Need Tally
for Clients?

Contact Us! Here

  Tally Auditor

License (Renewal)
  Tally Gold

License Renewal

  Tally Silver

License Renewal
  Tally Silver

New Licence
  Tally Gold

New Licence
 
Open DEMAT Account with in 24 Hrs and start investing now!
General »
Open DEMAT Account in 24 hrs
 Don't fall for fake notices! How to verify your income tax communication
 I decided to shift to the new tax regime. Will I lose benefit on interest income of my PPF account?
 Income Tax Return: How to prepare for hassle-free tax compliance? Here is a 10-point checklist
 Filing ITR On Your Own? Salaried Taxpayers Need To Know These Things
 New vs Old Tax Regime: How is one taxed under the New Regime and how to make a switch between the two regimes?
 New tax regime vs old tax regime: What's point at which tax outgo is the same in both regimes? Check salary and deduction levels
 Advance Tax Paid, Do You Still Need To File ITR? Check Details Here
 Centre seen to have met FY24 gross tax target
 6 income tax rules that salaried should know as financial year 2024-25 starts from today
 How to calculate income tax on stock market gains along with your salary?
 Moonlighting for Additional Income? Know Its Tax Implications

Interest earned from NRE account is exempt from tax
December, 04th 2015

Any non-resident Indian (NRI) can open an NRE account with funds remitted to India through a bank abroad. The funds held in the NRE account are freely repatriable. Interest earned out of balances in NRE account is exempt from tax.

In your case, on maturity of the PSU bonds, you would receive the principal and the interest amount. As per the Indian income tax laws, if the interest income received by you is from bonds notified by the central government, then it would be exempt from tax, provided the conditions, if any, stated by the government are satisfied.

But if these are not notified bonds, interest income will be taxable. In case interest income is taxable, you will be able to repatriate the interest amount only if appropriate income tax has been deposited.

It is recommended to check the type of PSU bonds to determine the taxability of the interest income.

I want to send around $20,000 to my parents in India this year. Do I need to pay tax? Also, what is maximum tax-free amount one can send to India?

There is no gift tax in India under the present Income-tax laws. However, under the income tax laws, gift comprising a sum of money exceeding Rs.50,000 is considered as income in the hands of the recipient. The income is liable to tax as “income from other sources”. If such a gift is received from relatives or on special occasions (like marriage or under a Will), it would be exempt from income tax.

Relatives for this purpose include lineal ascendants and descendants, and, hence, the gift received by your parents from you will not be considered as taxable in their hands. Also, as the gift received by your parents is not taxable, there is no maximum tax-free limit that you can remit as gift.

However, the income tax officer might request for the source of the funds that your parents receive, and may also seek credibility or evidence of capacity of the donor of the gift. The officer could call for your tax returns and/or other documents to assess the genuineness of the gift.

It would be advisable to have in place a gift deed and other remittance documents to answer any questions later.

Home | About Us | Terms and Conditions | Contact Us
Copyright 2024 CAinINDIA All Right Reserved.
Designed and Developed by Ritz Consulting