You can claim exemption for the FD interest of the period of NRE
Tax on interest on NRE FD when converted to Resident FD
I had opened an NRE FD of Rs. 5,00,000/- in the bank in the month of July, 2016. My status changed to resident in Dec., 2016. Bank converted my NRE FD into resident FD and changed the principal amount to Rs. 5,09,420/- (5,00,000/- plus the interest earned upto quarter ending Sept., 2016 approx. 9420/-). For subsequent months TDS @ 10% has been deducted from the interest on the FD. My question is whether the interest earned upto Sept., 2016 on NRE FD (Rs. 9420/-) and merged with the principal amount is taxable or not.
Asked 7 years ago in Income Tax
Hi,
Interest amount of INR? 9420 in your case will not be taxable. Even the interest earned from September to December will also not be taxable.
Thereapart, interest on NRE FD will not be taxable as long as you hold the status of resident but not ordinary resident( RNOR).
Please feel free to call in case you want any details on your residential status.
Kind regards,
Abhishek Dugar
CA CS B.Com
Hello Sir,
The Interest earned when you were an NRI and the money was there in an NRE account, will not be taxable.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hello,
The interest earned of Rs.9420/- is not taxable.
Regards
CA Keerthiga Padmanabhan
M.Com., CA, LLB
I have also saving bank interest income upto Dec.2016 on my NRE account, in that case will the interest income earned on NRE account before conversion to resident account will also not be taxable? Thanks, Aseem Kumar Vohra
Asked 7 years ago
No, it will be exempt
Hello Sir,
Any interest earned on your NRE is not taxable. Income earned from any bank account other than NRE will be taxed.
Trust this clarifies your query.
Feel free to call / get back in case of further clarifications.
Thanking You.
Regards,
Rohit R Sharma
BCOM, ACA, LLB-GEN, CERT. FAFP
Hi,
Yes, you are correct. It will not be taxable.
Please feel free to call in case you want any further clarifications.
Kind regards,
Abhishek Dugar
CA CS B.Com
Any income arising out of the NRE account is exempt from tax.
Regards,
Keerthiga Padmanabhan
M.Com., CA, LLB
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