I have been getting conflicting views on how NRE fixed deposits are taxed after an NRI returns to India permanently. I have talked to the bank and one bank has said that the fixed deposit needs to be closed immediately on return and another bank says that they can run till maturity. I had spoken to two CA's and they both also gave conflicting views, one saying that the NRE fixed deposit was tax exempt until maturity even after I returned to India and that if I didn’t break the deposit I would not have to file IT returns for the interest income on them. And another said that the interest income is taxable immediately on my return, and I would have to file IT returns accordingly. I am now very confused If anyone could help with the following questions. 1 Do I have to break the NRE fixed deposit on returning back to India permanently or can it continue till maturity? 2. Do I have to pay taxes on the interest income or does that also remain tax free until maturity.
