05 September 2017
Dear Sir, I am an NRI since 2014 & have NRE FDs for tenures of 5/8/10 years. Now I am planning to return India permanently. Even after my return to India my NRE FDs still have the maturity period balance. Now as per IT rules interest earned from NRE FDs is Tax free during NRI status. Now my query is 1.Whether the interest earned from NRE FDs will be Tax free even after my return to India. 2. Whether the interest earned from NRE FDs will be Tax free only upto RNOR status, because I will get RNOR status for a period of two years. 3.Is it necessary to convert my NRE account to resident account & if so, in this case what will happen to my existing NRE FDs whether FDs can continue till maturity.
05 September 2017
1 Nre deposit till it's maturity is exempt even after returning to India. 2 Exempt till maturity. 3 FDs can continue till maturity. NRE account to be converted as resident account.
05 September 2017
Dear SeethaRaman Sir, Thank you very much for your reply. Sir, sorry to mention wrongly in my previous query that I am an NRI since 2014 but, I am an NRI since 2004. Sir, now I am in a dilemma because I have created many NRE FDs for tenures ranging from 5 to 10 years which will mature upto 2025 & many of friends are saying interest earned from NRE FDs will become taxable the moment you return to India permanently. I request your good self if possible to send me the corresponding Income Tax clauses in support of this. Since I am an NRI for almost 14 years I will get RNOR status for two years. Please help me in this regard.
15 September 2017
Q) If I have 8 year NRE FRD and if in second year I become resident, how NRE FDR will be treated after third year and will interest thereon be taxable? A) For returning Indians, funds held in fixed deposits in NRE accounts, interest will be payable at the rate originally fixed, provided the deposit is held for the full term even after conversion into resident account. However, the interest earned after the status was updated to resident will be taxable.
Dear Sir, In your website https://www.caclubindia.com/articles/nri-non-resident-indian-frequently-asked-questions-on-income-tax-for-ay-2014-15--20721.asp It says NRE FD interest is taxable once NRI become resident but it is not mentioned anything about RNOR & tax liability for NRE FD interest during RNOR status.
15 September 2017
Dear Sir, Your answers on 05 September 2017 1 Nre deposit till it's maturity is exempt even after returning to India. 2 Exempt till maturity. 3 FDs can continue till maturity. NRE account to be converted as resident account.
Read more at: https://www.caclubindia.com/experts/nre-fd-tax-on-interest-earned-from-nre-fd-during-rnor-status-2563424.asp
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