Is NRE FD interest taxable?

 Non-resident Indians usually rely on Non-Resident External or NRE Accounts to park their foreign earnings in India. These accounts allow NRIs to transfer a portion of their overseas income to their home country while providing a great avenue for investments as Fixed Deposits. NRE FD is an extremely popular investment tool among NRIs due to their tax-free status.

You can open it in foreign earnings if you have an NRE Account in the same bank. They fetch you higher returns than resident accounts in India, with fully and freely repatriable interest and principal amounts.

Is the interest taxable?

According to the Indian tax laws, NRIs are liable to pay income tax in the country only on that income accrued in India. Since the NRE Account holds income earned overseas, it remains completely tax-free in India. It means that both interests earned on the NRE Fixed Deposit and Savings Account are not taxable as per the provisions of Section 10(4)(1) of the Tax Act, 1961.

FEMA guidelines

The primary eligibility criteria to maintain NRE FD Account and earn tax-free interest income is that you should qualify as an NRI under the Foreign Exchange Management Act. It guides whether you can invest in an asset or not. For instance, you can open an NRE Savings Account only if you qualify for it as per FEMA.

A person can be considered a ‘resident outside India’ if their stay in India was for less than 183 days during the preceding financial year. NRIs permanently settled or residing out of India continue to be treated the same under FEMA regardless of the duration of their stay in India.

When does the account attract taxes?

As FEMA considers returning NRIs as resident Indians from the first day, they should discontinue their NRE Accounts. You must change it to a resident account or transfer the funds to the Resident Foreign Currency Account immediately upon your return to India for an uncertain period.

You enjoy tax-free interest income on them only till you qualify as a resident but not ordinarily resident for up to three years to help you shift assets from abroad to India without attracting huge taxes.

Availing tax exemption

When you open an NRI FD Account in India, you need not file income tax returns if your Indian earnings consist of only the tax-free income and TDS deducted. You file ITR only when the total income you earn in India is higher than the maximum amount of INR 2.5 lakh exempt from tax.

Those planning to invest in NRO FD should remember that the interest income earned on these accounts is not tax-free. NRO Deposits hold rates in Indian currency and interest rates applicable to these vary between banks. Repatriation of principal investment is not offered but interest earned can get transferred to a foreign account.

Why Is Opening an NRE or NRO Account Important?

 A non-resident Indian according to RBI cannot open and operate a traditional resident Savings Account. They should be changed to an NRI Account by the bank before gaining an NRI status. An NRI needs to open a Non-Resident External or Non-Resident Ordinary Account to conduct any banking transactions in India.

The NRI or PIO (Person of Indian Origin) can open an NRE or NRO Account, or both, based on their transactional needs. As an NRI, your financial management and planning would be significantly impacted once you open NRI Account online. Even your standard account in India is subject to new laws and regulations. If you are wondering if you can continue holding a resident account in India once you earn NRI status, the answer is no.

Importance of NRE or NRO Accounts

An NRI cannot create or manage a standard resident Savings Account in India, according to the regulations of RBI. As soon as your residential status changes, the account you own should change to an NRI Account. To manage any banking transactions in India after becoming an NRI, you should open an NRE and NRO Account. NRIs should open these accounts to further deposit their foreign earnings and any domestic profits like rent, fees, dividends, pensions, etc.

The NRI interest rates on your deposits in the NRE Account are tax-free and freely remittable to your home country because they get generated outside of India. The interest accumulated in an NRO Account is taxed, though.

Tax Deducted at Source applies to the interest at 30%. Also, the maximum amount that can be repatriated is USD 1 million per financial year. It is of utmost importance to open an NRO Savings Account or convert your current account into an NRO if you are an NRI with income in India. Once you have effectively opened an NRO Account, you can easily manage and organise your revenue from India.

Lastly, do not forget to deposit and save funds in your NRE Account once you have decided to move abroad. Although it is not required, the purpose to open these NRI Accounts is to maintain your local savings under your name.

Conclusion

NRO Accounts may be more practical if you frequently deal with investments in India and continue receiving credits from income sources within India. NRE Accounts rank better concerning simplicity and tax-exempt status. After considering the mentioned aspects, NRIs should make an informed decision regarding opening an NRI Account.

A brief overview of Agri Loans

 Agriculture is the backbone of the Indian economy. With over 60% of the Indian population employed in the agricultural sector, it is vital to provide them with the necessary financial support to boost production and increase income. This is where Agri Loans come into the picture.

Agri Loans are financial products specifically designed to meet the credit needs of farmers, agriculturalists, and other allied activities. They are offered by various financial institutions, including banks, cooperatives, and non-banking financial companies. The following are a few things to know about such Loans:

• Types

Agri Loans can be classified into three categories based on the purpose for which you avail them of:

Production Loans: These are used for meeting the working capital requirements of farmers. This includes purchasing seeds, fertilisers, pesticides, and other inputs required for farming. These loans are usually short-term loans with a repayment period of six to twelve months. However, it is wise to check this with the lender beforehand.

