Income Tax Query

Hi, Thanks for the details. Sorry I mentioned then as NRO FDs. In fact, they are NRE FDs. Hence they were tax free.

Now what should I do?

1. Should I show them as taxable income in ITR and pay the tax on these? 

(Or)

2. Should I show it as non taxable income in ITR and get an exception?

Till the time you were non resident, interest on FCNR(b) i.e. (FD bought in foreign currency) will be exempt, thereafter it will be taxable.

Please rectify your ITR under section 154 and pay tax accordingly.

related provisions  extracted from google are as below.

1. Now, again, in case of a returning NRI, up till the date of return – interest income of FCNR(B) account is exempt from Tax. i.e. as a Resident outside India as defined under Foreign Exchange Regulation Act, 1973 such income is exempt uptill the date of return.

2. However, from the date of return the income from continued FCNR(B) account will be exempt by virtue of Section 10(15)(iv)(fa) of the Income Tax Act, 1961.
3. Therefore, in the year of return, the income from FCNR(B) account will be divided into two parts. Although, strictly speaking, both will be exempt :
   • interest income uptill date of return being exempt under Section 10(4)(ii),and
   • interest income from continued FCNR(B) account after the date of return being exempt under Section 10(15)(iv)(fa) of the Income Tax Act, 1961.