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Neem coated urea (NCU) applied to rice can result in high N use efficiency as it contains nitrification inhibition properties. Field experiments were conducted for three years (2005–2007) at Ludhiana (sandy loam soil) and Gurdaspur (clay loam soil) for evaluating the relative performance of NCU vis-a-vis ordinary urea as a source of N for transplanted wetland rice. Along with a no-N control, the two N sources were tried at three N levels––40, 80 and 100% of the recommended level of 120 kg N ha−1. Different doses of N were applied in three equal split doses at transplanting, 21 and 42 days after transplanting (DAT). For need based site specific N management for improved N use efficiency, the two sources of N were applied using leaf colour chart (LCC). In this treatment a basal dose of N at the rate of 20 kg N ha−1 was applied after 7 DAT and LCC readings were recorded at weekly intervals starting 14 DAT. Whenever the intensity of green colour of the first fully opened leaf from the top was less than shade 4 of the LCC, N was applied at the rate of 30 kg N ha−1.