|Returning NRI's CORNER - Interest Received on RFC Accounts
if a returnee NRI's stay in India exceeds 181 days during the financial year of return, he will be a " Resident " in India during the said year. A financial year commences on 1st April & ends on 31st March. OR
His stay in India has been 60 days or more in that year, AND in the preceding 4 years, his total stay in India has been 365 days or more.
Said period of 60 days is raised to 181or more days for the benefit of and in case of
.01 An Indian citizen leaving India for employment outside India, and
.02 An Indian citizen or person of Indian origin i.e. an NRI residing outside India who is on a visit to India. It is important to note that the day of arrival and the day of departure are both included in number of days of stay in India.
However, if he has been :
A Not Resident in 9 out of 10 Financial Years preceding that year OR
Has not stayed in India for 730 days or more in 7 financial years preceding that year, than although a Resident, he will be treated as "Resident but Not Ordinarily Resident"
The returnee NRI was "Non Resident" as defined under the Income Tax Act, 1961, i.e. if his stay in India did not exceed 181 days in the preceding years OR
his stay in India has not been 60 days or more in that year, AND in the preceding 4 years, his total stay in India has not been 365 days or more before the date of return,
It is important to note that the day of arrival and the day of departure are both included in number of days of stay in India.
And thereafter, for a period or 2 years following the date of return, he will be treated as a ''Resident but Not Ordinarily Resident''
This may seen complex but the real complexities are yet to follow and hence those viewers who do not have track-record of not being entangled by the web-man alais " the spider-man " i.e. , viewers not having track-record of reading entangling provisions of complex Laws may from now onwards slow down - dangerous curves ahead!!
Sorry for the jokes but the matters are quite a bit complex indeed :
|4||Whereas an NRI returning for permanent settlement at the option of the returning NRIs is immediately required to transfer the funds held in NR(E) account to RFC account (if he is eligible to maintain RFC account).|
|And in case of FCNR(B) Deposits, returning NRI is granted permission to continue the same up till the date of maturity of the fixed deposits and upon maturity, funds held in this account is at the option of the returning NRIs required to transfer to RFC account (if he is eligible to open RFC account)|
|Now, In case returning NRI as stated above is Resident But Not Ordinary resident of India(RBNOR) (i.e. for a period of 9 years following the year of return) then, Interest income of RFC account is exempt from Tax.|