If your total income taxable in India exceeds Rs 3,00,000; then you would be liable to file income tax return in India.
You need to change NRE a/c to resident rupee a/c on turning resident again. I was an NRI and returned to India in 2015. I have NRE rupee fixed deposit and a residential property which fetches a rent of Rs 5,500 per month. I am a senior citizen and there is no other income. Is the interest income from NRE fixed deposit taxable?
– Gautam Singhal
On returning to India, you have to notify the bank about the change in status from ‘Non Resident’ to ‘Resident’ so that NRE account is re-designated as a resident rupee account or the funds may be transferred to Resident Foreign Currency (RFC) account. Under income-tax provisions, the residents are classified as resident but not ordinary resident (RNOR) and resident and ordinary resident (ROR). Any person who is a resident, i.e., (stayed in India for 183 days or more in a financial year) and whose stay in India exceed 730 days in past seven years and who is a resident in at least two years out of last 10 years shall be considered a ROR. If any of these conditions is not fulfilled, he shall be considered RNOR. Assuming that you don’t comply with both these conditions, for FY 2015-16 and FY 2016-17, your residential status would be RNOR. The interest earned on a resident rupee account is taxable in India; however, interest earned on deposits in an RFC account is exempt under Section 10(15)(iv)(fa) till the period the individual is an RNOR. When you become ROR, then, interest income from this account would be taxable in India. If your total income taxable in India exceeds Rs 3,00,000; then you would be liable to file income tax return in India.
I am selling a residential building and getting capital gains of Rs 18 lakh. I plan to buy a new flat with sale consideration. Do I need to pay capital gains tax?
Since you will be investing full capital gains in the new flat, you will get deduction of the capital gain of Rs 18 lakh as per Section 54 and not be liable to pay tax on it. You are required to purchase the flat within two years of the date of sale. If purchase is not done before the due date of filing of your income tax return, then you need to deposit capital gain amount in the capital gain accounts scheme maintained with a scheduled bank in order to get deduction. Also, you are not supposed to sell the new flat before the expiry of three years from the date of purchase, otherwise capital gain exempted earlier would be taxed along with the gain of this new flat.
The writer is partner, Ashok Maheshwary & Associates LLP. Send your queries to