Why Financial Planning?

Planning is bringing the future into the present so that you can do something about it NOW.

One of the most common questions that I get from NRI is – what will happen to my NRE FD after return to India?

This question is on top of his mind because most NRIs locked their savings in long-term NRE fixed deposits & they are giving high interest which is tax-free in India.

You can also get RNOR Guide from this post – important in the case of NRE fixed deposit.

NRE FD after return to India
Status of NRE FD after return to India – Good & Bad News

Must Read – Why NRIs Returning to India?

NRE Fixed Deposit

As an NRI, you can invest your money in fixed deposits in NRO, Non-Resident External, and/or FCNR accounts. The interest rate on these accounts may be different from the interest rate on resident FDs. Here is a comparison of interest rates on Non-resident FDs of some banks –

Type of FD in Bank

(Sum less than  Rs. 5 crores)

NRE Fixed deposit Rate or NRO FDs Interest Rate on  FCNR FDs (US Dollars)
1 year FD in ICICI Bank 3.75% per annum 0.50% per annum
1 year FD in HDFC Bank 3.75% per annum 0.01% per annum
1 year FD in SBI 3% per annum 0.70% per annum

Check – NRE Vs NRO Accounts – Everything You Must Know

It is good to park money in NRE or FCNR fixed deposits –

  • Interest earned on NRE FD tax-free in India. (can be taxed in the country of residency)
  • The movement of funds is easy.
  • FCNR accounts are protected from exchange risk.
  • Many banks provide loans against FCNR deposits.
  • They can be continued in the same state till maturity whether you return to India or not during the FD tenure.
  • An NRE fixed deposit can’t be open in joint name with an Indian resident, even if that person is a direct family member.
  • There is a repatriation option on investment through Non-Resident External Account.

Must Read- Renew the Indian Passport

NRO FDs are not lucrative as –

  • Interest is taxable.
  • There is no repatriation option on the principal investment or it’s tough.
  • Funds that have been originated in India or funds from an NRE account can only be used to open an NRO FD. NRE FD and FCNR FDs can be opened with funds received abroad as well.

As an NRI, you can make use of NRO FD for investing money that you have earned in India and/or if you want to open a joint account with an Indian citizen.

Go for an NRE fixed deposit if you want to mainly park funds from foreign countries and want the money to be fully repatriable.

NRE Fixed Deposit
What happens to NRE FD after NRI Return to india

Read – Best Investment for NRI in India

NRE FD after return to India

Let us look at the status of these fixed deposit accounts and the taxation rules related to them when an NRI returns to home base i.e. India and becomes a resident of India –

  • These deposits can remain as-is until maturity when an NRI returns to India and become a resident Indian. They need not be converted to resident accounts.
  • Withdrawals from both these accounts can be done only in Indian Rupees.
  • If we break NRE Fixed deposit before maturity then interest is calculated only for the duration deposit remained with the bank.
  • Prematurely breaking of NRE FD attracts penalty which varies from bank to bank.
  • Non-Resident External and FCNR fixed deposit accounts can be converted to Resident Foreign Currency (RFC) accounts after maturity. The currencies allowed for RFC accounts are freely convertible currencies such as the US dollar, Euro, British Pound, and Japanese Yen.
  • NRO fixed deposit accounts have to be converted to resident accounts.
  • The interest rate will be payable at the original rate if the deposit is held for the full term even after conversion into a resident foreign currency account.
  • Interest income from NRE A/c or FD that have been converted to RFC accounts will be exempt from tax if the status of the returning NRI is ‘Resident but not ordinarily resident’ also known as RNOR. A person is considered as an RNOR if the following conditions are satisfied –
  1. The person has stayed abroad for 9 years in the previous 10 years

  2. During the 7 financial years preceding the year the person returned to India, he/she has stayed in India for a period of 729 days or less.

