State Bank of India — DISINFORMATION

Address:

Mumbai City, Maharashtra

I am an account holder (both NRE and NRO) with SBI, NRI Branch Mumbai. I had sizable NRE deposits with the Bank. I was advised to convert these NRE deposits to NRO, so as to avail benefit of a lower tax rate on interest income. I was also advised that income-tax on NRO deposits will be deducted only at 10% under the double taxation avoidance scheme, if a self-declaration of residency is submitted. This had been complied with. Recently, I saw maturity value of some of my deposits were calculated deducting tax at 30% or so. On enquiring with the bank, I was told that 30% tax was being applied as that was the norm. I was also informed that in order for one to obtain the lower limit of 10%, one need to submit TRC from the tax authorities in the resident country. This information was given to me only after my asking the bank why a higher rate of tax was shown against my deposit. Had I not noticed this and brought to the attention of the bank, I am sure, the bank would not have taken the initiative of informing of the changed procedure and requirement, whereby I would have lost substantial amount by way of tax on interest. On checking this point over telephone, the reply I received was of arrogance of a usual Govt organization and not that of a friendly bank. I am initiating steps to close all my accounts with SBI and transfer them to a friendly bank.