Nri income tax

The query is not fully comprehensible. However it appears none of the queries is related to income tax.

1st quey:"I am not sure what is the corrective step of action; do I close all my fixed deposits which are in saving account and transfer to NRO and open new FD’s? Or leave them and let them mature and ensure new FD are opened in NRO?" - better ask the Bank.

2nd query:"I have also few deposits as corporate deposits which is maturing next year which I invested in 2010 but declared as a local resident which I feel it is wrong. I have stopped making any new corporate deposits, all corporate deposits mature in 2013";-  What exactly is the problem here?

3rd query: "Last question relates to my PPF account which I opened in 2002, as I understand it has matured in 2012 and I cannot make any  further investment, however I can choose to keep it open for another 5 yrs with a small deposit of Rs 500 every year, please advise if my understanding is correct." This depends on the PPF Rules, and not directly with income tax matters.

Hello Sir

Many thanks for replying back, appreciate your help and advise

My understanding was that since being an nri i have opened the fixed deposits in the incorrect account which is saving account, the income tax officials will not agree and harass me, so I was asking is that possible. I have asked my bank but they said its up tpo you if you want to terminate early and reinvest in nro account but i will loose interest. If there is no tax implication or harassment then i will hold the deposits till they mature, what would you suggest ?

The second query relates to the first one where i am an nri and i have opened corporate deposits and i have not declared myself as nri to the issuer.

Thanks again

Your statement, "... i have opened the fixed deposits in the incorrect account which is saving account", is difficult to understand. How could you open FD A/cs in SB A/cs? Do you mean to say that you opened ordinary SB A/cs, deposited cash into it  and from there transferred funds into FD A/cs? Income tax authorities will not harass you so long as you can fully & convincingly explain the source of the funds deposited into the SB A/c; however it has to be examined whether you have violated the FEMA provisions.

Thank you sir

Since the time I moved to Lodon ( 5 years), I had not changed the status of my saving account to NRO. I used another NRI account with another bank for making money transfer. So money has always been transferred from NRI to saving account and then fixed deposits were open. 

YOUR QUERY: Since the time I moved to Lodon ( 5 years), I had not changed the status of my saving account to NRO. I used another NRI account with another bank for making money transfer. So money has always been transferred from NRI to saving account and then fixed deposits were open. 

REPLY: From your replies it is presumed that:

(1) you have an ordinary SB S/c in Bank-A;

(2) You have an NRE A/c in Bank- 'B'

(3) Your foreign income used to be credited in yor said NRE A/c;

(4) From the NRE A/c funds have been periodically transferred to the Ordinary SB A/c;

(5) From the Ordinary SB A/c, fund have been transferred to FD a/cs.

If these facts are correct & you can prove these facts, the income tax authorities will have no problem with you, except that you will have to pay tax on the interest from the Ordinary SB A/c, and from the FD A/cs, as all these are of the 'ordinary' resident status.