NRE FD deposits?

Sr K - 2007-10-26 01:59:10 - Investing

after an NRI opens NRE account, puts in a NRE Fixed deposit for 5 years, later he returns back to India after 1 year, what will happen to his NRE fixed deposit ? will it continue to be tax free ?, if so for how many years ?

Best Answer:

NRE fix deposit is not tax free. Interest earned is taxed. If he returns to India, he can maintain the status of account for 1 year. Then it will be converted to ordinary account. In both the cases, tax is only on interest, not on basic amount. Cheers.

Answer:

NRE fix deposit is not tax free. Interest earned is taxed. If he returns to India, he can maintain the status of account for 1 year. Then it will be converted to ordinary account. In both the cases, tax is only on interest, not on basic amount. Cheers.