Investment Loans: Such Loans are used for purchasing machinery, land, or for other capital-intensive activities related to farming. They have a longer repayment period of three to five years, and the interest rates are usually lower than Production Loans. An example of such a Loan includes an Agri Gold Loan where farmers can take borrow money against their gold.

Allied Activities Loans: These Loans are mainly used for activities other than farming. This includes activities like dairy, poultry, fishery, and horticulture. They have a repayment period of up to five years.

• Features

Like Personal Loans, Agri Loans also have a range of features that make them attractive to farmers. Some of these features include:

1. Easy availability: Agri Loans are readily available from various financial institutions, including banks, cooperatives, and NBFCs. This makes it easy for farmers to access credit when they need it.
2. Low-interest rates: The government of India has introduced various schemes to provide credit to farmers at lower interest rates. This includes the Kisan Credit Card Scheme, which provides credit at an interest rate of 7% to 9% per annum.

• Flexible repayment options: Such Loans come with flexible repayment options, which include monthly, quarterly, half-yearly, or yearly instalments. This allows farmers to choose a repayment schedule that suits their cash flow.

1. Collateral-free: As it is with an online Gold Loan, many financial institutions offer Agri Loans without the need for collateral. This makes it easier for farmers who may not have assets to pledge as collateral.

• Insurance

Many Agri Loans come with insurance cover, which protects farmers against crop failure, natural calamities, and other risks. However, it is wise to check this offering on your Banking app beforehand.

• Moratorium period

In most cases, such Loans come with a moratorium period. This allows farmers to repay the loan after the harvest season when they have generated income.

What are the various items you receive upon Savings Account opening?

 Earlier, most individuals saw Bank Accounts simply as an instrument to secure their money. However, today is considered the core of every banking activity. You need it to make and receive fund transfers. Bank Accounts are of various types. Savings Account is an account that everyone should consider opening.  It is an interest-bearing account. It takes care of various banking requirements hassle-free.

You can opt for an online Saving Account opening with any leading bank. Typically, it is best to open an account with the bank offering the highest interest rate, while having a low minimum balance requirement, and charges. You receive various details on account opening and following is a list of them:

Account number

Your Savings Account number is the most important information piece you receive on account opening. It is the primary identifier of your account. Every account holder receives a different account number, no two account holders share the same number. Depending on the bank you have opened an account with you will receive either a 12-digit or 14-digit account number. The account number is mentioned in bold in your welcome letter. It is also printed on all cheques.

Bank branch details

You also receive information about your bank branch. You learn about the branch’s official name and identification code. Knowing your bank branch details is necessary. You need these details when making an International Money Transfer. Hence, make note of it. Furthermore, if you need to make major changes to your account, like closing it, you need to reach out to your bank branch for the same.

Debit Card number and PIN

Almost all leading banks offer a Debit Card upon opening the account. You can use the Debit Card to make both offline and online transactions. You receive your Debit Card with the welcome letter. You can find the Debit Card number printed on the welcome and on the card too. The Debit Card PIN is mentioned. Since this PIN is generated by the bank, you need to set a new one for further usage.

Memorise your Debit Card number and PIN as you need to enter them at various checkpoints to make a transaction.

Online Banking login credentials

Online banking has become a preferred way of banking for all. It is simple and time-saving. Whether you wish to make a fund transfer, pay utility bills, make repayments, invest, or apply for credit you can do it all online. Typically, every bank has two Online Banking platforms, one the net banking portal and the other is the Banking App. You need login credentials to access both platforms.

Generally, most banks offer the credentials like user IDs and passwords with welcome letter. Note, the login password is only for one-time use. Once you have successfully logged in, you should set a new password for yourself.

How to save money through Savings Account?

 The banking and financial sector has transformed entirely. However, the Bank Account remains at the core of all operations. You need a Bank Account to meet any requirement no matter how small or big it is. A plus point is you need not travel to the bank to access your account. You can open and operate your account from anywhere at any time using the internet. There are various accounts to open. Consider your requirement to open a suitable account.

Savings Account is an account that everyone should strongly consider. The account serves two purposes, saving and interest earning. You can park your money securely in the account and earn a competitive interest rate on your deposits. Following are some tips to save money through Savings Account:

List the definite goals

One common mistake that every individual makes with saving, is not having a definite goal in mind. Think about it unless you know the destination you would like to arrive at, how will you drive up there? Have a definite saving goal in mind, think of the time period you would like to achieve it in. This will help you chalk out a clear plan of action.

Open multiple accounts

You must consider opening multiple Savings Accounts. This way you can assign one account to every saving goals you may have. This works very well. You are able to focus on attaining your goal single-mindedly. Furthermore, opening multiple Savings Accounts allows you to earn higher interest income. Scout for the best Savings Account interest rates and open two or more accounts today!

You should also have a separate account for your daily transactions. This will ensure you do not end up using your savings to meet your daily expenses.

Maintain the minimum balance requirement

Savings Account follows the concept of minimum balance requirement. You need to maintain the minimum balance requirement always. The main idea behind following the minimum balance requirement is to encourage you to save and curb unnecessary spending. Hence, you should try to keep up with the minimum balance requirement always. That’s the bare minimum you can do.

