Please advise, should I (NRI) invest in an FD with a local Indian resident account (of spouse) (higher interest with TDS tax) or self NRE FD (lower interest, zero taxation)?
Also assuming, will not require repatriation.
Thanks in advance,
SBI NRE FD rate 6.85%
IDFC resident FD rate – 731 days 8.25%
Whether you invest in your wife’s name or in your name, based on the source of the fund, it will be taxed in your head due to clubbing provisions. Hence, first define the source of the money to be deposited. If it is from your income, then the earnings from FDs (even though the holder of the FD is your wfe), will be taxable under your head.
Hence, considering all these aspects, I suggest NRE FDs a better option that the Resident FDs.
Thank you Basu for the suggestion. I was taken over by the higher interest rates in Resident FDs.