Negative impactEconomy
FCNR scheme: Withholding tax fear haunts US, Singapore NRIs
Economic Times 14 hrs ago·20 Jul 2026, 7:10 pm
Non-resident Indians (NRIs) in the US and Singapore are facing uncertainty regarding their Foreign Currency Non-Resident (FCNR) deposit schemes. The primary concern is the potential application of withholding taxes on interest income. For US-based NRIs, this could mean higher taxes on interest payments, while Singaporean NRIs may face taxes on loans taken from Indian banks' GIFT City branches. This adds a layer of complexity to managing overseas investments.
For investors, this news matters because it directly impacts the net returns on their foreign currency deposits. Higher withholding taxes reduce the effective yield, making these investment avenues less attractive compared to other options. It is crucial for NRIs to understand the specific tax implications in their country of residence to avoid unexpected deductions.
Moving forward, investors should closely monitor the regulatory developments and any potential changes in tax treaties between India and these countries. Staying informed will help in making better decisions regarding the allocation of foreign currency assets.
Key takeaways
- Category: Economy.
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