NRE Bank Deposits: Worried about how much tax you might be paying ?? Check this out..
I think, all NRIs liable to pay tax on income on bank deposits etc from the year 2006-2007. Remember, tax will be deducted at source (TDS) i.e. Bank will pay interest only after deducting 22% Tax (as they do in UK (20%), even on one pound interest, 20p is deducted and 80p is credited to a/c). As far as I remember, NRI tax was postponed until April 2006. Who knows ? It may even futher postponed or abolished all together all we have to do is wait until the forthcoming budget session. Most of us have Fixed Deposit a/c already which were opened say before Aug. 2003 where the prevailing rate of interest was around 10%..See Table III e.g. if u have Rs.10 lacs u will now have to pay TAX about Rs.22,000 (see tables for other amounts & rates) Now, the same rate is around 5.5% (Last 2 years it was around 1.8% -3.5% see table II) Tax implications are shown separately in Table I, II & III. e.g. If Interest earned on Rs.10 lacs is 55,000 then tax would be Rs.12,100. It is also assumed that each a/c is NRE individual A/c . Table I (with current Interest rate & Tax payable next year) Fixed deposit 5.5% Int. TAX you Amount Earned Might Pay 25,000 1,375 302.5 50,000 2,750 605 75,000 4,125 907.5 1,00,000 5,500 1,210 1,50,000 8,250 1,815 2,00,000 11,000 2,420 3,00,000 16,500 3,630 4,00,000 22,000 4,840 5,00,000 27,500 6,050 6,00,000 33,000 7,260 7,00,000 38,500 8,470 8,00,000 44,000 9,680 9,00,000 49,500 10,890 10,00,000 55,000 12,100 15,00,000 82,500 18,150 20,00,000 1,10,000 24,200 Interest rate as on 22.01.2006 See below table II & III (MSword file) for interest rate such as 3%, 5.5% (& 10% for deposits before Aug 2003) All above info is just for reference only for common man (not professional services) All Figures in Rupees and approximate. Worked out on simple interest only. Compounded interest will be more so will be the Tax. All tables are my own (not taken from anyone or anywhere) there could be some errors/omissions etc For futher clarifications etc, you may forward this to your banks and let me also know their comments etc. ----------------------------------------- For any financial services including saving tax etc. please come and see me. I am at your service. My commission is only 2% on the amount appears in column 1 above. Seek advise only if you have deposits of one lac and above. NO REFUND GIVEN ------------------------------------------- Did you cast your vote yet ? If no, please click here.. http://in.groups.yahoo.com/group/GOAN-NRI/polls Click below for MSword file tables etc and then choose 'Bank Deposit n TAX' http://in.groups.yahoo.com/group/GOAN-NRI/files/ [EMAIL PROTECTED] for Goa & NRI related info... http://in.groups.yahoo.com/group/GOAN-NRI/ for Goa & Goa Flights info.. http://uk.groups.yahoo.com/group/LetsGotoGoa For info on Konkani VCDs etc ___________________________________________________________ Win a BlackBerry device from O2 with Yahoo!. Enter now. http://www.yahoo.co.uk/blackberry
