Credit to NRO account from PPF account

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This discussion clarifies the tax implications of transferring Public Provident Fund (PPF) maturity proceeds to an Non-Resident Ordinary (NRO) account. The advice confirms that funds credited to an NRO account upon maturity are generally tax-exempt, even if the PPF account was initially opened as a resident Indian and the account holder later became an NRI. It also touches upon premature closure, advising that keeping the account until maturity is the recommended course of action.

RAJEEV KUMAR MEHTA

RAJEEV KUMAR MEHTA (Querist)

05 October 2023 Sir,
How the amount credited on maturity of PPF A/c to NRO A/c will be treated under Income tax rukes!
The PPF account was opened as Resident Indian but after few years the status changed to NRI.
Would appreciate kind advice!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 October 2023 It's exempt from tax.

RAJEEV KUMAR MEHTA

RAJEEV KUMAR MEHTA (Querist)

05 October 2023 Thank You for the prompt response! However what happens if the PPF account is closed prematurely in view of the NRI status? Still 2 Years remain for maturity! Kindly advise!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

05 October 2023 You can keep it till maturity.

RAJEEV KUMAR MEHTA

RAJEEV KUMAR MEHTA (Querist)

05 October 2023 Noted your kind advice but how much tax will have to be paid on maturity when the proceeds are credited to NRO Account?
Thank You Sir!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

06 October 2023 No tax payable when proceeds credited to NRO account.

RAJEEV KUMAR MEHTA

RAJEEV KUMAR MEHTA (Querist)

07 October 2023 Thank You Sir for your kind advice!

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

07 October 2023 You are welcome.
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