Foreign assets include NRE & FCNR deposits maintained in India ?

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This query is : Resolved

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This discussion clarifies whether NRE and FCNR deposits maintained in India are considered foreign assets for disclosure in Schedule FA for resident assessees. While these accounts are held in India, the consensus is that they do not need to be declared under Schedule FA. Instead, bank accounts held in India are declared separately in the Income Tax Return (ITR) under a specific section for Indian bank accounts.

Krishna

Krishna (Querist)

19 December 2024 sir;

Does foreign assets include NRE & FCNR deposits maintained in India ? These details are required to be disclosed in schedule FA ( foreign assets) in case of resident assessee?

please reply. Thanks in advance.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 December 2024 FCNR and NRE deposits can be closed immediately or can be allowed to run up to maturity. However, you must re-designate your NRE FD as a resident FD. If you choose to continue till maturity, you will get the contracted rate of interest until maturity. Premature withdrawals/closure will attract penalty as per terms of the deposit.

For FCNR deposits and NRE account/deposit, you also have an option to transfer the balance to a Resident Foreign Currency Account (RFC). No penalty is payable for premature withdrawal of NRE/FCNR accounts in such cases.

As per FEMA, you are resident from day 1 of return. Therefore, you cannot make investments as an NRI. Similarly, you cannot hold bank accounts that only an NRI can own.
Therefore, you must inform your bank about the change in your residential status.

Krishna

Krishna (Querist)

20 December 2024 Sir for FCNR account there is an option to hold till maturity or convert into RFC once becomes resident. If not convert into RFC then this account is required to be disclosed in schedule FA. Because this account opened in India. And schedule FA does not accept country India.

Dhirajlal Rambhia

Dhirajlal Rambhia

(Expert)

20 December 2024 No. All the accounts opened/held in India are to be declared under 'Do you have a bank account in India;' in Column 13 of Schedule 'Computation of tax liability on total income' of ITR.

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