NRE Fixed deposits

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This discussion clarifies the tax implications of Non-Resident External (NRE) Fixed Deposits for individuals returning to India after an extended period abroad. The key takeaway is that interest earned on NRE deposits becomes taxable from the date of arrival in India, even if the deposits have not yet matured. The advice also touches upon the possibility of availing Resident Non-Ordinarily Resident (RNOR) status for a few years upon converting bank accounts to those of a Resident Indian.

Debashish Sen Gupta

Debashish Sen Gupta (Querist)
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04 September 2022 Please guide me on the taxability of NRE Fixed deposits for one who was away for 7 years. Have multiple bank NRE deposits of different tenures. He has to convert his bank accounts to Resident Indian can enjoy RNOR status for 2-3 years. In that case what will be the taxation on the interests of such deposits both paid and accrued from the time he is in India. Let's assumed NRE deposits are not yet matured. Thanks