WHEN SHOULD NRI'S CLOSE NRE-NRO-FCNR ACCOUNTS- By CA Sriram Rao
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- Опубліковано 13 жов 2024
- #nri #nrimoneyclinic #financialplanning
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Love this channel for its simplicity and being straight to the point. As the tagline ways "No hype. Just the right advise". Bhat sir asks the right questions too. Thanks to CA Sriram. 👍🏼
Thanks for this wonderful video.
I see unfair ruling by RBI and here is why I feel so.
Before I became an NRI, I opened fixed deposit accounts, interest were taxed. Over a period of time (many years) the FD has renewed few times and during these many years my residential status has changed to NRI. Now these FDs should be considered NRE and hence should be exempted from the income tax. My request is based on the same logic(RBI) where NRE FDs are getting taxed upon we returning back to India and loosing NRE status.
Nutshell- IF loosing NRE status allows indian gov to tax NRE FDs THEN gaining NRE status should exempt previously opened FDs from the income tax.
Your understanding is wrong. FD opened when you were NOT an NRI will remain as it is. NRE FD can be opened only with the money earned from OUTSIDE India.
By your logic a person with 10 Crore fund moves to Dubai and start a pan shop there, all his money will become NRE and interest earned will be tax free. He may be getting 50 to 60 lakhs per year interest and normal tax will be 15 to 20 lakhs. By your logic he can save the tax and spending half of it can live in Dubai.
You are doing great service to NRI community
I am CA but not having clear information.
Uncle- You are the best source of knowledge in this field! Please talk about PIS & Non PIS account too for NRI's
Thank you Sir so nice to see an info-channel of this kind with very relevant concerns/questions being answered. I just happened to stumble upon on this site and so glad i found the information sought here.
Thank you very much for your kind words. Please subscribe and keep sharing the videos
I am keen to watch all your queries / program. I also take the liberty to circulate this to all my friends.
Many many thanks for such a informative program
Deeply appreciate this wonderful and informative content. The FY 2020 21, I am sure, Govt will be will be considerate to the NRIs who returned for short duration but couldn't perform their journey back due to Covid restrictions on international flights / Expiration of Visa during the intervening time / Temporary Suspension of visa by the host country etc. Clearly the intent is to get back to the host country. Such NRIs probably will be able to go back in next couple of months. I want to believe Govt will not enforce FEMA act on these individuals as this is an unprecedented force majeure ( act of God ) situation . However It is important FEMA consequences are clarified as was promised by the host of this video channel. This is such a grey subject that even qualified CAs have to do some research before commenting on the subject. Once again thank your for this enormous effort and would look forward for your next video on the Consequences part of FEMA.
I am also still looking for the answer as some individuals got stuck in india due to lockdown and lost the job of such a extended leave. What is govt saying on their residential status? It would be great help if Bhat sir Shriram Sir kindly clarify this point.
Thanks again for informative video.
Dear Sriram, I am happy that I already got the relevant answers for the questions I posted a while ago, by strolling thru the several trailing comments below by various individuals along with your respective comments on RNOR. Anyways, I am going to leave my earlier comments "as is" so that any new watchers (like me) can benefit from these comments...
Thank you NRI Money Clinic for inside view .Om Sai Ram.
It's crystal clear information 👌thanks team you made such a WONDERFUL information for those who NRE AND NRO...categories
Thanks a lot for the information. Can we ge the same type of information regarding Demat accounts pertaining to a NRI who is coming back to India permanently.?
Very informative. Can you please make a video on how an NRI can submit Tax return online?
Excellent Information given Sir
Thank You both of You🙏🏻
Points explained very simple language. Very helpful.
Very nice knowledgeable discussion and also easy to understand as well.
Well explained about NRI & Resident status, but I request to explain about the intermediate stage of RONR Status and applicable FEMA and Incometax provisions on NRE/NRO Accounts and taxation provisions. Thank you.
Thank you Bhat and Shriram Sir for providing valuable information. You both are doing great service. 🙏
Very informative video! I would love to know the consequences when the NRI has acquired a foreign citizenship and holds the OCI as well.
As far as bank accounts are concerned, situation will not differ for NRI's and OCI's...
Very informative I have to follow up on this.
CA Sriram is a brilliant young CA. Thanks for the inputs provided.
Thanks for the session. I think it will be a good idea to start with defining who is an NRI? For example difference between a person staying in Canada as a Permanent Resident and holding an Indian Passport versus A Canadian Citizen of Indian Origin (OCI) holding a Canadian Passport. Thank you.
