Taxability of nre accounts of a resident indian who is a us

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

11 November 2015 A person who has moved to India 5 years ago is still maintaining his NRE account. During the year, the FD in the NRE account has matured. The individual is a US citizen.
My queries are:
1. IS the interest taxable?
2. According to SEction10(4)(ii)and 10(15)(iv)(fa) the interest is not taxable if the person is a resident outside India as per FERA definition. FERA talks about an Indian Citizen. What about US citizens?
3. The banks have allowed him to open a n NRE account due to his citizenship status inspite of him being a resident of India now. They have assured him that the interest is tax-free.
Kindly Help.

Amol S Joglekar

Amol S Joglekar (Expert)
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11 November 2015 01. YES because his status is RESIDENT and ordinarily resident.

02. FEMA is not applicable so dont get confused with that.

03. Banks are NOT the authority in Income Tax. If they claim so, let them file the income tax return as well.... Many a nationalised banks have their own TAX consultancy Divisions.