Posted on: 20-09-17 07:16:48
My brother is in Canada on PR and holding valid Indian passport. He has PAN Card but no Aadhar Card in India.
He has resident saving accounts in a few banks in India.
He wishes to convert them into NRO accounts as he has interest income on deposits & other income in India.
He has been asked by the banks to fill out relevant forms and send required documents.
The tax rate on interest earned on NRO deposits is 30.9% compared to 10% on interest on Resident deposits. This is quite high as almost 1/3rd of his interest income will be gone in tax and claiming refunds from tax department later could be difficult.
He has been informed by banks that if he continues to hold the existing resident saving & Deposits accounts, they will be frozen / blocked after 31st December 2017 if Aadhar card is not linked.
Please advise the best options for him in this situation.
Quote:
Originally posted by new_migrant
My brother is in Canada on PR and holding valid Indian passport. He has PAN Card but no Aadhar Card in India.
He has resident saving accounts in a few banks in India.
He wishes to convert them into NRO accounts as he has interest income on deposits & other income in India.
He has been asked by the banks to fill out relevant forms and send required documents.
The tax rate on interest earned on NRO deposits is 30.9% compared to 10% on interest on Resident deposits. This is quite high as almost 1/3rd of his interest income will be gone in tax and claiming refunds from tax department later could be difficult.
He has been informed by banks that if he continues to hold the existing resident saving & Deposits accounts, they will be frozen / blocked after 31st December 2017 if Aadhar card is not linked.
Please advise the best options for him in this situation.
Right now convert them to NRO. Then repatriate the NRO money to Canada.
Then send the money back from Canada in CAD dollars to a NRE account. There will be No tax in the NRE account. If you want to go that route.
You will lose in exchange rate both ways - INR to CAD and back to CAD to INR.
Its NOT hard to get NRO- 30.9 % TDS interest money back from the Indian IT dept. Nowadays its all efiling and in a couple of months you get your money back via Direct Deposit. The Indian IT dept. has improved a lot in this regard.
I have NRO accounts and have had NO problems getting my TDS back. You can efile the IT return yourself or an Indian CA will do it for less than Rs. 2,000 for you.
They don't bother you anymore as in the past, since MODI has arrived. The corruption & harassment has gone down considerably.
His Indian resident accounts are basically illegal , the moment you become a foreign citizen, PR or even NRI for that matter you are supposed to convert resident accounts into NRO.
Thanks for the information.
However we understand that principal amount of NRO deposits cannot be repatriated abroad.
Only interest earned on NRO deposits on which tax @ 30.9% has been deducted can be repatriated subject to maximum of INR 250,000 in a financial year.
Please guide.
I got to find out from two reliable sources that there are possibilities to withdraw monies from NRO Accounts in India and The RBI has allowed it, as TRANSFER from NRO to NRE.
I have not explored the details provided to me extensively. Also, how far the Banks will go and which banks are in the knowhow and are willing to help you accomplish the same, these are the facts that needs to get brought about.
The links are provided to you below and please do drop us a note if you were able to get it done easily. Half these guys who have never helped anyone there will pull wool over your eyes at the transaction counters.
Good Luck.
FH.
RBI permits to transfer NRO Rupee Accounts to NRE External F/C Account.
https://www.hdfcbank.com/htdocs/common/pdf/FEMA_Declaration.pdf
Article..: http://nareshco.com/blog/?p=8
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Quote:
Originally posted by new_migrant
Thanks for the information.
However we understand that principal amount of NRO deposits cannot be repatriated abroad.
Only interest earned on NRO deposits on which tax @ 30.9% has been deducted can be repatriated subject to maximum of INR 250,000 in a financial year.
Please guide.
How to activate a DORMANT (Inactive) Account..:
There is no uniform rule that all the banks follow. Each one has their QUIRKIES and they all want some thing different. Imagine a Bank making it MANDATORY to have an OCI/PIO card??!! Cuckoos. In a few years, they will say, you will have to land a JET in their back yard and you must have a PILOTS Licence.
Anyway be aware of a few details and see a link or two and please add to this as time progresses to get the whole pile of requirements and the funnies to go with them.
Hope this helps a few.
FH.
HDFC..: https://www.hdfcbank.com/htdocs/common/pdf/customer_updation_kyc_nri_Form.pdf
SBI..: https://www.sbi.co.in/portal/web/personal-banking/kyc-documents-individuals
ICICI..: https://www.icicibank.com/nri-banking/faq/accounts-and-deposits/opened-new-nri-account-with-icici-bank-inactive-or-dormant-accounts-faqs.page?
Quote:
Originally posted by new_migrant
Thanks for the information.
However we understand that principal amount of NRO deposits cannot be repatriated abroad.
Only interest earned on NRO deposits on which tax @ 30.9% has been deducted can be repatriated subject to maximum of INR 250,000 in a financial year.
Please guide.
The entire amount including the principal can be repatriated abroad.
You might have to fill up a form called 15CA and 15CB from your CA and give it to the bank. It shows you have paid tax on that amount and you have clearance from Income Tax department.
For lot of remittances from NRO you don't need 15CA & 15CB, so you can just repatriate it abroad.
NRO to NRE is also allowed under certain circumstances.
Source of Funds has to be accounted for when repatriating from NRO
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