Latest Expert Exchange Queries
sitemapHome | Registration | Job Portal for CA's | Expert Exchange | Currency Converter | Post Matrimonial Ads | Post Property Ads
 
 
News shortcuts: From the Courts | News Headlines | VAT (Value Added Tax) | Service Tax | Sales Tax | Placements & Empanelment | Various Acts & Rules | Latest Circulars | New Forms | Forex | Auditing | Direct Tax | Customs and Excise | ICAI | Corporate Law | Markets | Students | General | Indirect Tax | Mergers and Acquisitions | Continuing Prof. Edu. | Budget Extravaganza | Transfer Pricing
 
 
 
 
Popular Search: ACCOUNTING STANDARDS :: VAT RATES :: ICAI offer Get Windows 7,Office 2010 in Rs.799 Taxes :: cpt :: form 3cd :: VAT Audit :: due date for vat payment :: articles on VAT and GST in India :: TAX RATES - GOODS TAXABLE @ 4% :: list of goods taxed at 4% :: TDS :: ACCOUNTING STANDARD :: empanelment :: Central Excise rule to resale the machines to a new company :: ARTICLES ON INPUT TAX CREDIT IN VAT
 
 
General »
 There will be no tax on farm or agriculture income
 RBI, Income Tax Acts to be amended for electoral bonds, Jaitley says
  Clarifications on the Taxation and Investment Regime for Pradhan Mantri Garib Kalyan Yojana, 2016
 I-T zeroes in on Mumbai trader in first crackdown after demonetisation
  Tax queries answered by Dilip Lakhani, Senior Chartered Accountant
 Income Tax Department Failed To Unearth Black Money Despite Information
 Govt filing twice as many cases as private cos in Supreme Court
 Taxes under GST 'to increase a bit', says CBEC Chairman
 Google Tax could soon make even downloading apps on your smartphone a costly affair!
 Chances for a tax audit have rarely been this low
 CBDT to make separate wing to probe benami, black money

No tax on foreign currency bank deposit interest for NRIs
April, 11th 2014

Interest earned on deposits held in foreign currency with a scheduled bank, by a non-resident or by a person who is not ordinarily resident (RNOR) is exempt from income tax according to the provisions of section 10 (15) of the Income-tax Act, 1961 (the Act).

The exemption would be available until you are non-resident or an RNOR under the Act. You will be an RNOR if you are a non-resident in nine out of the 10 previous years or your stay in India in the seven previous years preceding the current year does not exceed 729 days.

Typically, a returning NRI would qualify to be RNOR for two years; consequently, she will be eligible to claim exemption on the interest earned from deposits in foreign currency.

Once you are considered as being ordinarily resident for income tax purposes, your global income becomes taxable in India. Your earnings from deposits in India would be chargeable to tax as per the slab rates applicable to an individual.

I am an NRI, but I will be returning to India by June. Till when can I retain my foreign currency non-resident (FCNR) and non-resident external (NRE) accounts abroad? Is money in the accounts and interest earned on them taxable?

—Bhargav Mehta

Once you become a resident of India, your existing FCNR deposits could be continued till maturity at the contracted rate of interest. However, for all purposes other than interest, such deposits will be treated as resident deposits from the date of your return to India. On maturity, these accounts are to be converted into resident rupee deposit account or resident foreign currency (RFC) account.

NRE accounts should be re-designated as resident accounts or RFC immediately upon your return to India for taking up employment or for carrying business or vocation in India or for any other purpose indicating your intention to stay in India for an uncertain period.

As such the deposits held in these accounts are not taxable unless they are received in India. Interest earned on deposits held in foreign currency with a scheduled bank by you will be exempt from tax so far as you are a non-resident or an RNOR.

Further, interest earned by you on your NRE account balances in your status as a person resident outside for exchange control purposes, will be exempt from income tax in India.

 
 
Home | About Us | Terms and Conditions | Contact Us
Copyright 2017 CAinINDIA All Right Reserved.
Designed and Developed by Binarysoft Technologies Pvt. Ltd.
Desktop Application Development Outsourcing Desktop Application Development Offshore Desk

Transfer Pricing | International Taxation | Business Consulting | Corporate Compliance and Consulting | Assurance and Risk Advisory | Indirect Taxes | Direct Taxes | Transaction Advisory | Regular Compliance and Reporting | Tax Assessments | International Taxation Advisory | Capital Structuring | Withholding tax advisory | Expatriate Tax Reporting | Litigation | Badges | Club Badges | Seals | Military Insignias | Emblems | Family Crest | Software Development India | Software Development Company | SEO Company | Web Application Development | MLM Software | MLM Solutions