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WelcomeNRI.com is being viewed in 124 Countries as of NOW.
Interest on deposit in NRO account subject to TDS

And there is no threshold limit in the case of a non-resident

Q. Will tax deducted at source (TDS) be applicable on the interest paid to a non-resident ordinary (NRO) account? Are there any limits at which TDS starts?

Expert Comment: Yes, interest on deposits in an NRO account will be subject to TDS and there is no threshold limit in the case of a non-resident. Consequently, TDS will be deducted on the entire amount of interest.

Q. We have an ancestral property in the form of agricultural land in India. While my father equally divided it between my brother and I in his Will, I want to sell my share to my brother who is an Indian resident. Which would be the most tax-efficient way to do so? Should we go for a monetary transaction in which I sell the land to him at a certain price? Can I gift it to him?

Expert Comment: Gains arising from transfer of agricultural land is taxable only if the land qualifies to be a capital asset.

Agricultural land is considered as a capital asset if:

1) It is situated within the jurisdiction of a municipality or a cantonment board having population of 10,000 according to the last preceding census; or

2) It is situated in any area within the distance, measured aerially:

a) Within 2km from the local limits of municipality or cantonment board having a population of more than 10,000 but less than 100,000; or

b) Within 6km from the local limits of municipality or cantonment board having a population of more than 100,000 but less than 10,00,000; or

c) Within 8km from the local limits of municipality or cantonment board having a population of more than 1 million.

If the land held by you is within the local limits specified above, it will give rise to capital gains in your hands and you will be chargeable to tax if you were to sell the land for a consideration to your brother. You could consider claiming exemption under section 54F by investing the proceeds in a residential house or depositing the amount in a bank account under the Capital Gains Account Scheme. Alternatively, if you gift the property to your brother, there should be no capital gains tax as any transfer of a capital asset under gift is not regarded as a transfer for computing capital gains. There should be no tax incidence on your brother as well for receipt of the gift, as the transaction of gift between relatives is not covered within the scope of income from other sources.

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