Do you have to pay tax on the interest earned in NRE account when you file US tax? Also when you transfer money is it converted to Indian rupees or is it still in US dollars? How easy is it to move it back to US bank account when needed? Any tax implications when moving the money back?
Yes you do have to pay tax on interest earned. When you transfer money it’s deposited in rupees. No tax implications in India
Yes, no need to pay any tax on interest earned on money from NRE Account!
Wrong! You have to pay tax on interest to US govt if you work in US. You also have to fill out an FBAR form every year.
Ask a CPA; it would depend on your filing residency status
You are exempted from tax on NRE account only in India. You end up paying tax here in USA. Indian banks will report it to IRS if amount deposited over 50k USD under FATCA. You also have to file FBAR for every bank account you have. Though you could get 7%, it is 4% after taxes effectively. With currency fluctuations I personally have been in significant loss so far. If you intend to keep the money in India, then it may be fine. Bringing money from nre to Usa is as simple as wire transfer. NRO has little more complications but possible to bring money from that as well. NRO has tax implications in India but you get credit for that in USA.
How is it 4%.. you just pay federal tax on the interest right ?
Sorry wanted to ask about if tax needs to be paid on interest in US
NRE account is in India. Am asking if we need to pay tax on the interest earned in NRE account when you file US tax