* If you're looking from a Banking point of view : Indian passport holder with a valid PR or a Canadian passport holder with a OCI, both will be eligible to open a NRE / NRE account in India.
* From Indian Taxation/ filling of Income tax in India / Ascertain Resident Indian status - point of view : This will depend on the NRI, if he/she is out of India for X number of days in a FY as per income Tax of India rules to qualify as a NRI.
If you're holding Indian passport with valid Canadian PR or if you're holding a Valid Canadian Passport with OCI , but if you're in india for X number of days and qualify as a Resident Indian as per Income tax rules, you'll be liable to file taxes and pay necessary taxes here in India, provided you qualify as a Resident Indian (after considering RNOR Status).
This is good question to address. It would be logical if NRI status is granted only when the person acquires foreign passport.
Wow - another fantastic video. Many accolades to CA Sriram's loads of knowledge on taxation and confidence during his explanation. The video is mainly focused on NRI's returning to India and still maintaining NRE accounts which somehow results in evading the tax. How about Resident Indian converted to NRI but still maintaining all his Resident Fixed deposits & sending money from Foreign to Resident Indian account, If he is filing the tax every year correctly - what would be the consequences? During filing the tax, will there be any queries or rejections by Income tax department? Also If the resident Indian who recently became NRI has multiple Resident accounts in India but he has only converted his one main account frequently used by him to NRO and NRE account. will there be any issues to continue maintaining less frequently used Resident accounts without the conversion? When does the actual issue by the various departments will be raised (Is it during Income tax filing?). What are the consequences in all these scenarios as per the Indian law?
We will do a separate video on this issue It is a major issue .
Thanks for suggesting the topic
Hi Phani,did you get an answer for your above question?
I am also waiting for the above reply or video
Great ! How can one contact your office for issues related to PIO/ OCI resident in India.
Very well communicated..Thank you .
Your videos are so much informative. Please also advise on the following:
A person worked and retired in India, was receiving pension in a resident account. After retirement, went to UK and continue to live and as a result has become NRI.
But still maintains resident account for credting pension.
My question is can a NRI hold a res. account also for the purpose of receiving pension.
No , you should not hold Resident account as a NRI . Convert Resident account to NRO account and give that account number for crediting your pension
@@NRIMoneyClinic Thank you, sir. I will do, sir.
In case there are still funds to be received by the returned NRIs, settlement amount,claims,arbitrations, litigation, etc
if the account s are closed still the remittance can be treated as funds received from NR source and benefits accruing accordingly
very informative video, what if I have FD in NRE account? Can I maintain NRE till the maturity?
Thank you. It was very informative. Clears a lot of doubts. Another point too be clarified is..... In the event of a Joint Account, if one account holder becomes a resident Indian, what status applies -- Resident or Non Resident⁉️
NRI can maintain the account in his name jointly - either or survivor basis only… cannot maintain jointly and severally
*Scenario 1: If the First applicants status changes to Resident Indian, then the account will need to be converted to Resident SB account. And the joint applicant in this account continues to be NRI, then the account mode of operation can be changed to FORMER OR SURVIVOR.
* Scenario 2: if the primary Applicant continues to be a NRI, but, the joint applicant's status changes to Resident Indian, then the Customer id status of the joint applicant will need to be changed to Resident Indian status, and change the mode of operation of this NRE / NRO account / deposits to FORMER OR SURVIVOR.
Hope this clarifies
Banker will have to update KYC and update of details will tell the Change of Status. Ther one can get caught.
Thanks for your valuable informations. I have questions , After returing permanently, If NRE FD is for more years, bank will break it and renew it, from the new date. In this case person may suffer loss. Second question, there is few years that NRE intrest money will not be taxed (please correct me, before this period was 9 years and now it is 2 years.) This need to be elaborated. / clarified.
Thanks for explaining it in a subtle manner. This interview cleared lot of my doubts. Can you arrange for a session on the implications of doing trading as an NRI . I opened my trading account when I was a resident Indian but have not disclosed yet that I am an NRI. Also implications of trading in India when you reside in US OR Canada
money earned from Indian business including trading using money from India is taxable. You can start another trading account for NREs and using NRE fund can do trading. The profit or loss will be credited or debited to NRE account.