    • A person usually has the RNOR status for around 2-3 years. If the status is ‘Resident’, the interest is taxable.  Interest income from an NRO account is taxable in India whatever the residency status be. If the interest is taxable, then it has to be considered in the income source – ‘Income from other sources’ while filing tax returns.
    • After returning to India you become a resident Indian and your global income becomes taxable in India. Of course, Double Taxation Avoidance Agreement ( DTAA) may be availed if the oversees is also getting taxed locally, so to plan your stay in India try to maintain RNOR status for the maximum possible time.
  • In such a scenario except for some income, the rest of your foreign income will remain exempt from tax.
  • The NRI has the responsibility to inform the bank on a change of residency status so that the bank can take the necessary steps on the accounts held by the NRI. On becoming a resident the onus is on you to notify the bank of the change in the status.
  • The amount in the RFC account can be used for remittances abroad and investments abroad.
  • If you decided to go abroad again for the long term you can either remit the RFC balance abroad or transfer the fund from your RFC into a Non-Resident External or FCNR account.

Immediately on return to India, NRIs should inform their bank to designate their accounts as domestic Resident accounts or transfer the balance in their NRE/FCNR accounts to Resident Foreign Currency (RFC) accounts, if so desired; FCNR accounts can be continued till the date of maturity and upon maturity, can be converted to RFC accounts. wiseNRI

Few more points:

  • NRI after becoming a resident in India can also create a separate tax profile like HUF and take a separate tax exemption limit to HUF.
  • There is also NRO– Five years tax saver Fixed Deposit that will be eligible deduction under Section 80C of Income Tax Act, 1961. This also provides NRIs an opportunity to diversify their investments in addition to other investments permitted in Section 80C. The maximum amount to be invested in this should not be higher than INR 150000 in a financial year. No Overdraft or pledge allowed in the NRO – Five years tax saver Fixed Deposit.
  • In Five years NRO Tax Saver Fixed Deposit there is monthly and quarterly payout option is available but there is no partial and premature withdrawal is allowed.

As an NRI, let us know your experience if you ever asked your banker – NRE FD can continue after return to India? Please share their response in the comment section. If you have any additional or updated information – must share that will really help every NRI.

NRE FD after return to India
Published on November 26, 2018

Hemant Beniwal


Hemant Beniwal is a CERTIFIED FINANCIAL PLANNER and his Company Ark Primary Advisors Pvt Ltd is registered as an Investment Adviser with SEBI. Hemant is also a member of the Financial Planning Association, U.S.A and registered as a life planner with Kinder Institute of Life Planning, U.S.A. He started his Financial Planning Practice in 2009 & is among the first generation of financial planners in India. He also authored Bestseller book "Financial Life Planning". 

  • Hi,
    I hold NRE savings and FD accounts with HDFC bank, tenure of FD is 4years, at present 2 and half is completed.I want to know once my stauts is changed to Resident, whatever interest I earned on FD on maturity is taxable/only proportionate interest earned since my stauts chaged to till maturity period is taxable.
    Thank you.

  • I am UK citizen. I have Mutual Funds Investments in India.They have my PAN card number, but I am getting message that PAN has be linked to Aadhar card.What should be my response.

  • I am NRE holder for the past 7 years from July 2012 to Nov 2019. I returned India End of Nov 2019. I coudnt go back to Overseas Countries because of Covid. Iam staying in India still now. I have some NRE FD. my Interset income on term deposit is 215000 Rs Annum. Do I need to File Tax return.

  • Hi,
    I hold NRE savings and FD accounts with HDFC bank. After returning to India I visited the bank to change my NRE account to domestic.
    Bank told me that FD account also has to be closed prematurely with NRE account and no interest will be paid on FD.
    Could you advice if there any clause to defend bank to keep FD account open till maturity?
    Thank you.

    • Hii Sujit Ji
      As per my knowledge Non-Resident External and FCNR fixed deposit accounts can be converted to Resident Foreign Currency (RFC) accounts after maturity.

    • Hii Mr. Vinod
      As per my knowledge, interest income earned from your FCNR deposits shall be exempt from tax till you hold Non-resident Indian status or Resident and Not Ordinarily Resident (RNOR) status as per the provisions of Income Tax Act, 1961.
      It is suitable to take advice from a tax consultant.

      • Thanks for the reply
        Will the principal amount taxed after maturity, and in which account the principal amount will be transferred?

      • Further to your reply, after status change from NRI to Resident, interest on the NRE FD for the whole FY will be taxable or only the interest from the date of return to India will be taxed..?

