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Fixed deposit interest

Others 380 views 4 replies
a person Indian origin but working outside India and open account in India, transfer his salary in his account and open fixed deposit but bank deducted TDS on his fixed deposit interest.
Replies (4)

Yes, bank should mandatorily deduct TDS when interest income exceed 10000/-

can this person file return and claim TDS and at the time of registration of pan no. the status of this person show resident or NRI

Give me clarity on Account which he is using whether NRE a/c or NRO a/c

1. According to sec 195 TDS will be deducted @ 30% in case of interest from FD to be payable to a non-resident. Because this income is accrued or arises in India and hence it is taxable in India. 
2. It is important to note here that there are two kinds of accounts with respect to Non-resident. NRE and NRO account. Both accounts can be maintained by NRI.
3. NRE account denotes foreign income and this will not be taxable in India. NRO account represents income earned in India and this will be subject to tax. 
4. If you have utilized your salary income to invest in FD, then the resultant interest income will be taxable in India and TDS u/s 195 @ 30% will be deducted on the same. 
5. This person can file return and claim TDS as refund provided his Indian income is below basic exemption limit. Before that PAN needs to be applied. 
Please correct me if the above solution has an alternative view. 


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