Interest on nre accounts

Discussion in 'Tax planning' started by saniya, Mar 13, 2014.

  1. saniya

    saniya Member

    I have a query as regards interest on NRE and NRO accounts. I know that these accounts can be opened by only non-residents.(NRI'S) Interest on NRE accounts is not taxable for non-residents whereas , interest on NRO accounts is taxable, (the "non-residents" in the above are non residents as per FERA(now FEMA). My query is that, the assessee is a resident in India both as per Income tax act as well as FEMA for Financial Year 2011-2012, but TDS has not been deducted by the bank on interest received by him from his NRE account.The interest recd from NRE A/C is around Rs.23000. So is the assessee liable to pay tax on above as he is not a non resident (The assessee is Resident but Not Ordinarily Resident as per Income Tax Act for Financial Year 2011-2012) Also the assessee has recd interest of around Rs. 7000 from his NRO a/c and TDS has been deducted by the bank @ 30%. Can the assessee file a return for AY 2012-2013 and claim refund of this amount as his income is below exemption limit for F.Y. 2011-2012? The assessee has filed Income tax return in USA for year 2011 and the interest from NRO as well as NRE accounts is taxed in that return. As well as TDS on NRO a/c is also shown in the return is shown in foreign tax credit sheet in US return. So will DTAA PROVISIONS also apply to me if I want to file my Indian Income Tax return.

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