Is interest on FD held in NRE account taxable for Resident but not ordinary resident (RNOR)in India?
The bank said that he can keep the FDs in NRE account till maturity even after he moved to India. Please guide me about the taxability of this interest income. Bank is not deducting any TDS.
Thanks
In reality the interest income in NREFD is treated as resident deposits frim the date of the NRI comes to india permanently.
Bank would not deduct tds as it is NREFD as practice followed
Hello Shalini. Interest Income from NRE account is tax free upto the assessee is non-resident. Now definition of non-resident is different as per Income Tax Act and as per FEMA. When person permanently shifted to India, he became resident. and as per Income Tax Act, his stay in India should be calculated. It is the duty of the assessee to declare himself as Resident once he permanently shifted to India to Banks and convert his NRE account to normal bank account. But if he fails to do so than also looking to the fact you should treat interest income as taxable income.
Banks are not deducting TDS because of NREFD but it does not mean interest is tax free. Interest income must have been considered while calculating total income once status of Assessee changed to Resident.
Can a person as RNOR in a financial year hold on to NRE Account as he is temporarily been in India and went back abroad after spending 7 months in India.
CAclubindia
