Module: | FCNR(B) & Loan Regulations
Q12: Leena opens an FCNR(B) Fixed Deposit, for a tenure of 3 years. After 2 years, she returns to India permanently, and becomes a resident. She asks her banker, about the status of her deposit. Which of the following statements, correctly describe the rules applicable to her situation?
1. The minimum permissible tenure, for opening a new FCNR(B) deposit is 1 year, and the maximum is 5 years.
2. Upon becoming a resident, she must immediately close the FCNR(B) deposit, and convert it to Rupees.
3. The deposit is allowed to continue until maturity, at the contracted interest rate.
4. The interest earned on the deposit, becomes taxable in India, after she changes her status to 'Resident'.
2. Upon becoming a resident, she must immediately close the FCNR(B) deposit, and convert it to Rupees.
3. The deposit is allowed to continue until maturity, at the contracted interest rate.
4. The interest earned on the deposit, becomes taxable in India, after she changes her status to 'Resident'.
✅ Correct Answer: B
FCNR(B) tenure is 1 to 5 years.
On becoming a resident, deposits can run to maturity, but interest becomes taxable.
Immediate closure is not mandatory.
On becoming a resident, deposits can run to maturity, but interest becomes taxable.
Immediate closure is not mandatory.