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80TTA For NRI

Renu (Student) (460 Points)

11 May 2022

If NRI receives SB interest from NRO account, can he claim deduction under sec 80TTA?

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11 Replies

Samantha J (1236 Points)
Replied 11 May 2022

NO. As in most cases foreign currency is held in NRO

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sabyasachi mukherjee (27650 Points)
Replied 11 May 2022

Nri cannot claim 80tta deduction. Sec 80TTA IS NOT APPLICABLE FOR NRI.

1 Like

Renu (Student) (460 Points)
Replied 11 May 2022

In this they have told that they can claim Deduction under sec 80tta

JJJ (Need help) (675 Points)
Replied 11 May 2022

Originally posted by : Samantha J
	NO. As in most cases foreign currency is held in NRO

NRO is specifically for rupee holdings and domestic transactions.

CA SAGAR BASU (Chartered Accountant) (35 Points)
Replied 11 May 2022

Yes in my view, you can claim deduction under 80 TTA for interest on NRO account. There are basic difference between NRE and NRO account. In NRE account, you can send forex directly or you can keep forex. But in NRO it is not possible. So it is similar to ordinary saving account maintained by Non resident.

Also in 80 TTA , no where it has been maintained that it is applicable only for resident. So in my view you can claim it.

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Samantha J (1236 Points)
Replied 12 May 2022

All of you please note NRO account can hold foreign currency. You can also have income originating in India in NRO account.
For savings bank interest in NRO for income from India 80tta is allowed. hope this puts clarity in views.
in case you converted dollars earned in US into rs in nro you will have to calculate saving interest in this case and on this you can't claim 80tta

CA SAGAR BASU (Chartered Accountant) (35 Points)
Replied 12 May 2022

Both NRE and NRO account should be maintained in Indian rupees only.

But from NRE A/c you can repatriate the money any where freely, but From NRO account you cannot transfer money NRE a/c or outside India easily

As the interest generated in India with the NRO account balance , so I don't think there is any reasonable ground to deny deduction u/s 80TTA

Samantha J (1236 Points)
Replied 12 May 2022

Some CA 's need to visit bank ! What someone is saying that one cannot hold foreign currency if he is out of India and is NRI!

CA SAGAR BASU (Chartered Accountant) (35 Points)
Replied 12 May 2022

I have all the accounts. So please check it properly from Bank.

For holding foreign currency you need to open FCNR account

All NRO & NRE account are INR dominated account, so all the money receive in foreign currency, you need to convert it in INR. You cannot maintain it in foreign currency.

Hope it is clear

JJJ (Need help) (675 Points)
Replied 12 May 2022

Originally posted by : Samantha J
	Some CA 's need to visit bank ! What someone is saying that one cannot hold foreign currency if he is out of India and is NRI!

No that is not what anyone is saying.

Both NRO and NRE accounts are rupee denominated savings accounts for non-resident. Even if you deposit euro into them, there is a conversion into rupees at the time of deposit.

Non-rupee denominated accounts are a separate thing entirely. And a resident can have an account with a bank in India in several different currencies. These are typically for income / business / trade and are typically current accounts.