¹
If you reside in US, you must file the FBAR every year and report EVERY bank account and investments in the rest of the world. where you have a signing authority (in other words you are joint owner- NO EXCEPTIONS). This is a serious matter. Failure to do so and if caught (Indian ITO - has reporting agreements to US=IRS), can result in 50% penalty on the amount invested in India Plus other fines. You have to disclose in your returns all the income earned in India and anywhere else in the world. This is the LAW. If you are a US tax payer it is best to get rid of all investments in India which is a head ache from the point of view of filing US returns, and stay invested in US where things are a lot easy and transparent.
Can you please tell about LIC policies taken by NRI before going to US
What about a US citizen of Indian origin on OCI, retired, living on US penson, comes to India to try to live here for a long time, not sure for how long, children and grand children and all siblings living in USA, what should this person do about closing NRE account?
If the period of stay is short then he can maintain NRE accounts... if the period of stay is long and indefinite, then better to close NRE accounts as he would be an Person Resident in India...
@@sriramrao2514 For NRIs that are US Citizens, they are always considered tax residents of USA wherever in the world they reside and for however long. So when you try to open a resident bank account in India with any bank in India, you are not allowed to open a resident bank account if you are a tax resident of any country other than India. Same happens for opening resident demat account in India. There is a lot confusion in the actual implementation of this resident/non-resident status esp. as it applies to US Citizens with OCI card who are residing in India. You are saying one thing, but the big banks (HDFC, ICICI, Axis, etc) treat this differently, and they explicitly disallow resident bank/demat accounts to NRIs with US Citizenship.
@@bhaumin I agree that there are lot of misconception around this even with bankers…
FYI- opening, maintaining and closing of any kind of bank accounts are governed by FEMA regulations and not Income Tax Act… practically I have seen that even bankers are getting confused about this as then take into account residential status as per Income Tax Act rather than FEMA which is not correct way of handling things in India…
It is correct that once a person becomes US Citizen, he becomes Tax resident of US, it this a provision as per US laws and it is also possible that a person being IS Citizen becomes a tax resident of India as per Income Tax act also… this position is called as Dual-residency and to solve this there are tie-breaker rules in article 4 of India-US DTAA
Very very nice information to all NRI community. Presentation is very simple and understandable. Please keep updating with all laws and new ammendments related to NRI.
What will be the status of LIC policy started before changing status from Resident to NRI while opening NRI account. Should it be closed or continue till maturity.
Can continue till maturity...
very helpful & very well thought through. One quick question, if a person is no longer an Indian citizen, does all this apply for him/her ?
Yes, it would apply provide he has bank accounts in India..
Basically one should understand Tax residency status.
Dear Sir. Thanks for your reply which is much appreciated. To be honest, an Indian should not even have an NRE account. It may earn interest in India but this interest is taxable in the country where one is living ( I mean abroad ). Transferring NRE funds abroad is a big headache. I have been through it 7/8 times and I know how it feels. I regret opening NRE accounts.NRO account is a better option tax is deducted at source and is refundable if one qualifies for it. Of course, IT return has to be filed by a CA ( fee will be charged )and it takes months to get the refund. Opening NRE and NRO accounts may be easy for some but I shall not recommend them.As for sharing knowledge I think you are very well suited for that job. I am just a laymen and my experience has not been a pleasant one. …….Kind regards
Agree with you 200%. You never come out ahead with declining exchange rate and the tax filing and other paper work. Not worth it.
Thank you both for the exceptional videos.
I am a foreign national with oci status. I will be getting a pension from abroad when i retire in india. Will I have to then also have to convert to resident accounts? Thank you both.
Thanks Mr Sriram for the valuable information. Also we thank NRI Money clinic for service to NRI community.
On returning back to India for good, can NRI continue to hold the overseas bank account and overseas brokerage accounts which holds overseas securities? How long can maintain the same? Is there any disclosure requirements to RBI or IT department ?
Thanks
Very informative. Can you all suggest investments for NRI who have fixed deposits but want higher interest rates. How does an NRI buy mutual funds in India or insurance products. How are they taxed etc. You two very clear , explain very well.
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RBI seriously need to revise those outdated rules attached to bank accounts operation. Unfair banking charges too
These rules are made because of some reasons..especially to prevent money laundering and black money prevention.
Vow such a great informative video thanks both of you gentlemen 🚹 👏
Thanks for the info, can you kindly let me know regarding PIS account also? When should one close it after returning back to India ? Also how the taxation applies... Thanks again in advance!
