12 November 2012
My client gets income from abroad every year he is always been NRI but last year he had some income from abroad but he was resident , So income shown in NRO or NRE a/c should be taxed or not ?
14 November 2012
Dear sir , As per RBI GUIDELINES , Accrued interest income and balances held in NRE accounts are exempt from Income tax and Wealth tax, respectively.SO IT IS BETTER TO KEEP IN THE NRE ACCOUNT INSTEAD OF NRO ACCOUNT FROM THE TAX POINT OF VIEW .....
The interest earned on any type of NRO bank as well as the credit balances in this kind of account are taxed under the account holder’s tax bracket. On the other hand, interest earned on the NRE account is totally exempted from income tax, and the credit balances in the account don’t attract any wealth tax. Any gift given to a close relative doesn’t attract gift tax.
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