I am on NRI status from 1996 till 2018.( 22 years)
I have returned to India for good in June 2018.
I have NRE deposits worth 80 Lakhs maturing in 2022 and 2023.
I have filed ITR as mentioned below
AY-2018-19 NRI status
AY 2019-20 RNOR status
AY 2020-21 RNOR status
AY 2021-22 …… ?
I want to know whether i can have RNOR status for AY 2021-22 also.
can i hold my NRE deposits until they mature or interest income will be taxed.?
Your NRI status after returning to India will be deemed as RNOR status for 2 years and then eventually when the conditions for RNOR status is not satisfied, your residential status will become a ROR (Ordinary Resident).
As per RBI norms, Siva’s NRE FD account can be converted to Resident FD account without any penalty and without any change of interest rate and date of maturity. The only change is that the interest earned will be taxed according to your slab if applicable.
You cannot maintain your NRE account and NRE FDs when you are an RNOR. You need to convert your NRE account to resident account immediately upon returning to India.
But as an RNOR, you can maintain Resident Foreign Currency (RFC) accounts.
Resident Foreign Currency (RFC) accounts are bank accounts maintained by Indian residents for Global-scale transactions in Foreign Currency. Only returning NRI’s can open RFC account since it is specially established for NRI’s who want to bring their earnings in foreign currency from their overseas bank account to their bank account in India.
Interest income from RFC accounts is taxable. But if you qualify as an RNOR, then the interest income from RFC account is not taxable.
Suggest you to also consult a CA in this regard.
Thank you Mr, Sreekanth