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Exemption on FD interest for NRE under RNOR status?

T S Khurana |566 Answers |Ask -Follow

Tax Expert - Answered on Feb 25, 2025

A certified management accountant since 1993, T S Khurana is a fellow member of The Institute of Cost Accountants of India. His areas of expertise are income tax, specifically litigation cases, and GST.

Since the last 21 years, he has also been providing expert advice on financial matters, including investments and diversification of funds, and wealth building in the long term to his clients.
He believes that investment in real estate is the safest way for better returns and wealth generation over a period of time.

A former chairman of the Chandigarh Chapter of Institute of Cost Accountants of India, T S Khurana has also served as member of its technical committee.... more

Question by SUJAY on Feb 24, 2025Hindi

I was NRI for previous 7 years before this current year. In this current year can i have exemption in Income tax to my NRE FD interests as RNOR status ?

Ans: When you are not enjoying the status of NRI, you won't be eligible for any tax exemption of Interest earned on NRE account.
Most welcome for any further clarifications. Thanks.

DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.

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Sir, I was a NRI for last 14 years and in June 2022 I permanently returned back to India after job contract finished and i qualified as RNOR for FY 2022-23, upon returning in June 2022 I closed all my NRE FD and opened resident FD. Is the interest earned upto June 2022 in NRE FD s are taxable as RNOR taxation?

Ans: Person cannot avail the exemption under section 10(4)(ii) of the Act and the NRE interest income earned for the entire year shall become taxable till the time the account is operational. Further, the taxable interest earned from the NRE account will be eligible for deduction of up to Rs 10,000 (for savings interest only), under section 80TTA and up to INR 50,000 (for senior citizens) under section 80TTB of the Act.

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Sir, I was a NRI for last 14 years and in June 2022 I permanently returned back to India after job contract finished and i qualified as RNOR for FY 2022-23, upon returning in June 2022 I closed all my NRE FD and opened resident FD. Is the interest earned upto June 2022 in NRE FD s are taxable as RNOR

Ans: Person cannot avail the exemption under section 10(4)(ii) of the Act and the NRE interest income earned for the entire year shall become taxable till the time the account is operational. Further, the taxable interest earned from the NRE account will be eligible for deduction of up to Rs 10,000 (for savings interest only), under section 80TTA and up to INR 50,000 (for senior citizens) under section 80TTB of the Act.

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Question by SUJAY - Feb 02, 2025Hindi

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If my status an NRI for last 7 years and i have stayed only 720 days in india last 7 years then my tax status for current year..can it be considered RNOR ? Do i have to pay tax for income from NRE fixed deposit interest in this current year ?

Ans: As your stay in India less than 730 days, you can not be considered as RNOR unless
you are Indian citizen or person of Indian origin having a total income more than exceeding Rs.15 lakhs (excluding foreign income) and in India for 120 days or more during financial year.

Income of NRE FD is exempt in case of non resident

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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