  • I have NRE FD in federal bank and sbi and it was for eight to ten years with 7 to 7.5% interest and if I return to India next will I need to break the fd and convert to residents fd or it can be continued at the same interest rate till maturity

  • I have NRE FD deposits. Once I’m back to India & closing the NRE account, what happens to FD deposits. Still will it continue? if so, on maturity where the amount will be transferred? Do I have to give Indian Saving account details?

    • Hi Dinesh,
      You can continue your NRE FD till maturity and once you come back to India, you should inform your bank regarding residency status.

  • I need to know something I have been in an overseas job and was having an NRE account. Now, my job is over and I am back to India. My question is, for how long can I keep my NRE account as it is?

    • Hi Srikant

      As per law, you need to change it as soon as possible and there is no prescribed timeline attached with that.

  • I hold senior citizen saving deposits in post office and banks.when I generated the deposit I was a resident of India. But now I had to declare myself as NRI as I am stuck in Australia because of movie for the past 15 months. Now my question is will the interest I am getting will remain the same till deposit reaches maturity date?

    • Hi Venkata

      As per my knowledge, the interest will remain the same and will continue till maturity but you can’t extend the same.

  • i have some equity share holding, which i purchased long before become nri, but after that no transaction on that demat. some small dividend comes from that. please let me know if it is required to declare in ITR?

  • I have worked in GCC for 10 years..so if i move and work in india for 2 or 3 years do my Fixed deposits in NRE ACCOUNT will be taxable? if yes then again if i move back whther the same fixed deposit can be converted back to NRE Fixed deposit eithout much cost implications?

  • i was outside India for 3 years and returned 1 month back. i have FDs in INR in NRE account. How to go about it ?

      • How to you manage the taxes to be paid on NRE FD once you return to India if you hold them till maturity?
        Do you ask bank for interest certificate and include that in your taxable income?

  • I am an OCI having NRE FDs in India. If I return to India, how long can I retain the FDs in NRE status? or do I have to convert to a Resident account? I am a foreign national having OCI status.

  • What will happen to my existing FD if I change my status to a normal from NRIWhat will happen to my existing FD if I change my status to a normal from NRI

    What will happen to my existing FD if I change my status to a normal from NRI

  • If after returning to India, he has not informed immediately, but after two years he is telling, he is in India for two years,then what Bank generally do?

  • I have 5-acre agricultural land and want to buy a path for that land at present I am an Australian citizen what I have to do.

  • Nre returns to India for good. His FCNR can be retained as FCNR for how long. is it compulsory for it to be converted to resident account on maturity.

  • I used to live in India and left India in the year 2009. I forgot to change my bank account from a resident account to a non-resident account.

      • Is there a penalty for holding on to this account for so long? And, I would like to convert the funds into US dollars. What account will help in facilitating this? Appreciate your help!

  • I was abroad from Jan 2009 to Aug 2019. Three times came to India for around 1-month duration each during this period. Recently came to India 31st Aug 2019 evening. All my income from abroad was kept in NRE A/c and NRE FD ( in INR). Kindly advise taxation on interests for NRE Ac. From which date income tax will be paid as resident Indian?

  • I was abroad from Jan 2009 to Aug 2019. Three times came to India for around 1-month duration each during this period. Recently came to India on 31st Aug, 2019 evening. All my income from abroad kept in NRE A/c and NRE FD ( in INR). Kindly advise on taxation on interests for NRE Ac. From which date income tax will be paid as resident Indian? Regards

    • Hi Debasis Das,
      As when the status changes from NRI to Resident. Income earned from the NRE Ac will be taxable.

  • Thanks a lot for your article. It is an area of great confusion with banks. I wanted to confirm if I understood it correctly – I had opened long term NRE FD’s when I was overseas. If I understood correctly all these FD’s remain tax-free till the maturity date of 5yrs/10yrs even if I have returned to India after 4yrs and am employed in India?

    • Dear NA,
      As per my knowledge,
      After the status changes NRI to RI, the FD will be taxable for the maturity value.

