Confusion regarding nre deposit

This query is : Resolved

Querist : Anonymous

Querist : Anonymous (Querist)

27 July 2016 SIR,

An NRI wants to make an NRE Deposit - which is Tax-Free.
He has a simple-regular Savings bank account, which was opened before he went abroad and before he got NRI status. He has enough balance fund in it.

He does not have any NRE or NRO A/c.

QUE : 1 Can he open an NRE Deposit by giving cheque of his simple Savings A/c ?

QUE : 2 Will this NRE Deposit, be treated as Tax- free ?
(Because, it is made from fund of a simple-resident –regular bank account, not from fund of an NRE A/c.)

QUE: 3 Will any TDS be deducted from this NRE Deposit ?

QUE : 4 Will he have to submit Form 15-G or H , for non-deduction of TDS ?
If yes, then how is it possible to give this form for him? Because, he is currently Non-resident. And form 15-G or H can be filled only by residents.

Please, help.
Thanks.

Amol S Joglekar

Amol S Joglekar (Expert)
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27 July 2016 01. No.Not required. He can open zero balance NRE account.
02. The credit in NRE account is allowed only in Convertible Foreign Currency
03. NRE deposits are subjet to TDS
04. 15 G or 15 H is not applicable for NRE account