Irrespective of whatever the reason to overstay more than 180 days one should close the account. It is mandatory. Only it is not taken seriously by IT.
Minimum 180 days outside of India is requirement for Non resident status and 180 days stay in India to close the accounts. There is no such thing as no time line.
Awesome enlightenment for many ignorant NRIs. It’s an eye opener and well explained. Excellent job!!
There are many NRIs who have headed home due to pandemic, travel restrictions and global business slowdown...what happens to such individuals where the future in uncertain for going abroad and they get qualified as a resident due to number of days criteria but intent is still there to explore jobs overseas? Do they need to convert bank accounts or does Government gives any leeway for pandemic stuck individuals?
As far as FEMA is concerned, if you are able to establish intent with documentary evidence, then you can continue to maintain NRO/NRE accounts. If stay increases for a prolonged period of time, then it is difficult to establish intent also.
Dear CA. Sriram, thanks a lot for the response and your guidance is much appreciated. Dr. Bhat and CA. Sriram are doing a marvelous job for enriching uninformed NRIs with their vast knowledge.👍👍
Thanks for through discussion. Very helpful ! I have come to India , now. Will be closing NRE and NRO a/cs together with Dmat..stks and securities A/Cs in near future. 1. However I have permanent residency out of India. I maintain property, Bank a/c s etc due to prolonged stay out of India. I have been paying I.Tax in both the countries very delegently. All my foreign holdings have been declared to I.T. department here. Am I allowed to hold my foreign assets even after PIR ... any special rules ? 2. My bankers tell me the day I close Bank a/cs , they will just transfer my stks. to new Resident DMat a/c .. and shares would be deemed to have been purchased on that day.. there by I loose the advantage of Grandfathering Rule of I.Tax, treating 30Jan2018 as comparison pricing date with advantage to the share holder. ...How shall I proceed ?
Very well explained.. thanks
Greetings of the day to both of you, gentlemen. First, let me appreciate the wonderful discussion. However, I have a couple of doubts. I had a savings account in a private bank in India before I left India on employment visa in 2016. Subsequently, I had requested the banker to open NRI account. They had opened NRE account and my savings bank account was converted to NRO account.
I'm planning to return to India for good somewhere in the middle of the next financial year. Can you please clarify on the following issues?
1. When I close my NRE and NRO account, what will happen to my original savings accounts at the said bank?
2. Will my NRO account be converted into savings back maintaining the same account number?
3. The amount which was there in my NRE account, will be transferred to obviously a savings account. Since this money was earned when I was an NRI, ideally it should not attract any tax under the income tax law. However, only the interest that I get on the said amount attracts income tax. Is this correct?
Good day
1. NRO/ NRE will get re-designated to resident accounts
3. Correct
Discuss clearly how about NRI stuck in homeland due to special unprecedented circumstances such COVID pandemic...what is the consider because this is a forced situation not a regular or normal condition.
That will not affect your NRE accounts .
@@NRIMoneyClinic thanks... because we didn't came here in a intention for permanent return and also our job is still there in abroad and our slary is dispersed every month there and we have salary slip from school for evey month.
Very good and clear on the subject proper
Thanks for the valuable information. Please do as many such information. Excellent
Nalla visayam. Ithai Tamil language explain seithal nallathu.
Could you please make a video about people who obtained foreign citizenship and are returning to India?
Thank you for the session. It clarifies very important points. I have a question, when NRI return to India after retirement, can he/she transfer his provident fund money to india ? And will there be any tax on that ?
Very knowledgeable video .
Hello Chandrakant Ji. Thanks a lot for your informative videos. Would be great if you could clarify below.
1. It was said that FCNR deposits can be continued until maturity. If so, does the interest from such FDs also become taxable? Can NRE deposits also be continued until maturity? Why not, since we are ready to pay the applicable taxes until the deposit matures. Thanks.
Interest on FCNR deposits will be exempt in the hands of a person who is non resident (NR) or Not Ordinarily Resident (RNOR) as per Income Tax Act. If he becomes Ordinarily Resident, then interest from FCNR will be taxable. Unlike FCNR deposits, NRE deposits can not be continued till maturity. It needs to be closed. Payment of taxes is a remedy under Income Tax only. If NRE deposits are still maintained even on becoming Resident under FEMA, it would be violation of FEMA and will attract penalty in the form of compounding fees..