      • FD will be taxable for the maturity amount means ?
        That if it was 5years FD and I was overseas for 4years- they will still charge taxes on entire interest at time of maturity after 5years?
        Or only for the 5th year when I was resident Indian?

  • I returned to India last July 20 end after 5 yrs work outside. NRE FD interest will be taxable from the date of the return or for the whole FY 20-21.

  • After near 5 year job abroad, i returned to India by end July 20, for the FY 20-21(AY 21-22), my status ROR. Bank informed that my NRE FDs can continue as such till maturity, they have no such provision to designate as Resident FDs. They can close NRE FDs and rebook as resident FDs , which will cause loss of interest etc. the only option therefore is to just continue NRE FDs and pay tax on interest earned.
    1. Kindly advice whether this is permissible or not..?
    2. Please also clarify whether interest on NRE FDs for the whole FY 20-21 would be taxable or
    I need to pay tax only on interest earned from the date of return to India ie ( July end),
    Appreciate your advice

    • Hi Ramachandra,
      As per my knowledge,
      1- You can continue your FDs till maturity.
      2- Interest earned on the FDs will be taxable.

      • Hi Shreya,
        Thank you so much for the reply, truly appreciate.
        kindly also advise whether the NRE FD interest from the date of return to India or for the whole FY will be taxable.
        Best Regards

      • So it means you can hold your NRE FD till it’s maturity to get old interest rates, however the interest will be taxable from date of return to India ?
        Or will the interest be non-taxable till the FD maturity?
        Please confirm

  • I’m having NRE FD, once I return back to India ( lost NRI status). Will the FD amount ( principal amount ) taxable?

  • I am currently an NRI, holding FD. Soon will move back to India (FD will not be matured then). Will interest earned be taxable?

  • If somebody acquires RNOR status his NRE .will be converted to domestic but whether NRE FDs will continue as NRE FDs till maturity?

  • I become RNOR from 1 st April 2020 till 31 st march 2022
    When my NRE deposit mature within RNOR period , can i renew it as NRE deposit , becuase i still have tax benefit until 31 st march 2022

  • Hello,
    I need some guidance.
    I returned to India in December 2017. I have and NRE account with NRE FD valid till 2024. I receive interest on a monthly basis. Till now my income was much below the tax limit so I did not pay much attention however this FY 2020-2021 I made a lot of profit in stocks and crypto and I will be paying tax. Now I am wondering if I have to pay any tax on my NRE FD interest or I can let it continue till 2024. Kindly help me out with this please. Thank you.
    Abhinav.

    • Hi Abhinav

      If you are holding RNOR status you can hold it till maturity. Also you have to convert your account to RFC account then your NRE FD will be tax free.

  • I and my wife are Canadian citizens with OCI cards. At present we are stuck in India due to Covid 19. We will go back to Canada after the Covid situation is stabilized. After some time we are planning to return to India and spend only a few months in Canada each year. As we may stay over 180 days in India we have to pay tax here and we will pay as per Indian Tax rules for the interest earned on our NRE FDs. Please advise , What will be the status of our NRE deposits/Accounts after our return as a foreign Citizen with OCI card holder and staying over 180 days in India?

  • In your NRE FD article it was stated that “The interest rate will be payable at the original rate if the deposit is held for the full term even after conversion into a resident foreign currency account “As the Rupees interest rate on FD is usually more than RFC FD rates, does it mean that even after conversion to RFC one will get NRE rupees FD rate?

  • After NRI Returns and becomes RNOR whether interest on NRE deposits is exempt or not? as per SBI format, only FCNR and RFC are mentioned.

  • I have US Dollar deposits which I deposited in SBI when I was working in the Gulf. Now that I have returned to India about 6 years ago and retired and If I want to continue the hold the deposits in US Dollars – is it allowed?

  • Hemant
    Thanks for the very informative article.
    I propose to return to India, either in 2021 or 22; we are still evaluating.
    I have been asking my RM from different banks & while they say that the NRE deposits can continue till matui=rity, they have not been able to convincingly clarify whether it will be taxable or not while I am RNOR. I gather from your article that NRE & FCNR deposits will be non taxable. Which is the section(s) that cover this?
    Thanks
    Raphael
    PS: Ranandeb Sarkar’s reply below seems to contradict your article (if i have not mis-understood) Could you clarify?

