The moment you move abroad, your Indian bank situation quietly turns into a legal question. The money side is simple once you can see the picture, but doing it the wrong way causes real headaches later. Here is the clean path for holding and moving money between the Netherlands and India.
Why you can't just keep using your old Indian account
Once you become an NRI (Non-Resident Indian, broadly once you live abroad beyond the residency threshold), your ordinary resident savings account is no longer the right home for your money under India's FEMA rules (the Foreign Exchange Management Act). This is not a grey area, and paying a foreign salary into a resident account is the exact mistake to avoid.
- You are expected to redesignate your old resident savings accounts to NRO, or close them.
- Sending your Dutch salary straight into a resident account can create tax and repatriation problems down the line.
- Setting it up correctly from the start saves you years of paperwork and friction.
NRE vs NRO, in one minute
| NRE | NRO | |
|---|---|---|
| What goes in | Money earned abroad (your NL salary) | Money earned in India (rent, old FDs, dividends) |
| Interest taxed in India? | No, tax-free | Yes, taxable |
| Send money back abroad? | Freely repatriable | Limited: about US$1M/year + CA certificate |
The simplest way to remember it: NRE is for money coming from abroad; NRO is for money that arises inside India.
Why open the NRE account early
- It is far easier to open while you can still walk into your Indian branch, or right as you leave, than to arrange it remotely later with attested forms couriered back and forth.
- Your very first NL salary needs a clean place to land. Without an NRE account ready, people default to their old resident account, which is precisely the wrong move.
- NRE interest is tax-free in India and the balance is fully repatriable, so the sooner your foreign earnings sit there, the better.
- Most banks let you open NRE and NRO together as a pair. That is exactly what you want.
The flow that keeps you clean
Route your Dutch salary into your NRE account (via Wise, your bank, or a remittance service, see our sending money to India guide). Any India-side income, like rent, goes into your NRO account. You can move money NRE to NRO freely; going the other way is where the limits kick in.
Getting money back out (NRO to NRE / abroad)
This is the one direction with friction. Repatriating from an NRO account, either abroad or into your NRE account, is capped at roughly US$1 million per financial year, and your bank will ask for a chartered accountant's certificate (Forms 15CA and 15CB) confirming taxes are settled. NRE money, by contrast, flows out freely. That asymmetry is the whole reason you want foreign earnings landing in NRE, not NRO.
Not tax or legal advice
FEMA and tax rules are detailed and change over time. Use this as the mental model, then confirm the specifics with your Indian bank and a chartered accountant before you move large sums.
Official sources
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