ICICI Bank India’s second largest bank announced a new non-resident ordinary deposit feature, NRO Fixed Deposit Plus (NRO FD) for NRIs staying in US, UK, Canada and Singapore. This new feature introduced by Bank’s NRI Services division will allow NRIs to maximize their post tax yield on NRO fixed deposits.
With this scheme, namely NRO Fixed Deposit Plus, ICICI Bank has made available the benefit of concessional rate of Tax Deducted at Source (TDS) under the Double Taxation Avoidance Agreement (DTAA) as a standard product feature to its NRI customers.
However, plain vanilla NRO deposits, which earn interest equal to the high yield resident deposits, unfortunately are not eligible for the statutory tax benefits enjoyed by non resident external or foreign currency non resident deposits. Currently, interest on NRO fixed deposit is accountable to a tax of 30.9 to 33.9% if DTAA benefit is not allowed. Also, such a tax is deducted at source on plain NRO FDs. This makes the post tax yield on plain NRO deposits relatively unattractive for a intelligent investor.
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6 comments:
I checked with ICICI NRI services and they were not even aware of such a scheme! Amazing ignorance by ICICI employees.
ICICI Bank website has no mention of this. Is this a gimmick or what?
I had to write to nri@icicibank.com to get the forms to be filled out to avail of the DTAA benefit. They emailed the forms to be after a few weeks but the form itself expects you to know under which article of the treaty is interest defined etc! Very badly handled by ICICI for sure. I am sure they could put up more material on the website to help folks! Is anyone listening?
Alok
DId you guys figure out what needs to be done with this CA certification or will a notarized copy do the case ? Is this applicable for H1B holders paying US tax(legally residents)? Please let me know if someone has availed this option.
Regards
V
Is there any tie up in between India and Mauritius for DTAA implementation on NRO FD ?
Why would you want to go with NRO fixed deposits when currently NRE fixed deposits are as high as 9%. See an interesting article on http://insight.banyanfa.com/?p=123
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