  • Please tell me If I Have an Account in Union bank and make some FD for one year but unfortunately I need that money before one year. Can I break the FD or not?

  • Hello, would like to check if one of the friends after retirement has to return to India, they have sent their gratuity funds to NRE account, can they do fix deposits for what time period, kindly advise.

  • Sir, I have returned to India after 20years work in Gulf. I understand I am considered as RNOR for 3 years. How to proceed to RNOR category sir?

  • My and wife are NRIs from the UK. We are UK citizens with OCI Status. Spend 6 months each year in Bangalore. Have NRI accounts but no income in India. Should we have to file ITR?

  • I have nre fd with bank. Now i am resident indian. Bank says your nre fd will be converted to resident fd and tds will be deducted. Is it correct ?

    • Hi Meena,

      As per my Knowledge, you need not to convert your FD to resident FD, you can continue it till it’s maturity however the interest earned on it would be taxable.

  • I have an NRE joint account with my daughter. If I return to India, and my daughter continues to be NRI, will the account still be NRE?

    • Hi Ancy,

      If you are the first holder of account and you return to india then you have to convert this NRE account to Resident.

  • Is there any change in RBI rules regarding the continuity of NRE FDs after becoming a resident till the deposits gets matured? Because, today my bank (City Union Bank) said that the deposits can not continue after 15th November 2020. Please clarify.

    • Hi Ramakrishna,

      As per my Knowledge, there have no changes as such, a person can continue the FD till it’s maturity however when the person becomes resident the interest is taxable on that FD.

  • I stayed in US from April 2017 and returned to India only this year in Feb 18 2020, my questions are :1. What is my residential status for AY 2020-2021(FY 2019-2020) 2. What part of the interest from my NRE fixed deposit is taxable? I.e., do I need to pay tax for the interest earned between 1-apr-2019 to 31-mar-2020 or only the part of the interest earned after my return?

    • Hi Lalith,

      for the FY 2019-2020 you will be considered NRI. And you can hold your NRE FD till maturity.you don’t need to pay tax on this.

  • Hai sir

    Can u please clarify the below query?

    A) From Jan 2009 to 2019 April 9th I was abroad in a No Tax country.
    B) Last 07 years (2011-2019) I was approx 300 days in India on holidays in total.
    C) I came back to India for a short assignment on April 9, 2019, to join a job in the Indian company and worked till Nov 2019. ( IT was deducted on salary paid to me)
    D) I returned back abroad on Jan 1st, 2020 in the same financial year. (267 days stay in India in 2019)
    I have some NRE FD in Banks with Monthly Interest payout option,( interest was credited into NRE account only)

    Some FD have matured during the stay in India and the amount was credited into the NRE account
    1) Will I have to pay tax on interest earned on FD which matured during my stay in India.
    2) What about the tax to be paid for the same period of 267 days for FD which are not matured and still continuing with monthly interest payout.
    3) Will the 07 years (point B) give me tax exemption for all the interest earned on FD?
    4) All my NRE accounts are not converted as Banks advised not to if I am returning abroad in the same Financial year.(point D)

    Thanks in advance and appreciate the support

    • Hi Priya,

      as per my knowledge, it cannot be done, you will have to close the NRO FD and start a new NRE FD from an NRE account.

  • What will be the status of NRE FD if one loses a job and gets back to India and what will be the tax-free amount. Also, I m NRI for the last 22years.

  • My daughter returned to India and just now joined the yoga program for seven months.Is it necessary to redesignate her NRE account immediately or can we do it after seven months

    • Hi Shyam,
      As per my knowledge you are supposed to inform the bank about the change of residency status as soon as you return back to India.

  • I am an NRE currently…if I make an FD NRE today for 10 years on return to India permanently say after 5 years. What will be the staus of the NRE FD?

  • I am NRI since past 18 years working in the Middle East. Due to the Pandemic my company have given me a 5-6 months break to return to India and join back when situation improves. I have NRE fixed deposits with SBI. My overseas visa is valid until 2022. Do I need to change my NRI status for these 6 months and transfer NRE fds to ordinary taxable fds?

