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Savings a/c in India earning interest . I live in US. How do I report interest income for tax purposes? |
Am planning to open a Citibank Rupee Checking account. Do they send me interest income report for tax reporting? What are the differences between NRE/NRO accounts from tax point of view? About S.B Interest: The bank will credit interest in SB A/c. That will be your interest from S.B A/c. You can show that as income from your S.B A/c. NRE A/c. (Non Resident External A/c). All deposits to this A/c must be foreign currency cheques. The amount deposited to this A/c will be converted to Indian rupees at the market rate at that time. A/c will be maintained in Indian rupees. At any time, the A/c holder can convert the balance amount to foreign currency and take back the amount . Indian rupees cash or cheques cannot be credited to this A/c. You can withdraw cash or can issue cheques to any one in India in Indian rupees. About NRO. (Non Resident Ordinary A/c). It is like any other ordinary S.B A/c. You can deposit Indian rupees (Both Cheques & cash) to this A/c or even foreign cheques to this A/c. You have to always withdraw or issue Indian rupees only from this A/c. Check you year-end statement for total interest earned, and report it on your taxes as interest earned (after converting to USD) no difference from US tax point of view. |
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