I have become a UK citizen now and am staying in London. Can I continue Public Provident Fund’s (PPF’s) till maturity? Can I continue investing in my PPF account even if I come back and stay in India on a British passport?
Under the PPF scheme, NRIs are not eligible to open a PPF account. However, a person residing in India who already has a PPF account and subsequently becomes an NRI may continue to deposit funds into his existing PPF account. So, you can continue contributing to your existing PPF account, while you are staying in London and also on returning to India on a British passport till its maturity only. On maturity, you cannot remit proceeds of PPF withdrawal out of India. But if the proceeds are credited in an NRO account, balance in the account can be repatriated abroad up to $1 million per financial year.
I am a non-resident Indian (NRI) living abroad for the past 10 years. If I remit money to a bank account in India, do I need to pay tax on the interest earned? If yes, how do I pay for the same? I have a Permanent Account Number (PAN) and proof of residence abroad.
Any income earned or received in India is taxable in India, including interest earned on the amount kept in bank accounts here. But there are certain exemptions available under the tax laws:
1) Interest earned on non-resident external (NRE) rupee account (savings or fixed deposit) is exempt from tax if you qualify as a person resident outside India under the exchange control law.
2) Interest earned on the deposit in foreign currency non-resident (FCNR) account is tax exempt if you qualify as a non-resident or not ordinarily resident in India under the India income-tax law.
3) Interest earned on non-resident ordinary (NRO) rupee account (savings or fixed) is fully taxable. A deduction till Rs.10,000 may be claimed for interest earned on savings account while filing the tax return in India. Interest is taxable at progressive rates ranging from 10% to 30% (excluding surcharge and education cess). The maximum marginal rate is 35.535%. You are required to file an income-tax return and pay taxes in India only if your total taxable income exceeds Rs.2.5 lakh. We would recommend to check the type of account you hold in India to determine the taxability of the interest income. You may pay the applicable taxes online at https://www.tin-nsdl.com/.
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