I have Rs.5 lacs, please help
An answer to a question put by some one on yahoo answers.
Quote:
I m a NRI (living in US),age-30yrs,how can i invest in FD (in india) for abt 5
lakhs without being Taxed?
===
Hi interesting question.
Well, open an NRE a/c with a bank and invest your 5 lac in FD for 2years
(auto-renewal).
and get about Rs.40,000 more on maturity,
on which you pay no tax.
Or open resident/domestic a/c and for the same amount/ same period (2 years)
get about Rs.1,10,000
but the bank will pay you after deducting TDS say 10%
i.e. 1,10,000 les 11,000 tax
you you get about Rs.99,000 which is more than the double than what you would
have got on NRE a/c FD as mentioned above.
Want to save tax?
or don't want to pay any tax?
Try splitting your 5 lacs into 5 or 6
Say Rs. 85,000 each
Invest into 5/6 different banks
(not same branches of the banks)
You will have to open 5/6 diff a/c with diff banks.
And don't tell anyone that I told you about this (splitting or tax saving) :-)
It may not be ethical but people do it all the time including almost all those
who pay income tax. By law you are still liable to pay tax on all your income
from all the sources including income from various banks. But Bank will not
deduct your tax if the annual income from the total FDs in the bank is below
the threshold say Rs.10,000
Fyi, Current rates of interest:
NRE 3.75%
Resident/Domestic up to 10.5 %
60 and above get upto 1% more
please note I am not a financial consultant etc
But I am very much into bank savings
PS. In india, you don't pay tax on your first 1,10,000 personal income
That's your basic tax allowance.
JoeGoaUk (masked)
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