Reporting of specified financial transactions ( SFT ) by bank to income tax authorities reg

This query is : Resolved

Venkata Ratnam Jupudy (Querist)
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12 December 2023 As NRE fixed deposits opened by NRIs are tax free in India as per provisions of DTAA,
are the banks are to report these deposits in SFT submitted to income tax authorities ?
If they are reported in SFT, automatically they get reflected in AIS/TIS.
The department can not distinguish whether they are NRE deposits of tax free or normal fixed deposits ( taxable in India)
NRIS get notice that they did not file income tax returns in India as per AIS/TIS statements.
Is it not necessary to give instructions to Banks that they should not report time deposits of NRE opened by NRIs or to report them separately in a suitable format
as TAX exempt category deposits to avoid unnecessary litigation and harassment caused to NRIs
I request CA CLUB to represent to CBDT/Income tax authorities.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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12 December 2023 Banks are not required to report NRE deposits in SFT submitted to income tax authorities

Venkata Ratnam Jupudy

Venkata Ratnam Jupudy (Querist)
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12 December 2023 Sir
This is what I believed.
I checked the act / cdbt circulars.
I did not find any direction in this regard
I request you to kindly give any reference
/ circulars on this subject

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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13 December 2023 SFT circular doesn't include NRE deposit. Moreover the income from NRE deposit is not taxable in India so such reporting is not required.

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