One of my clients in NRI and has NRO and NRE accounts in India. While her case for tax return filing comes to me now, I notice that she received heavy amounts in her NRO account (approximately Rs. 60 Lakh) of which, she transferred Rs. 35 Lakh (in different lots) to her NRE account during the year. She has paid absolutely no tax - neither on receipts in NRO account nor at the time of transfer to NRE account as is clear from her form 26AS and AIS/ TIS which make no mention of any such receipts or any such transfer to NRE account.
My queries are as follows.
1. Can a bank allow transfer of funds from NRO to NRE account without payment of tax or without a CA certificate in form 15CB as I understand there was no such certificate given by any CA for these transfers?
2. If it turns out that receipts to her NRO account were capital in nature and non-taxable, should I still insist her to pay tax before filing return just because she transferred funds from NRO to NRE account?
CAclubindia
