The Non-Resident Indians (NRIs) living in the US, UK, Canada and Singapore can now avail the benefit of a lesser tax deduction on their Non-Resident fixed deposit with ICICI Bank [Get Quote], a top bank official said in Mumbai.The NRO FD Plus offers the benefit of concessional rate of tax deducted at source (TDS) under the Double Taxation Avoidance Agreement (DTAA) of India with these countries, ICICI Bank General Manager and Head NRI Services Manish Mishra said.
"The NRI depositors will just have to submit a declaration form with a proof that they are residents of the US, the UK, Canada or Singapore to avail the benefit," he said.
The four countries account for roughly 50 per cent of the bank's NRI customer base, Mishra said. A normal NRO FD is subject to a tax of 30.9-33.9 per cent but if DTAA benefit is availed, the deposit is subject to a TDS of only 15 per cent giving a better post tax yield, he added.
For example, a plain NRO FD giving an 8.5 per cent interest rate per annum gives a post tax yield of six per cent with TDS at 30.9 per cent. However, with DTAA provisions and lower TDS at 15 per cent, the post tax return is approximately 7.4 per cent.
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