• Tax on NRE deposit interest earned, when in India

Hi all,

I am a foreign passport and India OCI card holder. I have deposits in my NRE account, the interest earned on which is tax free in India.

My question is: If I move to India for 2-3 years for employment, what would be the treatment of interest earned on NRE deposits in India? Would I be paying tax only on my salary income or everything, including NRE deposits income? 

Thanks for your valuable answer,

Asked 3 years ago in Income Tax from Haryana, Haryana
The interest on NRE deposits will be exempt but can you continue to hold NRE deposits, if you are no longer a NRI?
B Vijaya Kumar
CA, Hyderabad
845 Answers
48 Consultations

5.0 on 5.0

If you are moving to India for certain number of days that is for specific purpose then you continue to be a non-resident under FEMA and hence interest on NRE deposit continue to be exempt under Income Tax Act.
Vijay N. Kale
CA, Hyderabad
248 Answers
12 Consultations

4.9 on 5.0

If you move to India for taking up an employment , you may loose your non resident status  depending upon your stay in India .  Thus you may become a resident in India .
In this case , the NRE account can be converted into a RFC account . During the period , when you are the resident , your global income is taxable in India .
Interest on the NRE account will not taxable in India as long as you are Non resident . Once you become resident , the interest of that particular year will be taxable in India .
Prakash Sinha
CA, New Delhi Area, India
120 Answers
16 Consultations

4.9 on 5.0

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