TDS on payment to NR

This query is : Resolved

Nupur Sharma (Querist)
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11 July 2009 A Client of ours(a US Resident) is concerned about the possibility of collapse in the value of US Dollar, so he wants to convert about $200000 into Indian rupees. for this purpose he contacted SBI Branch there to inquire about the FDs they offer for money converted to Indian Rupees. They are offering an interest rate of 8% for a 8-10 year FD and the client will have to pay 15% tax at source on this. The bank says that once the interest income is repatriated to US, the client will have to pay taxes as per US Code.
The client wants to know that what will be the actual tax at source?? and if he does not repatriate the funds back to the US, how much tax will he be liable for then? will he be taxed again on the maturity of the FD?
What monthly income should he expect in net from this FD??
Please help

vinod kumar lalwani

vinod kumar lalwani (Expert)
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11 July 2009 Hello!

As per section 9 of It act 1961
if property from which income arises is situate in india then income accrue or arise in india will be taxable in hands of assessee irrespective of his residential status in india.

TDS rate is 20% on amount of interest as per schedule 1st of finance act 2008 part 2nd.

thanks.