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Tds rate in case of transfer of fund from nro a/c to nre a/c

TDS 1483 views 1 replies

Navdeep

prop.

36 Points Joined April 2012

dear sir/madam,

kindly suggest me the amout of TDS to be deducted in cse of transfer of funds from NRO A/C to NRE A/C where the transferor is a NRI and citizen of U.K. Assessee has made Fixed deposits in the NRO account in India and now he want to trasfer such funds to the NRE account opened in India itself.

is TDS will be applicable to him and if yes, the rate of TDS. is there any tax releif to the assessee under DTAA between UK and INDIA. the assessee has also PAN issued in his name.

thanks in advance..

Replies (1)

CA Deepak Garg

Consulting

95 Points Joined December 2009

Hello Navdeep,

It's easy to transfer fund from an NRE to NRO account. But it's not possible to transfer fund from NRO to NRE account. Once you transfer fund from an NRE to NRO account, the amount is non repatriable. Consequently, you cannot transfer it back.

The interest earned on any type of NRO bank as well as the credit balance in this kind of account are taxed under the account holder's tax bracket. On the other hand, interest earned on the NRE account is totally exempted from income tax, and the credit balances in the account don't attract any wealth tax. any gift given to a close relative doesn't attract gift tax.

Regards,

Deepak Garg