I am an NRI working in US for past 4 years. I have recently settled my provident fund obtained for the job earlier done in India. I have an NRE account. Can I deposit the money in the NRE account? Will this be taxable? The settlement statement shows that tax on it is already deducted since the service was less than 4 years. Please let me know if I can deposit the amount in my NRE account .

--- Radhika

I have a NRE Account and  I am aware that Interest earned on NRE Fixed Deposit is not taxable in India  BUT, Could you please let me know whether the interest earned on "NRE Recurring Deposit" is taxable in India.

What is the minimum tenure for which I can open a NRE Recurring Deposit?

--- Vipul

I want some more help to clarify my doubts.

First the big one is that presently I have around 3 lakhs here in Kuwait Bank.

I want to send all these before these account conversion procedure finishes as the exchange rate has increased .

So if I send 3 lakhs today in my saving account, will there be any TAX cut from that? Please clarify at the earliest.

--- K S Dani

I am planning to sell it next year (2007). As per the recent RBI notification (Nov. 16, 2006), looks like the 10 year 'lock-in' period for repatriating acquisition costs AND gains has been removed.

Questions:

a) Please confirm that this is in immediate effect

b) If I sell the property and if there is "white" value and a "non-white" value how we can legally repatriate the total proceeds from the sale c) Is the limit of 2 residential properties still valid (for selling and repatriating).

d) Is the capital gains tax when selling property is same for both long and short term gains?

--- H Venkatam

I am an NRI and now applying for British citizenship. What happens to my property (including agriculture farms) that I am inheriting from my parents? Is it a problem to keep an inherited agriculture property with an OCI STATUS?

--- Prashant.Bhardwaj

The NRE account can be opened and maintained by remitting funds through normal banking channels in freely convertible currency from abroad or by transfer of funds from NRE or FCNR accounts. The PF funds are originated in India and therefore cannot be credited to the NRE account. You should credit these funds to your NRO account.

The interest on all types of NRE accounts is tax-free in India in the hands of an NRI.

If your status for the Financial Year ‘April-March’ is NRI and if the money earned abroad is an income not arisen out of some nexus with India, either by way of Indian employment or business, the question of levying tax thereon does not arise. Transfer by itself does not create any tax-liability.

1. Yes, the 10-year lock-in will not be applicable to you when you sell the property.

2. “Non-white” cannot be repatriated.

3. You can sell any number of properties but only the amount of forex applied to purchase two residential properties can be repatriated. This restriction hasn’t been removed.

4. Short-term capital gains are taxed as normal income and long-term gains with indexation are taxed @20%.

Obtaining OCI status gives you additional rights and privileges over and above the ones you enjoyed in your capacity as a Person of Indian Origin. You had a right to own and maintain inherited agricultural property and therefore, you continue to enjoy this right. However, if and when you decide to sell or gift away the property, note that you can do so to a Resident Indian only and not to an NRI or PIO.