Foreign bank account closed

Tax queries 187 views 5 replies

A foreign bank account containing foreign tax paid earnings was closed in April 2018. The foreign bank account closure proceeds was a cheque which was deposited in Indian bank account the RFC Account (Resident Foreign Currency). An undertaking was taken by bank before clearing the cheque which mentions "account closure proceeds".

The RFC account was emptied after 45 days entire foreign currency amount was converted into INR and moved to Savings Account, as that is the bank rule for RFC accounts.

Questions:

1) Since the foreign Bank Account was closed in FY 2018-19 (April 2018), should it still be declared in ITR2 of AY 19-20 with the balance in INR on the day of closure? 

2) Will the account closure proceeds appear in Form 26AS of the taxpayer through AIR and how to handle the same next year?

3) Should the account closure proceeds INR amount be declared in Schedule EI of the ITR2 next year?

How to handle this case, please help.

Replies (5)
1 it is not mandatory but advisable

2 it is not AIR transaction and will not reflect in it

3 yes it is assumed that your status in current year in NRI and hence income earned abroad can not be taxed in india.

Status is not NRI. Status was NRI several years ago but not now.

The foreign currency amount was lying in the foreign bank account since few years and with no transactions that account had to be closed in 2018. But whenever that income was earned, it was tax paid in foreign location.

Schedule TR_FA gives a approximate INR indication how much is lying in the foreign bank account in one financial year.

So whether the TR_FA is applicable for the few days of April 2018 in next year return?

Any update on above two clarifications?

Need more inputs on this. Please help.


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