Income tax on NRI remittances

The Interest that is earned in India on any deposits will be taxable in India and in your hands as the Interest will be in your name as the investments are in your name.

The taxability will depend on the overall limit of Rs 1,80,000 so if your total Income exceeds the limit than you will be liable to pay tax.

thanks sanjeev for ur prompt reply both of us r senior citizens but will such remittances be taxed in our hands as our income?because he wants toremit about 20 lacs

There are two categories of senior citizens I think you would fall in the first one which is less than 80 years so in your case the Income upto Rs 2,50,000 will be exempt.

In case you invest the amount you receive from your son Rs 20,00,000 in bank FD that will fetch you interest @ 9.75% that is the rate offered by banks to senior citizens so that should amount to Rs 1,95,000 aprox so that would be less than the Rs 2,50,000 limit and hence not taxable.

But as you would have also be having some incomes and savings of your own and if you combine the interest/returns of your savings plus the new ones it may exceed the Rs 2,50,000 mark so better invest the funds that you receive partially in your and partially in your wifes name so that the consolidated income dont exceed Rs 2,50,000 mark and income remains not taxable.

Learned Mr. Sanjeev has given valuable advice. Kindly follow it.

Kindly collect the funds from your son thru authorized channels. This shall satisfy the norms pertaining to AML guidelines and proof of source of funds.

If you invest now the interest for the period up to 31st March, 2012 (say 7 months) shall be computed for filing return and thus the income tax  liability shall get divided in two financial years.

Federal Bank, a class2 scheduled commercial bank under RBI is offering interest @ 10% for 333 days for general public and @10.5% for Sr. Citizens without any premature withdrawal penalty.

Kindly do the nomination. You can prefer operation terms :E&S a/c, and  write on the form about payment terms: to either of the survivor as instructed by any of the applicant in E&S a/c.

While the banks are loud and clear on operation terms in forms, they are silent on payment terms and later quote their own terms which are not informed to applicants.

You can choose to prefer any bank or bank terms as suitable to you.

I agree with Mr Sanjeev's opinion