Skip to main content

This is a new service – your feedback will help us to improve it.

  • RE: Tax on NRE Fixed Deposit on Maturity.

    Can you please answer specifically at the earliest as the time is running out fast for my the 31st Jan timeline ?
  • RE: Tax on NRE Fixed Deposit on Maturity.

    Hi, can you please clarify as I can not correlate fully my situaiton with example2. in my fixed deposits interest is not accessbile(withdrawable) before maturity unless the deposit is closed prematurely with penalty (loss of interest rate than the originally offered rate for the full tenure of maturity). Is it correct then to declare the interest as taxable income only at the maturity and pay the relevant taxes in the year of maturity when interest is received and accessbile for withdraw ? Thanks for your answer.
  • RE: Tax on NRE Fixed Deposit on Maturity.

    I have very similar quesiton, But if you need to pay the tax for each financial year(when interest is added to your FD but not received by you for access), then in some situation it may end up as UK taxes paid for some interest income you never received. for example, if you have a NRE FD started in 2020 for 5 years with interest rate of 6% (compound, no interest to be paid in bank account before maturity). Now, if you withdraw the FD prematurely after 4 years in 2024, then because of penalty and/or loss of interest (applicable for the entire duration since begining of the FD) you may get 5% interest ( if 1% interest loss due to premature withdrwal) which makes the effecitve interest as 5% for the FD). In this situation you have already paid taxes for some additonal interest amount which you will never receive ? So, in this case even with only penalty the full interest is not accessible before maturity. What is the correct timing to pay the taxes ? Only at maturity/renewal (or prematural withdrawal if done ) ?  : Please consider for your answer.
  • RE: Online SA timeline with 3rd party S/W, Interest income-NRE/NRO/Resident Indian banks

    *to better clarify question 2, I also understand for any tax year tax is not payable for the running fixed deposits for which no interest is paid in my bank account or no fixed deposit is reinvested for a new term or no premature closure is done. Thanks for your answer. kind regards, MS
  • Online SA timeline with 3rd party S/W, Interest income-NRE/NRO/Resident Indian banks

    Hi, Me and my family moved to UK in tax year 21-22 due to employer change and had UK employment income and some interest income from Indian bank accounts (NRE/NRO savings and fixed deposits) and previous foreign employment income (carried work/employment completely before moving to UK and eligible for split year treatment). I realized recently that for tax year 21-22 as my Indian bank Interests including Fixed deposits was more than GBP1000, I need to declare and pay any additional applicable taxes with a self-assessment. I know I am already delayed and registered for UTR few days back and waiting for the letter with the UTR number. I have the below three questions please answer separately for 1-3. 1. As per my knowledge so far on UK tax system/timeline, I have already crossed the timeline for paper self-assessment submission but still (after receiving my UTR) I can use third party software to include SA106/SA109 (foreign income and split year treatment) online with my SA100 and still be on time (without late submission penalty) if I can submit online my self-assessment return and pay all applicable taxes by 31st Jan 2023. Is this understanding, correct? 2. My Indian NRE bank account Fixed deposits are of type reinvestment of cumulative principal and interest after every maturity term (e.g 2,5 or 10 years). I understand this is taxable in UK whenever any interest is paid into my bank account or when cumulative (principal and interest) amount is reinvested for a new term or when any other interest is paid in my bank account e.g premature withdrawal of any fixed deposit before a full term completes. Is this understanding, correct? 3. Some of our other Indian bank accounts which I was late to convert as NRE/NRO account and were remained as resident Indian account in tax year 2021-22 as we did not travel to India for prolonged time due to Covid related risks and restrictions. I also received some interests in some FDs in those resident Indian bank accounts and paid all taxes and filed an income tax return declaring my Nonresident Indian status and received refund as my income in India was below taxable limits for nonresident Indians. Do I also need to include those earlier Indian resident type account interest in my UK tax return self-assessment? If yes, can I claim 15% tax credit for those also in UK as per tax sparring mechanism implemented in in UK-India DTC, I learned from some other discussion in this forum? Kind regards, MS