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TDS Guidelines for NRO/NRE Accounts

 

Important Update for Non-Resident Customers

The withholding tax (TDS) rates on interest earned from NRO deposits and cash withdrawals from NRO/NRE accounts are as below

 

1. TDS on interest earned from NRO Deposits & Savings Accounts held by non-resident customers

 

Total Interest Earned

Withholding Tax Rate

₹50 lakhs or less

31.2% (30% tax + 0% surcharge + 4% cess)

More than ₹50 lakhs and up to ₹1 crore

34.32% (30% tax + 10% surcharge + 4% cess)

More than ₹1 crore and up to ₹2 crores

35.88% (30% tax + 15% surcharge + 4% cess)

Above ₹2 crores

39% (30% tax + 25% surcharge + 4% cess)

 

Note:

 

  • Starting FY 2023-24, the new tax regime is the default.

  • If a non-resident customer opts for the old tax regime and informs the Bank, the TDS rate for interest above ₹5 crores will be 42.74% (30% tax + 37% surcharge + 4% cess).

  • If no declaration is provided, the new regime will be applied by default.

All interest paid or accrued will be subject to these rates.

 

2. TDS on Cash Withdrawals from NRO/NRE Accounts (Section 194N)

 

TDS Criteria

Annual Withdrawal Limit

TDS Rate

PAN updated & ITR filed

Above ₹1 crore

2.60% (2% tax + 25% surcharge + 4% cess)

PAN updated but ITR not filed

 Above ₹20 lakhs 2.60% (2% tax + 25% surcharge + 4% cess)
Above ₹1 crore 6.50% (5% tax + 25% surcharge + 4% cess)

PAN not updated

Above ₹20 lakhs

20%

PAN-Aadhaar not linked but ITR complied

Above ₹ 1 Crore

20%

PAN-Aadhaar not linked and ITR non-complied

Above ₹20 lakhs

20%

 

If PAN-Aadhaar is not linked, PAN will be considered inoperative, and higher tax rates under Section 206AA will apply from July 1, 2023.

 

3. PAN/Aadhaar Requirement for Cash Transactions

 

As per CBDT Notification 53/2022, the following transactions require PAN or Aadhaar. Without PAN/Aadhaar, these transactions will not be allowed.

 

  • Cash deposits or withdrawals of ₹20 lakhs or more in a financial year (across one or multiple accounts).
    Opening of a Current Account or Cash Credit Account.

     

Click Here - FAQ on NRI PAN-Aadhaar Linkage

 

Disclaimer - This information is for general reference only. Tax implications may vary based on individual cases, tax authority interpretations, and law amendments. Customers are advised to consult a tax professional before making financial decisions. ICICI Bank Ltd is not liable for any actions taken based on this information.

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