NRI in US earns interest income in India on NRO account both SB and FD.
As per Article 11 of DTTA between India and US, “Interest” income from India is taxable in USA.
It is further stated that India may also tax such interest income subject to maximum rate of 15%.
Definition of “Interest” as per DTAA means “income from debt claims of every kind whether or not secured by mortgage”
In the above circumstances, whether the said NRI can avail concessional rate of 15% tax on interest income (NRO account) in India.
Non-resident in US taxed on Indian NRO account interest; 15% maximum rate per Article 11 of DTAA. A non-resident individual in the US earns interest income in India through an NRO account, including savings and fixed deposits. According to Article 11 of the Double Taxation Avoidance Agreement (DTAA) between India and the US, this interest income is taxable in the US, with India also having the right to tax it at a maximum rate of 15%. The DTAA defines 'interest' as income from debt claims. A participant confirmed that the individual can benefit from the concessional 15% tax rate on this interest income in India. (AI Summary)
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