Answer Book question
Generally, existing NRE FDs may be allowed to continue until maturity at the contracted rate, after which they must be converted to resident deposits (or RFC). Interest from the date you become resident is taxable. Confirm with your bank; practice varies on the details.
Generally, existing NRE FDs may be allowed to continue until maturity at the contracted rate, after which they must be converted to resident deposits (or RFC). Interest from the date you become resident is taxable. Confirm with your bank; practice varies on the details.
A ₹20 lakh NRE FD at 7.5 percent with 18 months left. The bank lets it run to maturity; the returnee declares the post-return interest in his return. On maturity it becomes a resident FD.
The deposit contract survives the status change; the tax treatment does not.
Maturity date Bank policy Tax declaration from return date Whether premature closure and RFC conversion is better for you
Continuing to treat the interest as tax-free.
Common situation; a CA handles the split-year computation.
Run to maturity; declare 18 months of interest; convert.
If you want foreign currency retained, converting to RFC may be preferable.
Confirm with the bank Note the tax split Convert at maturity
What happens to my NRE account when I return to India? What is an RFC account?
NRIs & returning Malayalis
RBI FEMA regulations on NRE/NRO/RFC accounts · Income Tax Act residency provisions · SEBI/AMFI rules on NRI investment · NORKA Roots schemes · Kerala Rising is not a tax adviser; residency and tax questions need a CA Rates, limits and whether you may qualify change. Confirm with the official source. Ask Kerala Rising: Tell us your return date, which accounts you hold, and whether you still earn abroad. We will give you the housekeeping list and flag what needs a CA. WhatsApp +1 443 595 9000 · keralarising.com Kerala Rising › NRI · NRI 4
This page is general orientation, not personal insurance, investment, medical, legal, lending, tax, or professional advice. Rules, rates, benefits, and claim or application decisions can change. Confirm the current position with the named official source and use a licensed or qualified professional where your situation requires one. Kerala Rising does not decide whether you may qualify, approve claims, or promise an outcome.