    • Hi Mohanan,

      As per my knowledge, After return to India NRE FD interest is not taxable till you are holding RNOR status. If you are having RNOR status then interest is not taxable till the time you can hold this status.

  • I am a RNOR, (Australian citizen), I have an NRE account jointly with my daughter living in London,hers is the first name with me and wife as joint account holder, is she liable to pay tax on interest earned?

  • Last year i cam to india Sep’2019 but due to covid i unable to return, I am searching jobs now in ME. How my investment here will be treated.

    • Hi Akashay,

      In my opinion, you need to inform the respective bank regarding your change of residential status after returning to India.

  • Hi,

    I am NRI living in Sweden since July 2015. My question is:

    In case I return back to India (permanently) anytime between April 2021 to Sept 2021, then my stay in India will be more than 182days for FY 21-22. In this case, should I be paying taxes in India for the earnings I made in Sweden between 1st April 2021 to the date I landed in India?

  • Hi,
    Is there a difference in taxation if i create 5 year NRI FD with quarterly payout or cumulative payout on maturity? Specially let’s say if I come back to India after 3 years. In case of quarterly the interest paid to me will be in past financial years but for cumulative I’ll be paid total amount at the end. So do i have to pay tax on whole 5 years interest in case of cumulative FD if my status is resident at that time?

  • I an an indian citizen returned back from uae 1 year ago. I have deposits in US dollars. Upon maturity how can i bring the money into India?

  • I am in UAE. I am planning to return to India next year October. I will be returning in October 2021 so that I will be less than 182 days in FY2021-22. I have NRE RD which will mature in 2024 September. When will I become resident? Is it required to premature break my NRE FD when I become resident?

  • Require Clarifications:
    After working abroad have retired and have no other plans to work further. But I have US B1 visa and plans to tour different parts of the world. My questions,
    1. Can I continue to maintain NRI status based on the prevailing definition of staying away for more than 182 days.
    2. Based on above my existing NRI bank accounts can be continued as NRI. If so, how can I submit my KYC documentation

    • Dear Hareesh,
      NRI definition of FEMA is different from Income Tax. We are not CA but my understanding is for your bank account & investment you will be NRI – for the tax you have to check your taxable income in India & 120 days may also apply.
      My suggestion is you should have a word with CA.

  • Hello Mr. Beniwal, I have recently asked my bank to change my status from NRI to Resident up on my return to India. I have few NRE FD’s in the bank which were opened @9.25%. I was promised by the bank employees that all the FD’s will remain as it is including the rate of interest. Most of the FD’s have been converted to same rate however, four of my FD’s with original rate of interest of 9.25 have been converted to 8.5%. Please let me know how can I get it sorted out?

  • Hi, Please let me know upon which Act/RBI/FEMA guideline you had come a conclusion that a NRE FD can continue till its maturity ? As per my understanding an NRI has to intimate his residential change to the banker, and the banker has to convert his NRE FDs to normal FDs. Please clarify with supporting regulation.

  • I am NRI and have fd of 3 years in my nri account. Should i create fd which pay quarterly interest in my savings account or cumulative? I want to know tax implications if i become resident indian before fd matuarity in both cases?

  • i have NRI deposit for 10 years and getting maturity by 2 years. But I am moving to india from GCC in September. Can I continue as NRE deposits?

      • Thanks. But the question is

        1. Will the FD continue as NRI deposit till the maturity even though I am not NRI

        2. Do I have to pay tax on Interest income earned for remaining per period.

        Thanks

  • i am planning to resign and come back to india by december. my leave salary and retirement money may credit to my indian account by february only. is that amount is taxable?

  • I want to know if i invest in FCNR account as fixed deposit for three years period with Indusind Bank will it be safe?

  • Suppose a NRI goes back to India and he has some fixed deposits which are going to be matured after 10 years. If the total interest earned from those deposits are subject to tax ? If yes then from which year onwards the income becomes taxable ?

    • Hi Sandeep,

      As per my knowledge, interest income will be exempt until the time you will be RNOR after that it will be taxed. RNOR status can be hold for 2-3 years.

