Form 146. These replaced the familiar Forms 15CA and 15CB from 1 April 2026, under section 397(3)(d) of the Income-tax Act, 2025. Banks and CAs still often use the old names. See Forms 145 and 146 for more.

1. 1

   Collect the TDS proof

   The buyer deducts TDS and pays the rest into your NRO account. Get the TDS certificate and check that it shows against your PAN.
2. 2

   Ask a CA for Form 146

   The CA checks the sale deed, the gain and the tax paid, and certifies that tax on the money has been dealt with. In broad terms this is needed when remittances in the year exceed ₹5 lakh.
3. 3

   File Form 145 online

   File it on the income-tax e-filing portal, quoting the CA certificate. Keep the acknowledgement.
4. 4

   Give the bank its paperwork

   Usually the forms, a remittance request, the sale deed, and proof of inheritance if relevant, such as a will, succession certificate or legal heir certificate.
5. 5

   File your Indian tax return

   Report the gain for the tax year of sale and claim back any excess TDS.

If the buyer is about to deduct TDS on your full sale price rather than on your gain, a lower TDS certificate applied for before payment can stop lakhs being held back. The money held back is not in your NRO account until a refund comes, which also delays repatriation.

How is NRO interest taxed?

NRO interest is taxable in India, and the bank deducts TDS before crediting it. For most NRIs that is 30% plus 4% cess, about 31.2%, in FY 2026-27, with surcharge on top at higher incomes. This was section 195 of the 1961 Act; it is now section 393(2), Table serial 17, of the Income-tax Act, 2025.

You can often pay less. India's tax treaties with many countries cap tax on interest at a lower rate. To claim it, give your bank a tax residency certificate from your country and the declaration form it asks for. You must also usually report NRO interest in your country of residence, where you may get a credit for the Indian tax.

This is why parking sale proceeds in an NRO fixed deposit for months can cost more than people expect. If the money is going abroad anyway, plan the remittance soon after the sale.

Can an NRO or NRE account be held jointly?

Yes, with different rules. An NRO account can be held jointly with resident Indians, such as a parent or sibling, and with other NRIs. An NRE account can be held jointly with other NRIs, and with a resident close relative only on a "former or survivor" basis: the resident can operate it only under a power of attorney while you are alive.

Joint holding is about operating the account, not who owns the property money. If a buyer pays two NRI co-owners, each one's share should go to their own NRO account, so each can use their own USD 1 million limit and tax return. When the sale involves several heirs, our guide to selling inherited property as an NRI walks through the sequence.

Are there special rules for agricultural land?

The account rule is the same: sale proceeds of inherited farmland go to NRO. The tax rule can differ. Rural agricultural land is not a capital asset at all, so its sale may be tax-free, while urban agricultural land is taxed like any other property. Read tax on agricultural land sale before you agree a price.

NRIs cannot buy agricultural land, a plantation or a farmhouse in India, but they can inherit and sell it. That is why most farmland money NRIs handle arrives as an inheritance, through NRO.

What should you do before the buyer pays?

Give the buyer your NRO account details in the agreement, line up a CA, and check the land itself is still exactly what your papers say. A surprise entry in the record of rights or a new mutation can delay a sale long enough to push repatriation into another financial year.

While a sale is being arranged, PlotPehra watches your land on two fronts: every clear satellite image of the plot, and in 19 states a weekly check of the official land record for a new owner, mutation or change in area. A real person reviews any change and explains it by email and WhatsApp. No power of attorney, ever.

This article is general information, not tax, banking or legal advice. Rules were checked on 29 October 2026 for FY 2026-27 and can change. Banks apply FEMA rules with their own paperwork, so confirm with your bank and a chartered accountant in India before you sell or remit.