PIOs and Time Deposits

capt_mahajan · Sep 21st, 2007, 13:25

Goancanuck, you are correct. I got confused about the tax liabiliy with the old NRNR fixed deposits now discontinued. Also was assuming smaller amounts with no tax liability.

Am amending my post to avoid confusion. Thanks.

PS: One point. Though tax is deducted at source by 30% plus surcharges (total 33 or 34%), your income tax liability may be less than this, depending on other Indian income. For example, you could well manage an interest income of about 2 lacs annually (about 2.4 lacs, if you were a female) without any tax liability, provided you had no other Indian income.

Tax may still be deducted at source (or not, you have to submit a declaration with the bank/RBI to avoid this) but even if deducted, you would be eligible for a full refund, including interest on a delayed refund.

Sounds confusing, I know, but thats tax laws.

Nick-H · Sep 21st, 2007, 13:44

Thank you all for clarification on this complicated stuff. The Indian tradition of making an abbreviation out of everything doesn't help!

Anyway, I'm regarding it a disaster that I had money in UK when it would have bought lots of rupees compare to today's dismal (I guess that should read 'more normal') rate

.

But never mind. We can still afford plenty of Rs.12 rice!

capt_mahajan · Sep 21st, 2007, 13:46

Nick asked for glossary for NRO accounts, so I forgot to mention the most important thing:

HOWEVER

If you are remitting money to India, you are better off opening an NRE fixed deposit account (and NOT an NRO one).. in rupees.

NRE fixed deposit principal and interest is tax free. And it is fully repatriable.

Of course and once again, you have to be eligible to open this.

GoanCanuck · Sep 21st, 2007, 13:52

Quote:

Originally Posted by capt_mahajan

PS: One point. Though tax is deducted at source by 30% plus surcharges (total 33 or 34%), your income tax liability may be less than this, depending on other Indian income. For example, you could well manage an interest income of about 2 lacs annually (about 2.4 lacs, if you were a female) without any tax liability, provided you had no other Indian income.

Very true. Yet to pay any tax on the interest on my NRO account.

Nick-H · Sep 21st, 2007, 14:22

But, none of NR acounts apply to me. Because I am R.

Sep 21st, 2007, 13:44	#17
Nick-H Loud-mouthed, Noisy Bird Join Date: Oct 2004 Location: Chennai, India Posts: 25,831	Thank you all for clarification on this complicated stuff. The Indian tradition of making an abbreviation out of everything doesn't help! Anyway, I'm regarding it a disaster that I had money in UK when it would have bought lots of rupees compare to today's dismal (I guess that should read 'more normal') rate . But never mind. We can still afford plenty of Rs.12 rice! __________________ . Just one member of the IndiaMike Mod Team

Thread Tools
Show Printable Version Email this Page
Display Modes
Linear Mode Switch to Hybrid Mode Switch to Threaded Mode

Similar Threads
Thread	Thread Starter	Forum	Replies	Last Post
First time caller, long time listener	RichB	Packing Tips for India travel	3	Mar 9th, 2007 17:44
PIOs have chance to locate ancestral lineage	2cents	Indian Visa and Passport Questions	0	Jan 1st, 2007 19:03
Long time listener first time caller	fatboyron	Introduce Yourself	6	Oct 5th, 2006 19:07
Hello IM, long time listener first time caller!	travis08	Introduce Yourself	4	Jan 12th, 2006 07:20
Tsunami deposits Titanium Ore on TN beaches?	Bigzero	Tamil Nadu	0	Jan 14th, 2005 16:01

Sep 21st, 2007, 13:25	#16
capt_mahajan (in charge of navel affairs) Join Date: Sep 2005 Location: India Posts: 9,741	Goancanuck, you are correct. I got confused about the tax liabiliy with the old NRNR fixed deposits now discontinued. Also was assuming smaller amounts with no tax liability. Am amending my post to avoid confusion. Thanks. PS: One point. Though tax is deducted at source by 30% plus surcharges (total 33 or 34%), your income tax liability may be less than this, depending on other Indian income. For example, you could well manage an interest income of about 2 lacs annually (about 2.4 lacs, if you were a female) without any tax liability, provided you had no other Indian income. Tax may still be deducted at source (or not, you have to submit a declaration with the bank/RBI to avoid this) but even if deducted, you would be eligible for a full refund, including interest on a delayed refund. Sounds confusing, I know, but thats tax laws.

Sep 21st, 2007, 13:46	#18
capt_mahajan (in charge of navel affairs) Join Date: Sep 2005 Location: India Posts: 9,741	Nick asked for glossary for NRO accounts, so I forgot to mention the most important thing: HOWEVER If you are remitting money to India, you are better off opening an NRE fixed deposit account (and NOT an NRO one).. in rupees. NRE fixed deposit principal and interest is tax free. And it is fully repatriable. Of course and once again, you have to be eligible to open this.

Sep 21st, 2007, 14:22	#20
Nick-H Loud-mouthed, Noisy Bird Join Date: Oct 2004 Location: Chennai, India Posts: 25,831	But, none of NR acounts apply to me. Because I am R.

User Name		Remember Me?
Password