    • Hi Sally,

      As per my knowledge, If you have any Indian income then you need to pay tax immediately after returning to India but for some foreign income, you may get relaxation till the time you hold RNOR status.

  • Hi Saeed here staying in Saudi Arabia I have opened account in HDFC NRE/NRO both with out Adhaar & PAN card now I am getting mails to provide it.., need your valued advice can I will be able to withdraw my money with out this both cards.. Regards

  • My Bank manager says” NRE FCNR FD will continue, but NRE Rupee FD will get converted as resident FD when you convert your NR account to resident account”

  • If a nri who has stayed abroad for 25+ years, returns to india but has FCNR deposit maturing 2 years hence. Then is the interest on FCNR deposit taxable ?

    • Dear Mr Deepak,

      He file as RNOR & can continue to enjoy tax free status of his FCNR for 3 financial year or maturity, whichever is earlier.

      Hope this clarifies.
      Thanks..!!

      Ranadeb

  • sir,
    i want to know one lady age 70 had dual citizen india & USA now last two or two&half years she is in india she can do NRE tax free fix deposit in india .

  • if nri having saving & fixed deposit a/c in the capacity of resident, only interest income is only below Rs.50,000/- filling ITR regularly as resident status. what to do in future filling for the A.Y.2020-21,Please reply.

  • I returned in India from UAE last year in June and still havent converted NRE FD into either RFC a/c or normal resident FD, as per the thought process i feel its better to withdraw NRE FD and invest in safe options and then notify the Bank to convert NRE savings a/c to a normal resident a/c…what do you suggest

    • Hi,
      Ideally, You are supposed to Inform your bank about your change of status immediately. I would suggest you do the same to avoid any penalties.

  • Hii I want to ask that if Indian person working in Dubai for the last 8 years and have nri account .. and that money he wants to do as a fixed deposit what will be the terms and conditions. That fd amount and interest earned is taxable? After maturity? If a person returns back to India.

    • Hey Dipika,
      Interest income will be tax-exempt in India if you qualify as a person resident outside India. You can continue them as it until maturity when you return in India.

  • I have US Dollars FD and I have returned to India 4 years ago. I want to maintain the FD in US Dollars. How can I do it? Please advice.

  • I have been an NRI for the past 20 years. I came back last March, ie March 2020. I have various NRE FDs and FCNR deposits. Do I have to convert the status of these FDs to RFC accounts? Will I be exempt from tax on the interest earned in these accounts during the next 2 years?

  • The Interest rates mentioned for FCNR USD accounts are that accurate? it is mentioned ICIC pays 3.66/annum on FCNR USD accounts

    • Hi Bala,
      I think you will get relevant information from the bank regarding this. As per my knowledge, a person who lives more than 180 days in India is not considered as an NRI.

  • Hello Hemant,
    I will return back to India after 15 years working in the gulf. Due to Covid I might return in October. As a NRI status I’ve fixed deposits in NRE account bank which gets matured next year or in 2022. Do i need to inform the bank immediately to change the status. Will my NRE account continue till 2022. Will I get Interest free on the deposits. Do i have to file for Income Tax next year. Or Do I have to change to any other status to save the taxes. Thanks in advance!

  • I am kumar .nre.singapore. i have sbi nre account. Nextmonth cancel my nre after i get some amount. Ex..500k.just transfer to account. After in india can i change to nre fd ? If cannot .any tax for 500k amount?

    • Hey Samuthiram,
      As you returned in India you are required to designate the NRE account as resident and the interest income earned on the same will be taxable in India.

  • If my visa cancelled after staying in a foreign country for 14 years, what should I do my NRE account in India. How to convert as RNOR account and avail tax exempt of interest earned from NRE account?

  • How long can we wait to inform the bank of your NRI status as it could be I might go back to a foreign country?

  • Dear Mr. Hemant
    I am nri with more than 25 years, now planning to come and settle in mumbai for good. Please advise if I should contact financial adviser or CA for my future planning on tax savings. If you could also give me their charges

    • Hi Michael,
      It depends on your requirement if taxation is the only issue CA is the right person. If you are looking for complete financial solution – you can consult a financial planner.

