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Is Interest received on NRE term deposit is taxable or non taxable

26 May 2021

Dear Sir/ Madam

Is Interest received on NRE term deposit is taxable or non taxable. Received message for e compliance on high value transactions and the interest income was not shown in other income ITR AY 20. 21. Information requested for filing revised return. Can I show interest as exempt income sec 10(4) ii.

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4 Replies

CA. Sourav Sarkar (Chartered Accountant ) (24578 Points)
Replied 26 May 2021

The interest on NRE FD (Fixed Deposit) and/ or NRE savings account is not taxable as per the provisions of Section 10(4) of the Income Tax Act 1961.

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veerendar singh (tax consultant) (3301 Points)
Replied 26 May 2021

It is an exempt income.

just give a reply in e compliance that it was an exempt income.

Sivaramaraju G (Learner) (2398 Points)
Replied 26 May 2021

Yes, it is an exempted income as per sec 10(4)(ii) for non residents. even though it is exempted we have to show in return. hence it would be better to revise the return. we have time till 31.05.2021.

veerendar singh (tax consultant) (3301 Points)
Replied 26 May 2021

Ramaraju likes to be on the safer side.
not reporting exempt income does not have any tax effect but you may still revise the return if you feel so.
taking ramaraju's advise might free you from anxiety and fear of getting scrutiny notice for not reporting exempt income.