Interest on NRE account is exempt u/s 10(14) for non-resident but in your case status of Assess is resident for current year than it will be taxable.
Dear Gautham
Interest earned from NRE deposits account shall be exempted from tax u/s. 10(4)(ii) and exemption shall be available untill NRI/PIO becomes person resident in India (Section 2(v) of FEMA).
As per said section, when an NRI/PIO return to India for good, he needs to re-designate his non resident account to resident accounts i.e. NRE to either Resident Foreign Currency or Resident Saving Account, and so shall be considered as Resident for FEMA.
So, technically speaking, Interest earned from NRE Account shall be exempted irrespective of his Residential Status as per Income Tax.
Regards
Juzer
Fantastic answer given by the expert Mr. Juzer.
Technically, NRE A/c has to be closed. Till its closure interest is exempt.
One more thing ....
NRI's Returning India after a long time say, 9 years or more enjoys status of Not Oridnarily Resident upto 2 more years of their return.
Thank You Dear All..,
Giving such usefull information.
CHANDRU G
Hello Masters
good discussions going on!!!
NRE interest is non taxable till NRI status continues well.
My question is
It is mandatory to show earned interest through NRE acct in exempt income while filing return by NRI?
Or not necessary?
BR
Deo
I have been clarified by Bank, that returning NRIs have to declare their residency, within 6 months. And during this period all NRE accounts have to be changed to RFC or Resident local account. Tax will be collected at par with Residents.
FCNR and NRE deposits wil be changed to Resident on maturity. But Tax payable, from the date of becoming Resident.
Now wish to read some rules black and white.
Requires input from all learned
one of my client has income from nre account as he is nri still now and under what section this income is except and whether full income is expect or part
thank you friends
CAclubindia
