Taxability of interest earned on NRO accout

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sudharani (Querist)
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26 June 2010 Can any body answer the following issues;
1. interest earned on NRO account- is it taxable underthe income tax act.
2.is there any exemption for the interest earned on NRO deposits ?

Aditya Maheshwari

Aditya Maheshwari (Expert)
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26 June 2010 Exemption is provided for
ii) in the case of an individual, any income by way of interest on moneys standing to his credit in a Non-Resident (External) Account in any bank in India in accordance with the Foreign Exchange Regulation Act, 1973 (46 of 1973), and the rules made thereunder :

Provided that such individual is a person resident outside India as defined in clause (q) of section 282 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account ;]]

i. e. NRE acoount and not NRO.

Bhaskaran Chackrapani Warrier

Bhaskaran Chackrapani Warrier (Expert)
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28 June 2010 Interest on NRO account is taxable. TDS provisions also attracts. There is no exemption for such interest from income tax.

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