Indians working abroad often open bank accounts in India to safeguard their earnings and help their families. The Reserve Bank of India (RBI) has clarified the situation regarding joint bank account rules for Non-Resident Indians (NRIs). After the February 2025 update and budget announcements, now NRIs are going to get many new facilities in account operations and taxes. If you also live in Gulf or any other country, then it is important for you to know these rules.
What are the rules for opening and running a joint account?
As per RBI’s Master Direction dated January 16, 2025, NRIs can open their NRE and FCNR accounts jointly only with their close ‘resident relative’. The definition of relative has been decided under the Company Act 2013. At the same time, NRO account can be opened with any resident Indian, it is not mandatory to be a relative for this.
The most important thing is that all these joint accounts will essentially be run on ‘Former or Survivor’ basis. This simply means that as long as the NRI (account holder) is alive, the full rights of the account will remain with him only. The resident relative whose name is linked will be able to operate the account only after the death of the main account holder.
What changed in power of attorney and tax exemption?
If an NRI living abroad wants any of his relatives in India to look after the bank’s affairs, he will have to give ‘Power of Attorney’ (PoA) to that person. A person with POA can only do things like cutting checks or making local payments, but he cannot send money abroad from that account.
Big financial relief has been given for NRIs in Budget 2025. Now TCS will not be deducted on sending money up to Rs 10 lakh under the ‘Liberalized Remittance Scheme’ (LRS), earlier this limit was Rs 7 lakh. Also, the basic tax exemption limit for NRIs has also been increased to Rs 4 lakh.
New figures related to NRI banking (February 2025):
Feature New Update TCS exemption limit up to ₹10 lakh (under LRS) Basic tax exemption increased from ₹3 lakh to ₹4 lakh LTCG tax at 12.5% (on property sale) NRO remittance limit $1 million per year