NRO and NRE accounts can be maintained in the form of term deposits also. When a NRI returns to India and becomes a resident, such term deposits need not be converted into resident accounts until maturity. Forcing them to close such term deposits before maturity date will entail loss of interest to the depositor. The same way FCNR deposits can be continued till maturity date, NRO and NRE term deposits also can be maintained till maturity date.
Of course, the interest earned on these deposits, while being a resident, will be taxed in terms of rules applicable to Residents.
As to designating funds held by returning NRI as resident, my understanding is the customer has the option to convert entire balance in NRE Rupee account along with FCNRs not yet matured. One may not be able to designate only FCNR as Resident account, converting NRE Rupee funds held in NRE TD and SB as domestic accounts
Sir, if a resident bank deposit holder adds his NRI daughter as second deposit holder, will it become FEMA violation? Pls reply.
Due to the pandemic if a person cannot go back outside India, does that person lose his NRI status and will the person have to pay income tax since he cannot be outside India for 180 days from April 2020 to March 2021.
Will soon do a video this topic
@@NRIMoneyClinic pls , awaiting.
Pl let me know since I have also come back to India due to pandamic n do not know when I will.l return since the situation abroad has not yet improved n also international Flights have not yet started. Pl advice?
Very good information.Thank you very much.
Provisions of RNOR status are very important for taxation purposes of NRE and FCNR accounts
As explained in the video; opening, maintaining & closing of NRE/NRO/FCNR accounts are governed by FEMA regulations.
As per FEMA Act, there are only 2 types of residential status one being a Person Resident in India (PRI) and another Person Resident Outside India (PROI).
Only PROI can maintain NRO/NRE/FCNR accounts. If a person is PRI, then he has to close his NRO/NRE accounts and FCNR can be maintained till the date of maturity.
RNOR status is given under Income Tax Act and it does not have any bearing as far as opening, maintaining and closing of NRO/NRE/FCNR accounts. Income Tax Act is concerned only about taxing your income. If you earn interest from NRE account, the same will be exempt if you are a PROI under FEMA and it will be taxable if you are PRI under FEMA irrespective of your residential status under Income Tax Act. If you earn FCNR interest the same will be exempt from tax till you are NRI or RNOR under Income Tax Act.
To know more about RNOR status, you can check out these videos
ua-cam.com/video/pKQKwtwvUH4/v-deo.html
ua-cam.com/video/fDF2ZsFM-cM/v-deo.html
Can you also make a video of how Nri/Oci holders can open demat accounts and invest in stocks ,mutual funds and futures and options
You said that one can keep an FCNR deposit till maturity if one returns to India. However, is the interest earned from the FCNR deposit taxable, because it was not taxable when one was an NRI.
Hi, I am an NRI and also Resident but Not Ordinarily Resident (RNRO) satisfying "... an NRI in 9 out of 10 financial years preceding the year OR during the 7 financial years preceding the year been in India for a period of 729 days or less". As per online search, I found that "If you are a RESIDENT BUT NOT ORDINARILY RESIDENT (RNOR) Interestingly, in case you have just returned back to India - you are allowed to keep your RNOR status for up to 3 financial years post your return back to India. That could benefit you in a big way - since your taxation will be very much in line with that of an NRI and therefore income that you may earn outside of India (while you may have returned back) will continue to be not taxed in India".
Please clarify me whether I can keep my NRE FD (not FCNR) for further 3 more years after settling in India as a RNRO ?
As explained in the video; opening, maintaining & closing of NRE/NRO/FCNR accounts are governed by FEMA regulations.
As per FEMA Act, there are only 2 types of residential status one being a Person Resident in India (PRI) and another Person Resident Outside India (PROI).
Only PROI can maintain NRO/NRE/FCNR accounts. If a person is PRI, then he has to close his NRO/NRE accounts and FCNR can be maintained till the date of maturity.
RNOR status is given under Income Tax Act and it does not have any bearing as far as opening, maintaining and closing of NRO/NRE/FCNR accounts. Income Tax Act is concerned only about taxing your income. If you earn interest from NRE account, the same will be exempt if you are a PROI under FEMA and it will be taxable if you are PRI under FEMA irrespective of your residential status under Income Tax Act. If you earn FCNR interest the same will be exempt from tax till you are NRI or RNOR under Income Tax Act.
To know more about RNOR status, you can check out these videos
ua-cam.com/video/pKQKwtwvUH4/v-deo.html
ua-cam.com/video/fDF2ZsFM-cM/v-deo.html
Very useful info
Thanks Mr. Bhat.
