I am NRI and having 500000 in FD as emergency fund at my wife Account and also I am also parking 400000 in NRO account for paying the builder from my savings as the house construction progress. My question is the tax is deducting at source for my FD can be claimed for refund or not and is it necessary to file income tax returns for myself and wife
What is the best solution to park my funds temporarily before paying to the builder.
JSimha-Yes, you have to file IT return (even though TDS @ 30% deducted). You must file IT return based on the income arising in India (like rent or interest on FD) and file IT Return. You can claim the refund based on the tax slab you fall. Suppose your tax slab is at 10% then you can get the refund of the additional TDS done.
In my view it is bet to park in NRE account as interest rate is tax-free in India. However, you have not stated your current stay. Hence, I can’t comment on the tax issue in that country from the interest earned from such NRE/NRO Accounts.