I relocated out of India some time back. For saving purpose i transfer money from my account here in Singapore back to Indian account( savings account). Now this money is taxable.
My question is if I open NRE account, will the money i transfer into NRE account be taxable too?
Also, all my EMIs and SIPs are linked to my existing savings account, So if I transfer money from NRE account to existing saving account will that also be taxable?
A NRE account is tax-free , including no income tax, no wealth tax and no gift tax in India for any amount of money transferred to your NRE account . There is also no tax on interest earned on a NRE account , as long as you pay taxes on the income you are earning abroad, money transferred into India is not taxable
Ideally a NRI cannot have both NRE & Savings Account technically, but please check with Bank once for the Norms and Taxation
The money deposited in NRE account is not taxable in India but is taxable in your country where you are living.
In your case, it should be taxed in Singapore before you deposit it in Indian NRE bank account.
Thanks Romit for replying. So as I learned my existing saving account will be changed to NRO. However the question remains wether the amount transferred from NRE account to NRO account is taxable or not
Thanks Anil, Yes I do pay tax in Singapore.
You meed to understand that ‘interest’ is taxable in India if you earn it in NRO account.
NRE deposit and interest are not chargeable tax in India.
If you deposit money from NRE to NRO, then nobody cares as you would have already paid tax on amount before depositing it in NRE account.
Does that make sense?