Very informative sir. ..
Waiting for the consiquence video....
If NRE FD has to be closed on returning to India, will it be premature closure of the NRE FD or will the type of FD change from NRE to normal FD? Closure will lead to penalty of interest by the bank. Please clarify
This question can be better answered by your banker.
As I understand from my bankers, the NRE savings will have to be converted Resident savings account, but the NRE FDs can continue. However all the interest accumulated on NRE FDs from the time of status change are to be included in Resident taxable income and tax must be paid. On maturity, the NRE FDs will get converted to Resident FDs.
@@karthiksury1587 most of the times the bankers are ill informed. Don’t believe me, check the below link yourself, which RBI’s master direction 5R… check para 4.9 of ‘Part II - Opening, holding and maintaining accounts in India by a person resident outside India’ - therein
www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10198
@@sriramrao2514 thank you. I thought it will benefit many. Hence I posted
@@karthiksury1587 thank you so much
I daresay my 13 year old daughter can make simpler and clearer rules than the entire babudom of India - but again, I’m probably the hundred millionth Indian to reach that conclusion and make that observation :-)
Video needed regarding Aadhar card Nri pan card linkage or pan card invalid or without linkage how can Nri file tax online problems website for filing tax after Last date given for Aadhar card many Nri not have
Thanks for the very informative video. Can you also explain the status of RNOR and tax benefits?
There are two two videos on RNOR status on this channel. Please search and be guided
Good intention to do a program on this subject. Very useful. However nextvtime can you bring an expert who is a little more articulate.
Thank you very much for your kind words . Articulation is required while pleading a case . While presenting the taxation matters , what is required is precision which the faculty has done very well. Your point is very well taken in positive spirit . Please subscribe and keep sharing the videos
I had a lndian guy working with me in UK on work visa, during demonatisation his visa expired and he went back to India I gave him 1.5 lakh rupees to put in his bank and hoping he will give the money back, he said the bank took the money and told him he can not have it back because he is considered a NRI.
Please check the no. Of days to brand oneself as NRE. Changed in 2019. One shud stay not less than 242 days overseas in that fy to call oneself as NRE
First of all please understand there is no 242 days rule at all... what you are talking is from the point of view of 120 days rule which has come into force after Finance Act 2020, and this specific amendment is under Income Tax Act and Not under FEMA. Further, this 120 days rule applicable only to person visiting India and not to returning NRI's as when they are returning they are not on visit....
To know more about Residential Status under Income Tax Act & RNOR status under Income Tax Act including 120 days rules please check the below videos...
ua-cam.com/video/pKQKwtwvUH4/v-deo.html
ua-cam.com/video/fDF2ZsFM-cM/v-deo.html
FEMA regulates opening, maintaining and closing of various types of bank accounts. Under FEMA there are only 2 status either a Person is resident in India (PRI) or person resident outside India (PROI). If one becomes PRI then he cannot maintain NRO/NRE/FCNR accounts.
NRE/NRO accounts must be closed/re-designated to resident accounts as soon as person comes back to India for permanent settlement or for exercising employment/business in India. Because on the date of arrival itself, such person would become a person resident in India as per FEMA. FCNR can be held till maturity.
You can check it yourself, RBI’s master direction 5R… para 4.9 of ‘Part II - Opening, holding and maintaining accounts in India by a person resident outside India’ - therein www.rbi.org.in/Scripts/BS_ViewMasDirections.aspx?id=10198
Taxation of NRE interest depends on one’s residential status under FEMA. If a person is resident outside India as per FEMA, the NRE interest will be exempt under Income Tax Act.
FCNR interest is exempt in the hands of a person who is a non-resident or RNOR under Income Tax Act.
RNOR status is available only under Income Tax Act and not under FEMA. Under FEMA there are only 2 status either a Person is resident in India or person resident outside India.
Useful it is... Yes
What about the PIO (or the OCI HOLDER) want to live in India for a long long time (let’s say couple of years)…&.. is a retired senior citizen… CAN HE KEEP HIS NRE / NRO A/Cs?!
The rules are same explained in the video for a PIO/OCI card holder
@@sriramrao2514
Thanks SR… Even if I’ve no income in India & I survive on my pension & SS?
Which I’ll have to transfer every month to survive?
