Taxability of interest from fcnr a/c of resident individual

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

28 October 2013 Assessee is a Resident. He maintains FCNR account is USD. Will interest on such FCNR account be taxable in hands of the resident in India?

If this resident individual has a saving bank account in New York and he earns interest income from such saving bank account, then will the interest be taxable in India?

Kindly address this query and give your opinions.

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

29 October 2013 In case of a resident, his/her global income is taxable in India at normal tax rates.

however, he may claim benefit of a DTAA if applicable and deduction of taxes withheld in any other country.

So yes, the interest in FCNR account, and interest in saving bank account in NY is taxable in India.

Querist : Anonymous

Querist : Anonymous (Querist)

29 October 2013 So what about the exemption available in section 10 (4) of Income Tax Act?

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

29 October 2013 please read the proviso to the said section:

"Provided that such individual is a person resident outside India as defined in clause (q) of section 211 of the said Act or is a person who has been permitted by the Reserve Bank of India to maintain the aforesaid Account ;]]"

You need to person resident outside India ie you need to non-resident for Indian tax purposes to claim any such exemption.

Querist : Anonymous

Querist : Anonymous (Querist)

29 October 2013 The assessee has FCNR account. Now, the bank won't allow any XYZ person to open a FCNR account. Hence, this satisfies the clause "is a person who has been permitted by RBI to maintain the aforesaid account"

Nikhil Kaushik

Nikhil Kaushik (Expert)
Follow

29 October 2013 then check whether the said account was opened in a previous year when he was a non-resident. once the account holder returns to India the tax exemption is not allowed.

Querist : Anonymous

Querist : Anonymous (Querist)

29 October 2013 If anybody else can comment on the query..

Aashok Kumar Sharma

Aashok Kumar Sharma (Expert)
Follow

26 July 2025 Taxability of interest from fcnr a/c of
resident individual
 28 October 2013
Assessee is a Resident. He maintains FCNR account is USD. Will
interest on such FCNR account be taxable in hands of the resident in
India?
If this resident individual has a saving bank account in New York and he
earns interest income from such saving bank account, then will the
interest be taxable in India?
Kindly address this query and give your opinions

You need to be the querist or approved CAclub expert to take part in this query .
Click here to login now