Posted On
8/9/2020
9:16:09 PM
by
Sm
As soon as you return to India as a resident you’re supposed to convert your nre account into an ordinary one. The only effect will be that the interest you earn on the 5 lakhs will become taxable. If it is in FD earning say 6%, the interest will be 30,000 per year. This will be taxable but up to 5 lakhs income you don’t pay any tax.
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Posted On
8/9/2020
9:37:54 PM
by
Returnee
@sm, my interest income is about 11 lacs p.a. So can i split deposits between wife and me, then the net tax will be on 5. 5 + 5. 5 and taxed only for 1 lac between both of us right?
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Posted On
8/10/2020
10:51:18 AM
by
Indian
As far as i know you will be taxed if your income exceeds 2.5 Lakhs per year .Correct me if im wrong and not as someone said 5 lakhs per year .
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Posted On
8/10/2020
11:28:48 AM
by
Sm
@Indian - you are right. Tax starts from 2.5 lakhs. But if your total taxable income is not more than 5 lakhs, then no tax. If your total taxable income is more than 5 lakhs, then tax starts from 2.5 lakhs.
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Posted On
8/10/2020
11:33:46 AM
by
Sm
@returnee - if your interest income comes to 5.5 lakhs then you will be taxed for the amount that exceeds 2.5 lakhs. However if your interest income comes to 4.9 lakhs, then you pay no tax. If you have any other Indian income, like rent, you have to add that too for calculating tax. And strictly speaking, even if you gift half the deposits to your wife, you are expected to pay tax on the entire interest income. But in practice many people divide the deposits like this and pay tax only on the interest income accruing on the deposits standing in their name.
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Posted On
8/10/2020
3:31:44 PM
by
Indian In Kuwait
Can someone explain in a simple way please?
What sill happen to my 5 lakh savings in my NRE account when change my status to non NRI.
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Posted On
8/10/2020
9:23:01 PM
by
Sm
@ Indian in Kuwait - If you convert the 5 lakhs into non-NRE deposit, the interest earned on the 5 lakhs becomes taxable.
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Posted On
8/11/2020
1:10:16 PM
by
vmv
If you have plans to be NRI again, then you need not change the account status. There will be a time period of course , before it was something like 3 years, But it has changed in the last union budget. But you dont need to worry, just contact your bank and explain you solution and plans. They will advise you the best way out. You may have to submit some proof that you were an NRI till April 2020, like the civil id copy or passport residence page copy.
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Posted On
8/11/2020
2:13:57 PM
by
Indian In Kuwait
Thank you very much each and everyone for your valuable comments.. it was really a great help and learning..
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