    • You can continue your deposit and there is no need for premature closure.

      To understand how the interest will be taxed scroll up to my previous commentary

  • I become an Australian citizen 5 years ago, moved to India with OCI permanently, what will be my status, nre or nro What happened to my new FD?

    • Please do not confuse citizenship status with tax residene status.

      Every tax resident in India, regardless of citizenship, is taxable on their global income as well as Indian income.

      As a resident OCI your Indian income will be taxed like any other resident.

  • I am an NRI and have few NRI fixed deposits in India. Now I am planning to resign and settle in India permanently. For how many months these deposits will continue NRI status so that I do not need to pay any income tax on their interest.

    • Hey Basil,
      No, it will not automatically converted you will have to inform your bank about your resident status once the FD Mature.

  • If I put some cash for FD in my NRE account, then after the maturity period that interest and cash will come to my same NRE account or to the NRO account on the same bank.

  • Both me and my son (adult) are NRIs and we have separate NRE accounts in Nationalised Banks in India. I want to transfer money from my account to my son’s account. Is there an upper limit for such transaction? Whether any taxes are involved in such transaction?

    • Hi Mani,
      There is no limit on the amount you transfer. But the interest earned from that will be taxable outside the India.

  • I intend to transfer money from my NRE account to my son’s account who also holds an NRE account in Nationalised Bank. Are there any restrictions on maximum amount. Are there any tax involved

    • Hi Sathyanandan,
      As per my knowledge the minimum interest rate on NRE account is 3.50%.And it differs from bank to bank.

  • If an NRI returns back to India, he will become RNOR initially if the criteria of 7 PY is applied. However, after one year, he will not qualify for RNOR status. Is that correct?

  • Assuming for an NRI returning back to India, If the NRE deposit matures in less than a year from arrival in India, will the interest be taxable for a person who returns back in say June 2020? Let’s assume that the NRE deposits are maturing during October 2020 till March 2021. So for AY 2020-2021, will the assessee be liable to pay tax on the interest accrued on deposits maturing after June 2020?

  • I had NRE FD in a bank and changed my status from NRE to a resident in July 2019. Am I required to tax on the interest earned from NRE fd for 2019 – 20?

  • I am a Canadian citizen and trying to settle back in India. I landed on March 10, 2020, and don’t intend to return unless required. I want to understand the process of navigating the NRI status and it’s redesignation which may not be beneficial at this point. All I have is nre account savings and no fd yet.

  • i returned back to india on 20 feb.2020 for good. I have money in the bank maturing in september 2023. upon maturity how can I transefer this money into my indian account.

  • Sir, your posts are very much useful. Thank you!
    if I have no intention to go back to abroad and no other foreign income is there, will it be helpful to convert NRE FD’s to RFC account?
    RNOR qualification: will it counted the days visited to india as vacation in between in calculations.
    Note: 30days before I came to India

    • Hey Ganesan,
      As per my knowledge its good if you continue your NRE FD’s till maturity.
      No it will not countable in calculation.

    • Hey Abdul,
      You can continue your FD till maturity and your NRE saving account will be re-designated as a resident rupee account.

  • After I lose my NRI status, what should I do with my NRE INR account balance? Is the balance eligible for interest exemption under RNOR status even after redesign action as a resident account?

  • Can an NRE FD started in “x” bank be transferred as an NRE FD in another “y” bank. Just to diversify the asset as don’t want to park all asset in one bank and the bank suddenly goes kaput like the PNB / YES bank

    • Hi Bhupesh,
      Even on returning to India, if his/her residential status is NRI for a particular financial year, the interest income on NRI-FD is taxfree.

    • Hey Amarnath,
      In this regard, you are required to undergo for the re-KYC and submit relevant documents for the same.

  • Hello
    I plan to return India now in May 2020 and worked abroad for about 28 years. Now can i keep NRE FD now for 3 years and get the tax free interests? I will be retiring so do not plan to take up any employment again. (Bank was pushing that put the NRE FD before coming here so you get the tax free interest till its maturity !! so is this correct?

    • Hey Deb,
      No, you don’t have to pay tax on interest till the maturity of your NRE fd.