New Delhi, July 27 -- I have been recently shifted to UAE for short term. I want to invest in 5-year FCNR deposit after RBI's recent announcement. However, I will be returning to India in another 3 years. After I become a resident of India, will the interest earned on these FCNR deposits become taxable? Further, on maturity of the deposits, will I be permitted to transfer the maturity proceeds abroad?

Under the provisions of the Income-tax Act, 2025, interest earned on FCNR deposits continues to remain exempt from tax in the hands of a non-resident or a resident but not ordinarily resident (RNOR).

Accordingly, after your return to India, the interest earned on your FCNR deposits will continue to be exempt from tax for as long as you qua...