NRI status changed: Will NRE FD interest be taxable?
The interest earned on NRE fixed deposits earned by an NRI who has since moved to India and become a resident is taxable in India. According to Section 10(4)(ii) of the Income Tax Act, NRE interest remains exempt only if the investor remains a resident outside India under FEMA, 1999. When an NRI returns to India for employment, business, or to settle in the country, they become a FEMA resident from the date of arrival.
The 182-day rule does not apply to returns with the intent to stay. If the NRI's return triggers FEMA residency, any interest on NRE FDs earned after that point will be taxable at slab rates.
Written by urgent.news from The Economic Times's reporting — not their text. Machine-written — may contain errors; check the original before relying on it.
