NRI TAX RATE.

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This discussion clarifies the tax treatment for Non-Resident Indians (NRIs) on interest earned from Fixed Deposits in their NRO accounts. While Tax Deducted at Source (TDS) is applied at 31.2% under Section 195, the interest income is indeed taxed at the NRI's applicable slab rates when filing their Income Tax Return (ITR). It is not taxed at the same rate as TDS, nor is there a special tax rate applied beyond the standard slab rates.

rmalhotra

rmalhotra (Querist)
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02 July 2024 Sir,

As NRI , tax on Interest earned on FD in his NRO a/c with bank is deducted at @31.2% ( applicable for below Rs 50 Lacs ) under section 195 of Income Tax Act, as shown in AIS. Hence following queries:-

1. Now when NRI files ITR of this income from NRO FD Interest under head " income from other sources " then will it be taxed at slab rates ( as may be applicable ) in his case ?

2. Will it be taxed at same rate at which TDS is deducted u/s " 195 (k) any other income." ??

3. Is that above explained income of NRI is subjected to any special rate of tax when TDS is already deducted u/s 195 of Income Tax Act . ???

Pls guide early.