NRI Taxation - Q & A Forum

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ssameerwadhwa asked 8 years ago

Hi Shree, I am an NRI planning to return to India. I just wanted to know What are taxation policies for NRI's (NRE Fxed Deposit Interest?) Are they taxable and if, yes, then at what rate Is it wiser to invest in mutual funds? I believe that they are now also taxed at 10% Any other legal means where the tax could be minimised for NRI's? Please advise Many thanks

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Sreekanth Staff answered 8 years ago

Hi, An NRI returning to India permanently can consider RNOR option. RNOR status is essentially a transition phase from being non-resident to being a resident (ROR). You are RNOR if you satisfy any of the following two conditions:

You have been a non-resident (NRI) in 9 out of 10 previous years preceding that year.
You have, during the previous 7 years preceding that year, been in India for a period of 729 days or less.

RNOR are almost treated like NRIs when it comes to taxation. So, interest income on NRE deposits remain tax-free. Suggest you to consult a CA who is an expert in NRI taxation to help you in this regard. Related articles: Article - 1 Article - 2 Is it wiser to invest in mutual funds? - May I know your investment objectives and time-frame? Related articles on MF taxation :