08 August 2018
Sir, One of my Friend's uncle was in Abroad for more than 20 years.In his NRI account, more than Rs.1.5 crore is credited. Now he would like to return from abroad and stay in India. As his status will change as NRO from NRI, What are his tax implications? How he can save tax liability arising out of these huge credit in Bank account? What are the better investment ways to reduce tax liability in the succeeding year of his stay in India?
Here as RNOR , India Tax liabilities are same on you as Resident Indian( RI) if you keep this money as it is in NRE A/c or NRO a/c.
After return to India , you cannot keep continuing NRE / NRO account and within 6 months declare ur status and your account will change to ordinary saving a/c unless you opt for RFC a/c opening . And all NRE FD / saving account bal. will be continue on same terms and condition similar to RI if u don't change or cancel these deposits etc.
But with RNOR status you can opt. for RFC account opening after return to India. And this 1.5 Cr can be converted to Foreign exchange ( but not NRE type deposits ) and u can keep it as FCNR etc. and enjoy zero tax liability for 2 years of RNOR. after that all interest earning are taxable similar to Resident Indian
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