ICICI BANK TO OFFER TAX CONCESSIONS ON NRO DEPOSITS

Non-resident Indians and Persons of Indian Origin can claim tax concession on their Non-Resident Ordinary (NRO) deposits under the Double Taxation Avoidance Agreement (DTAA). So far, banks were offering the concession only to NRIs who were aware of the facility. But ICICI Bank has now made the lower rate of tax a standard product feature to its NRI customers. The bank today launched NRO FD Plus, which offers an interest rate of 8.5 per cent per annum for a 390-day deposit.If the DTAA benefit is not allowed, interest on the NRO deposit is subject to a tax of 30.9-33.9 per cent. However, if customers give declaration and proof that they are from a region that has a DTAA with India, ICICI Bank will offer a lower tax rate of 15 per cent, which is as per government regulations. This increases the returns on the deposit, post-tax, from 6 per cent to approximately 7.4 per cent, said Mr Manish Misra, Head-NRI services and remittances, ICICI Bank. “Debt forms a large part of NRIs’ portfolio. We are targeting mass affluent NRI. Not too many of them are aware of the facility,” Mr Misra said. Initially, the bank will offer the facility to customers from countries such as the US, the UK, Canada and Singapore. “These four countries account roughly for more than half of our NRI portfolio,” Mr Misra said.India has entered into DTA agreement with 65 countries, including Australia, Bangladesh, Canada, China, Germany, Japan, Malaysia, Mauritius, Nepal, Singapore, Sri Lanka, the UAE, the UK, and the US – www.hindubusinessline.com