Kapil Taparia (Job) (49 Points)
07 March 2013I am NRI and living at Dubai. I have NRO account and earned interest income. Tds deducted under sec 195 @ 12.5 % (because of DTAA) agreement on interest income. is interest income should be taxable under income tax act or not ?
Please advice how to not make tax on NRO interest income and reason also ?
CA Sneha Jalan
(CA FINAL)
(73 Points)
Replied 07 March 2013
Dear Kapil
If uwould be a ordinary resident then u can claim the TDS deducted under DTAA as per sec. 90...bt since u r a NRI...u r not liable to file the return and ur income vll nt be taxable in INDIA......
THANX & REGARDS,
SNEHA JALAN
CA. CS. Khushboo Dodhia Vora
(Practicing Charatered Accountant)
(125 Points)
Replied 08 March 2013
Dear Kapil,
You have earned NRO Interest Income and TDS has been deducted @ 12.5%.
Irrespective at what rate the TDS is deducted, your NRO Interest would be finally taxable @ 12.5% (DTAA) or 30.9% (as per Income tax act) whichever is beneficial to you.
If your total income including NRO Interest is less than Rs.200000 for F.Y. 2012-2013, then upto Rs. 200000 there would be no tax for you.
For Eg:
NRO Int = 300000
TDS @ 12.5% =37500
your final Tax liability = (300000-200000)*10.3% = 10300
By filing return of income for that particular year, you may get the refund of (37500-10300) =27200
In case you have any further doubts do write to me
Khushboo
khushboojdodhia @ gmail.com
+91 9920433087
CAclubindia
