Is NRO Account Interest Taxable for OCI Cardholders in India?

I would separate this into three questions: the taxability of NRO interest, the TDS rate, and whether you have to file an ITR.

NRO interest is generally taxable in India. Banks commonly deduct TDS from interest paid to non-resident account holders, and the rate can be affected by applicable tax provisions, surcharge, cess, and treaty relief where available.

I would not assume that every OCI cardholder has the same final tax liability. The amount of other Indian income, applicable deductions or exemptions, and residential status can matter.

Since you mentioned Dubai, check the current India–UAE DTAA provisions and whether you meet the conditions for any treaty benefit. The absence of personal income tax in a country does not automatically establish eligibility for every treaty claim.

Before opening an FD, ask your bank for an illustration showing the interest, expected TDS, and any documentation required. You can then compare that with your actual tax position.

I have an NRO fixed deposit in India, and my bank explained that interest is generally taxable. The bank's TDS deduction was something I had to account for when reviewing my Indian income.

One thing I learned is that the tax treatment of NRO accounts is not the same as NRE accounts. I would not rely on the NRE exemption when calculating tax on NRO interest.

Also, be careful about the difference between TDS and your final tax liability. TDS is a deduction at source, while the final tax depends on the applicable provisions, your income, and any eligible relief.

For an OCI holder, I think the key question is whether you are a non-resident for Indian tax purposes and what Indian income you receive. Your OCI status is relevant to your background, but it is not a blanket exemption from Indian income tax.

I recommend keeping your bank interest statements and TDS certificate. They will be useful if you need to check your tax records or file a return.

In my experience, NRO interest is treated differently from NRE interest. I have an NRO account for income received from India, and the bank deducts TDS on the interest.

As far as I understand, an OCI card does not automatically make NRO interest tax-free. The relevant Indian income-tax rules apply to the income and the account holder's circumstances.

When I opened my account, the bank requested my passport, OCI documentation, overseas address proof, and other KYC documents. However, those documents establish identity and account eligibility; they do not by themselves provide an exemption from tax.

I would ask your bank for the TDS certificate and confirm the applicable rate. If your final tax liability is lower than the amount deducted, you may need to review whether you qualify for a refund through an income-tax return.

I would also check the DTAA question separately. The tax rules of your country of residence and the relevant treaty provisions may affect how Indian tax is treated.