I was working abroad in the Gulf for nearly 30+ years as NRI and I returned to India on 1st February 2014.
1) While filing ITR as status 'RNOR', FCNR US$ FD interest was shown under 'EXEMPT INCOME' for FY 2014-15 & FY 2015-16.Should I show my status as 'RESIDENT' instead of 'RNOR' while filing ITR now for FY 2016-17?
Please confirm I will have to pay tax on FCNR FD INTEREST w.e.f. FY 2016-17.
2) Had already converted all my NRE RUPEE FDs to resident FD's & paid tax on FD interest for FY 2014-15 & FY 2015-16. I hope that was correct.
Please clarify
2 Answers
Hi,
If you have been staying in India for more than 182 days in a FY, your residential status becomes Resident Indian. You need to update all your bank records and pay taxes (if any) accordingly.
Interest on FCNR is not taxed if your are an NRI or RNOR.
"Interest earned on FCNR deposits is tax exempt as long as an individual qualifies as an NRI or not ordinarily resident. On qualifying as an ordinarily resident or ROR, an individual is taxed on her global income in India. Hence, interest earned on FCNR deposits will be taxable in India."
Sir, please reply to the specific query, keeping in mind the dates shared for the specific Financial Years specifically queried
Hi,
A returning Indian who has been an NRI would continue to enjoy the tax exemption for two years only upon acquiring the status of RNOR.
So, for FY 2016-17, if your residential status is Resident Indian, you need to pay tax on the interest income.
Suggested reading :
https://www.relakhs.com/residential-status-calculator-nri-taxation/
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Sir, please reply to the specific query, keeping in mind the dates shared for the specific FY.