Very good video although I watched this about three months after it's release !! Can you kindly shed some lights on the status of bank accounts by RNOR. Once became a RNOR, should he change both NRO and NRE to RFC (assuming FCNR will be maintained till maturity and then transfer the proceeds to RFC upon maturity, etc..). I couldn't find detailed info on RFC in any bank sites. A few questions that may be applicable to RNOR: 1) whether RFC has savings or current account 2) whether RFC has FDs and whether interest from these FDs are taxable 3) as soon as I open RFC, all my NRE/NRO accounts' proceeds will be immediately transferred to RFC?..ADvance thanks for your reply..
Yes ,lot of knowledge, thanks.
Very informative video. Thank you so much
Hello sir, What is the difference between RDA and MTSS remittance systems?
Does using platforms like Transfer Wise to remitt money into NRE accounts come under MTSS?
I understood that as per FEMA an NRE permanently returning to India has to close his NRE & NRO Accounts as soon as possible and maybe within 3 Months.
However, I have also read and been told that if you have been an NRE for the last 9 Years and if you are permanently returning to India, you can still maintain your RNOR status for that Year as well as the subsequent Year i.e to say another 2 or 3 Years without paying any Tax on your NRE Savings and NRE Rupee Time Deposit Interests for those financial Years.
It is only after this cooling period of 2 or 3 Years post your returning back to India will your RNOR status get converted to Ordinary Resident status and then only will you start paying any Tax on your Interests from these Bank Accounts and Time Deposits made out of your NRE money in the past.
As explained in the video; opening, maintaining & closing of NRE/NRO/FCNR accounts are governed by FEMA regulations.
As per FEMA Act, there are only 2 types of residential status one being a Person Resident in India (PRI) and another Person Resident Outside India (PROI).
Only PROI can maintain NRO/NRE/FCNR accounts. If a person is PRI, then he has to close his NRO/NRE accounts and FCNR can be maintained till the date of maturity.
RNOR status is given under Income Tax Act and it does not have any bearing as far as opening, maintaining and closing of NRO/NRE/FCNR accounts. Income Tax Act is concerned only about taxing your income. If you earn interest from NRE account, the same will be exempt if you are a PROI under FEMA and it will be taxable if you are PRI under FEMA irrespective of your residential status under Income Tax Act. If you earn FCNR interest the same will be exempt from tax till you are NRI or RNOR under Income Tax Act.
To know more about RNOR status, you can check out these videos
ua-cam.com/video/pKQKwtwvUH4/v-deo.html
ua-cam.com/video/fDF2ZsFM-cM/v-deo.html
@@sriramrao2514 Thanks Sriram Sir, for your detailed reply.
I watched the 2 Videos on RNOR status and found them to be very informative.
Excellent discussion...
what will happen to bank account number if converted from NRE to normal account , some times you need to wait long to receive dues form overseas companies.
Very informative. Thanks for sharing.
Please tell about ppf account of NRI - opening of PPF account before NRI status, operation of PPF account after NRI status but before maturity of PPF account, closing of PPF account after maturity of 15 yr when NRI status.
Thank you for making those videos. Very informative. I am Overseas Citizen of India (OCI) residing in India. I have FNR and NRE Fixed deposits in India. I don't have immediate intention to go back due to COVID. I may need transfer the FCNR funds sometime in future but that may not be within a year.
How Can I maintain the funds in Foreign Currency after the maturity of the FCNR FD . Are there any options ?
If I convert all the accounts to domestic accounts and want to transfer funds out of India how can I do that?
Is there any limit on amount of currency I can convert from domestic a/c for OCI ?
I got your point and agree to it that as long as I am living in India for 182+ days my global income becomes taxable in India.
Thanks
At the time of closure/re designation of NRE and on maturity of FCNR, you can convert/transfer them to RFC account, which is normally freely repatriable and once u become resident outside india, you can once again convert RFC to FCNR/NRE… consult your banker
sir. how power of attorney works. should I get a pofattorny from UK solicitors or from India. I have to appoint someone India to buy property r dealing any money related issue.
Sir, A very informative presentation. Thank you for the information. Kindly intimate from which authorised agency, I can get the Tax Residency Certificate in India, in respect of an NRI who has returned to India in current financial year and claims as Resident based on no of days of stay in India. This in connection with purchase of a house from him and to confirmation of the TDS % applicable. (1% for resident or higher as applicable to NRI property)
If he claims that he is NRI, then he can apply in Form 10FA online to his jurisdictional assessing officer, who after verification of records, would issue TRC in India in Form 10FB
Thanks for the video and information. Is it possible to maintain your NRI status if you stay more than 182 days outside India each year on US or Canada visitor visa which allows you to stay for six months at a time. In such instances are you liable to pay income tax on NRE deposits or interest income?
