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October 1, 2011

US plans to levy taxes on NRI deposits made back home

AHMEDABAD: With the United Statesgovernment planning to levy taxes on non-resident Indian deposits made back home, non-resident Gujaratis in US are a disturbed lot.

The approximate 20 lakh NRGs staying in US are worried about the FATCA (Foreign Account Tax Compliance Act), which will be enforced by US from January 1, 2013. Under FATCA, either the taxpayer or banks or institutions holding NRI deposits will have to disclose all details to theInternal Revenue Service (IRS).

It is to be taken into account that the NRG community deposits more than Rs. 9,000 crore of money in banks of Gujarat. And with the implementation of FACTA, they will have to shell out some of their earnings. It is estimated that at present, around Rs23,000 crore of NRI deposits is saved in banks of Gujarat. It is believed that around 40%, that is around Rs9,200 crore comes from US alone. 

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