If I open a non-resident ordinary (NRO) account with an Indian bank, the withholding tax rate is 31.2% when the total interest earned on NRO deposits and savings accounts is less than ₹50 lakh. How would I know that the bank has deducted tax from my account? Will the deduction show in the account statement?
—Name withheld on request
The withholding tax rate for interest for non-resident Indians (NRIs) is 31.2% (30% plus 4% cess on it). However, there is no minimum threshold of interest income for tax deducted at source (TDS), which is deducted against a permanent account number (PAN). TDS should reflect in your Form 26AS, along with the interest income earned by you. This income must be reported in your income tax return to be filed in India. You can reduce TDS already deducted from the total tax calculated on your total income in India.
