Ram (retired officer) 18 May 2013

Indian income tax on non residents

MY friend is non resident staying in US. He has job there. he is paying income tax there. he has no income in india. he doesnt pay any income tax here. he has no pan card.

he has a NRE a/c in india with a nationalised bank in india. it is a saving a/c.this a/c has no operation.

very small balance.some meagre amt of SB interest is credited by bank here in his NRE a/c.

is there any income tax regulation applicable to him?

is it advisable to close the a/c?

pl guide me

thanks

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3 Replies

Vineet (Director) 25 May 2013

Interest credited to NRE account is not taxable.

Only Indian sourced income of non resident is taxable in India. That too in case of individual, basic exemption of Rs 2 Lakh is available. So there is no need to close this NRE account. In fact your friend can deposit some more money here. India is in dire need of forex due to acute CAD.

R.V.RAO (retired) 23 February 2014

yes.int.on NRE a/c not taxable.

no need to close the NRE a/c.if possible remit some more money into the NRE a/c as advised.

Ms.Usha Kapoor (CEO) 31 August 2016

Dear Client,

WE have double avoidance tax agreement/ with US. Moreoever his income is sourxced from US and not from India. He is entitled To Tax exemption limit up to Rs. 2lakhs. So his NRE account is not closed although meagre savings bank interest is credited to his account and despite having little balance in his savings bank account.