SUDHIR VARDHAN (EX BUSS HEAD IN UNIFIL LEBANON) (46 Points)
21 July 2025AS A NRI, I AM EARNING INTEREST ON USD AND JPY FCNR DEPOSITS , HOW TO SHOW IN ITR2 IN EXEMPT INCOME. SHOULD I CONVERT THE INTEREST AMOUNT IN INR AT THE CLOSING RBI RATES AS ON 31ST MAR 2025.
PLS GUIDE
Rama chary Rachakonda
(Master in Accounts & high court Advocate)
(8656 Points)
Replied 21 July 2025
FSNR deposits are a type of NRE (Non-Resident External) account, and the interest earned on them is exempt from Indian income tax under Section 10(4)(ii) of the Income - tax Act, 1961.
As per the Income-tax Rules, NRIs are required to report their exempt income in the ITR form, but it is not sbject to tax.
To report the interest earned on FCNR deposits in ITR2, the individual should convert the interest amount to INR using the average annual exchange rate or the exchange rate on the date of receipt, as per the RBI guidelines.
2.Report the interest income in the "Exempt Income" section of the ITR2 form.
3.Ensure that the interest income is not included in the total taxable income.
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