There is a possibility to plan and execute such a situation, to maintain NRI status. However, it is highly subjective and would depend facts and circumstances of each case.
You need to be permanent resident outside india to get tax exemption. Visit visa status not eligible. Like this all rich people will enjoy 6 months outside india to avoid paying income tax.
straight away subscribed your channel
Nice presentation very useful
Hi sir..Should we pay tax to govt for amount deposited on NRI account. If yes, what is the limit from which we have to pay or will it be deducted by bank from our a count.
Beautiful questions
Thank you very much for this nice video. Just for your information, a NRI has to submit his Re-KYC every 2 year (that includes his employment visa outside India + tenancy contact + utility bill etc). Otherwise the account bcom inoperative. When a NRI retuned back to India, he can’t submit these documents. So, even a NRI don’t disclose his return, he can’t hold it for more than two years. Further, I hv a question to ask. If a person employed in a foreign company, having his employment visa from that company, salary is coming from abroad, but working from India, can hold NRE & NRO account?
I am aware of the fact that bankers have to do re-KYC of NRI every 2 years, but I have noted that the re-KYC documents are not collected by the bankers in most of the case for the reasons best known to them (of course there are exceptions).
If a person renders employment services from India (that is being in India), irrespective of where the employer is situated and where the salary is received, the salary income would be deemed to have been received in India and hence taxable in India even in the hands of NRI under Income Tax Act. However, he can avail certain benefits as available under DTAA between India and the country of his residence. Since such person is exercising his employment in India (work from home situation) he invariable be an person resident in India as per FEMA and would be required to close NRO/NRE accounts.
Ok understand how to close the NRE account when NRI returns to India, but dint clear in which account this money should maintain, either ordinary SB account or current Account ? And is there any interest we should pay while maintaining this money. Appreciate your feedback in this regards
You can convert these NRE account to resident, there is no need to close.... if funds are in NRE SB, then the same will be converted to resident SB and if it is in NRE FD, then it will be converted to resident FD...
1. The date of return shall be the effective date for treating NRE , NRO and even FCNR accounts as domestic accounts and that names income accruing on these caccounts from such date taxable under IT rules.
Repatriable nature of funds and income accruing on these deposits which are , for all practical purpose turns out domestic accounts is lost.
Though customer has the primary responsibility to declare to banks of becoming resident banks do have obligation since once in every 2 years banks need to copies of passport afresh . Such contention discloses the fact about NRI becoming resident as residence Visa of foreign country stands cancelled.
You have described FEMA Law that to see stay more than 182 days in a year.
Is it same year for FY taxation or check stay in preceding year ?
I mean to say, if I have to file tax for FY21-22 and during FY20-21 I stayed less than 182 days in India than for FY21-22 even if I stay more than 182 days in India, will I be considered PROI under Fema for FY21-22 due to I have stayed more than 182 days outside India in FY20-21.
Ofcuz employment is a another different story to consider.
You must know that AO in IT departments are so dumb that they don't know these rules and they creating unnecessary problems and raising demand or they have mentality to harass taxpayer and get some bribe from Innocent NRIs and in 99% cases, it goes to CIT appeal to be get cleared which costs more with lot of extra time. Even big officers have know such knowledge. Its better avoid to stay in India more than 182 days
What IT department knows or does not know is none of our concern, we must know what is law and act accordingly. As far as residential status under FEMA is concerned, one must give priority to 'intention' of either going outside of India or coming to India rather than 'physical stay'. However, if physical stay has to be considered, then yes, under FEMA previous years stay has to be verified in order to determine residential status of this year...
Goodinfo.thanks
wah... thank you Sir for explaining ...!
What kind of account an OCI can maintain when they live outside or when they plan to live in India for more than 182 days. Thanks for your response.
Rules for NRI’s and OCI’s are same…
Thanks for this informative video. I do have a question related to NRE FD accounts. The minimum duration to receive interest on an NRE FD is one year. If a NRE return to India and Close the NRE/NRO account, NRE FD's are not matured yet then Does the person receive interest earned or not? Can he continue the FD?
Bank gives interest for part periods also… consult your banker for further information