Taxes deducted for NRO account
30%TDS will be deducted on the interest earned from NRO account @30% plus applicable cess and surcharge. The TDS rate is 31.2% on interest upto Rs 5 million. The entire NRO interest is subject to TDS without any exempted threshold. For more details on the withholding tax percentage, click here.
What are the disadvantages of NRO account?
Disadvantages of NRO:
- Interest earned on balances in NRO Accounts is not exempted from Indian Income tax. Instead income tax is deducted at source (TDS) i.e. at the time of payment of interest by the bank.
- Balance held in NRO account can neither be repatriated.
What is interest rate on NRO account?
RATE OF INTEREST ON NON-RESIDENT ORDINARY (NRO) ACCOUNT DEPOSITS W.E.F 14.06. 2022*
| NRO TERM DEPOSITS With effect from 14th June, 2022 | ||
|---|---|---|
| Tenors | Below Rs.2 Crore | Rs.2 Crore & above |
| 7 days to 45 days | 2.90% | 3.50% |
| 46 days to 179 days | 3.90% | 4.00% |
| 180 days to 210 days | 4.40% | 4.25% |