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How can NRIs Avoid Tax Troubles by Opening NRE Savings Account?
Posted on Monday, February 28th, 2022 | By IndusInd Bank
If you are an NRI but have strong financial and family ties in India, managing the flow of money could be a tricky part. Many Non-resident Indians have their utility bills and house EMIs to pay in India while living abroad. Some might be making additional money through renting out their homes in the country. Managing finances and avoiding tax trouble is undoubtedly a priority on their list. An NRE account could be a solution to all their finance management woes. They can deposit earnings in the NRE account and withdraw the money in rupees to manage expenses in India. The best thing about an NRE account is that you can fully repatriate the amount held in an NRE account. This article is all about the benefits of an NRE account and other ways to save tax:
Benefits of NRE Account
Tax Exemption
The interest earned on the principal amount is tax-free.
Good for Investments
Account owners can use the funds deposited in NRE account for making investments in India. Be it mutual funds or equity; it is easy to get started smoothly.
Ease of Transferability
Account owners can transfer the principal amount and interest earned from the NRE account to another account in a foreign bank. Also, they can transfer funds from one NRE account to another NRE or NRO account.
Easy Withdrawal
Account holders get an international debit card with an NRE account, which can be used to withdraw money anytime. They can also access online and mobile banking services to manage money easily.
Other Ways to Manage Tax Deductions
Get a PAN Card
A Permanent Account Number is the identification of the taxpayer in India. It helps prevent tax fraud, and one needs a PAN number to claim an income tax refund. However, if you do not have a PAN number, you will likely pay a higher tax amount for investments and earnings made in the country.
Pay and Claim Home Loan Interest
NRIs can claim tax deductions related to their property in India. For instance, paying the interest on a home loan or property tax makes you eligible for a tax deduction. Thus, it makes sense for NRIs to invest in a property in the country.
Final Words
Tax Deduction at Source (TDS) is a significant pain point for NRIs. There are many ways to save on taxes, and opening an NRE account is the first step to strategically planning your investments, earnings, and spending. You can open an NRE account with IndusInd Bank to enjoy a competitive interest rate along with tax-saving benefits. With their many features and unmatched customer service, banking within or outside the country will always be a hassle-free experience.
Disclaimer: The information provided in this article is generic in nature and for informational purposes only. It is not a substitute for specific advice in your own circumstances. Hence, you are advised to consult your financial advisor before making any financial decision. IndusInd Bank Limited (IBL) does not influence the views of the author in any way. IBL and the author shall not be responsible for any direct/indirect loss or liability incurred by the reader for taking any financial decisions based on the contents and information.
