I am contributing to a retirement account (Roth IRA) in the US. When I decide to go back before the age of retirement, how to take the money back to India? How will it be taxed in India?
SBNRI Team
answered on 16/11/2020
A Roth IRA is funded by your post-tax income. Therefore, withdrawals are tax and penalty-free.
However, if you have had your Roth IRA for less than 5 years or you haven’t reached the retirement age of 59 and a half, the earnings can’t be withdrawn. If you withdrawal your earnings before maturity then tax will be applicable in the US at the prevailing rate along with 10% penalty charges.
Remember, the contributions aren’t taxable. Only the earnings are taxable/liable for penalty depending on the nature and time of withdrawals.
Now, since you have already paid the taxes, if any, that were applicable on your Roth IRA. It won’t be taxed in India.
Click on the button below to connect with our taxation expert who will guide you through the basic processes and create a customized plan for you in order to save maximum taxes on your earnings.
Related Questions
SBNRI Team
answered on 16/11/2020
As an NRI, your salary earned in UAE won’t be taxed in India. Hence, in such a case there is no need to fill Schedule TDS and the income can be disclosed as exempt income in the ITR. For assistance with filing your tax returns in India, click on the button below and connect […]
SBNRI Team
answered on 16/11/2020
The STCG on debt funds are deducted at 30% TDS but the tax liable is as per your tax slab. Therefore, you are entitled to a refund as per your tax slab. For LTCG, 20% TDS is deducted and the tax liable on LTCG is also 20% along with indexation benefits. Therefore, in this […]
SBNRI Team
answered on 09/02/2021
After returning to India, you will have the RNOR (Resident but not Ordinarily Resident) Status. The NRE Deposits need not be converted to resident accounts after your return to India. They can remain as-is till maturity. Consult NRI Taxation Expert There are certain benefits of the RNOR status: They don’t have to […]
SBNRI Team
answered on 05/03/2021
Non residents having income from salary in India are generally required to file their return in ITR Form 2. However, we need to thoroughly check all the different sources of income and then can decide which ITR form will be applicable. You can connect with our taxation expert directly on WhatsApp using the button […]
