BANKING AFFAIRS

Detailed explanation-1: -NRE accounts should be designated as resident accounts or the funds held in these accounts may be transferred to the RFC accounts, at the option of the account holder, immediately upon the return of the account holder to India for taking up employment or on change in the residential status.

Detailed explanation-2: -Once you come back to India permanently, you are a resident as per FEMA. And residents are not permitted to keep a NRE account. Interest on NRE FD is tax exempted only for Non-Residents. Therefore from the day you come back to India any interest earned in NRE FD becomes taxable in your hand.

Detailed explanation-3: -NRIs returning to India are only eligible to become RNORs for any fiscal year if one of the following conditions is met: They have been NRIs for nine out of the ten years prior to the fiscal year under consideration; They have spent no more than 729 days in India during the previous seven years; or.

Detailed explanation-4: -Taxation of interest on NRE account Any interest on the NRE account is fully exempt under Section 10(4)(ii) of the Income Tax Act without any limit. Since the interest on such deposits is fully exempt the bank will not deduct any tax on such interest at source.

Detailed explanation-5: -The NRI status in India is attained by people who are Indian citizens but stay in India for less than 182 days in the preceding financial year or people who live outside India for employment, business, or any other purpose for an uncertain period.