Interest from nre fd a/c

This query is : Resolved

P.SARAVANAN (Querist)
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12 August 2015 Kindly advise me whether Interest from NRE FD a/c and NRE SB a/c is taxable in the hands of an Individual who is a Resident But Not Ordinarily Resident (RNOR)for the Asst. Yr. 2015-16. In Asst Yr 2014-15, he is a Non- Resident.

As per S.10(4), Non-Resident is eligible for exemption if he receives Interest from NRE a/c. Will this Section extend to RNOR?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2015 Interest on NRE FD is exempted till its maturity. Once he becomes resident all NRE account has to be converted as resident foreign currency account.

P.SARAVANAN

P.SARAVANAN (Querist)
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12 August 2015 Sir,

Thanks for yoru reply. Advise me

If the Individual is RNOR for the Asst Yr 2015-16, will the exemption extend till maturity or since he has become "RESIDENT" but NOT Ordinarily RESIDENT he has to pay tax for interest from FD.

Because I thought he is a Resident(RNOR) hence it will be taxable.

Or will it become taxable only if he become Resident and Ordinarily Resident or after FD maturity whichever is earlier.
Kindly clarify.

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CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 August 2015 All foreign income is exempt until he becomes Resident and ordinary resident. NRE deposit till its maturity is exempted.

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