You are liable to pay a penalty in case of non-maintenance. The penalty amount increases with repeated instances of non-maintenance. Keep up with the minimum balance requirement to avoid paying such high penalties.

Contribute to your account 

Keeping up with the minimum balance requirement is not enough to save. Actively contribute to your account to attain your saving goals. Make it a point to deposit a fixed amount to your Savings Account every month. You can contribute to your account by making an online transfer via a Banking App in no time. Do it today!

Link your Savings Account to your investments. This way, your investment returns get deposited swiftly. This also ensures the safekeeping of your money.

How to Send Money From India to Canada?

 You travel from India to foreign countries in search of better opportunities and a better lifestyle. We leave our families here but do not forget to fulfil our responsibilities towards them. As they depend on us for everything, we must fulfil their demands despite being in a foreign land. Therefore, you look for the best ways to send money from Canada to India at low exchange rates for Canadian Dollars to Indian Rupees.

Fast, smooth, and convenient ways to convert currencies are available online, saving time and effort. Follow these steps:

Signing up

The process of signing up for remittance websites is easy and free. You can also use the app to send money to India for unlimited access and convenience on the go. It is available on the Apple App Store and Google Play Store, making it easier to download and use at any time of the day.

Verifying identity

Security and efficiency are the focus of money transfer companies. Verify your identity quickly and easily to start a money transfer from US to India in no time. You also gain the advantage of earning bonuses and other points upon signing up.

Adding recipients

Banks enable you to transfer funds directly to India. They are quick, convenient, and offer access anywhere, including your home. They allow you to send money to your loved ones even during emergencies and urgent fund requirements, whether at work or elsewhere.

Payment methods

You can use several payment methods to send money to India from Canada. Load your wallet on the money transfer app from your Bank Account using Debit Cards or Online Banking methods. Use these funds for the transfer by entering the beneficiary details correctly.

Exchange rates

Confirm the updated exchange rate and fees, if any. You should view and enquire about all this information beforehand to avoid financial losses. Get a clear idea of all the terms, conditions, charges, and transfer limits. The exchange rates fluctuate between countries during the money transfer to India from Singapore.

Transfer speed and time

Some banks take a few hours or even days to complete the process with time limits. The shorter the duration, the better it is, as it helps your loved ones meet emergency requirements. You also get access to Canada to India money transfer directly to the recipient’s Bank Account.

Receipt

After you send money from Canada to India, collect the receipt or download it online on your smartphone. It holds all the details about the transfer, including the names of the issuing party and the person receiving the document, the transfer description, the date of the issue, and its purpose.

Send money globally 24x7 and instantly in over 20 currencies with live exchange rates.

A Beginner’s Guide to NRE Accounts

 Moving abroad garners many changes. This includes how you handle and manage your money through banking. For instance, you cannot rely on your resident Bank Account for everyday transactions. You must either opt for a new one with a foreign banking partner. You could also convert your old account into a Non-Resident Indian Account.

An NRI Account is meant for NRIs. It allows them to park their foreign earnings safely. It facilitates their banking and investment needs once they move away from India. Such an account comes in three distinctive types:

1. Non-Resident External Account
2. Non-Resident Ordinary Account
3. Foreign Currency Non-Resident Account

Out of these, let us discuss the aspects of an NRE Account. Following is a quick guide on it.

• Rupee-denominated

An NRE Account is Rupee-denominated. This simply means that it maintains your deposits in Indian Rupees. The function stays consistent across all types of such an account. For example, it does not matter if you hold an NRE Current or NRE Fixed Deposit. Your funds will be retained in Indian Rupees regardless of the type.

• Fund maintenance or transfer

You can hold funds received from another country in your NRE Account. The same goes for transfers obtained from another NRE or FCNR Account maintained in India. Also, it is possible to transfer money from your NRE Account to an NRO Account. The process involves no restrictions or extensive formalities.

• Repatriation

This account offers you full repatriation. You can freely transfer the funds in your Bank Account to another country or another NRI Account. Therefore, many NRIs with financially dependent families open an NRE Account online. It allows them to send money to India without any hassles.

• Conversion

Many Indians move overseas for a brief period. When they come back, they get the option of converting this account into a regular resident account. The procedure for this conversion, however, varies from bank to bank. Hence, it is best to check the guidelines for conversion beforehand.

• Joint holding facility

At times, you might want to open an account with a family member living overseas. Considering this, an NRE Bank Account offers you a joint holding facility. You are allowed to hold the account jointly with another individual. However, the co-holder must be an NRI. Else, they cannot avail of this facility.

• Taxation

The most appealing aspect of an NRE Account is its taxation policy. Interest earned on deposits in this account is exempt from taxes. This benefit is enjoyed by all, NRE FD, Savings, and Current Account holders. That way, everyone with this account gets to optimise their interest earnings without any worries.

• Transfer rules

A resident power of attorney cannot open an NRE Account on the NRI’s behalf. However, they are permitted to make local rupee payments and transfers on the NRI’s behalf. There is no imposition on such transactions.