How to transfer Series I Savings bonds to India

josephgp · Post by **josephgp** » Sun Apr 13, 2008 9:32 pm

Hi,I have $5000+ Series I Savings bonds. What is the best way to transfer these to India with minial tax impact (is there tax impact)?I might give these to my Dad in near future if that makes any difference. I have both NRE and NRO accounts back there.Thanks,JGP

RRK · Post by **RRK** » Sun Apr 13, 2008 11:15 pm

Is it in paper form or electronic form ?
Have you returned to India ?

You can't transfer I bonds to India or give to some one who has no social security number. You may redeem the bond and use the proceeds any way you want.. :)

manuchabria · Post by **manuchabria** » Mon Apr 14, 2008 12:39 am

You can consider holding on to it and converting to electronic format. In that way you should be able to access them in India. Depends when you bought those and what is the interest rate that you are getting

SoonerOrLater · Post by **SoonerOrLater** » Mon Apr 14, 2008 4:24 pm

manuchabria;94886You can consider holding on to it and converting to electronic format. In that way you should be able to access them in India. Depends when you bought those and what is the interest rate that you are getting[/quote]

I am also in the similar boat.

My I-bonds are in paper format. I am assuming I can go their website and I will get process to convert them into electronic format.

However, after that, how do I redeem them from India (if I want to). As far as tax is concerned, I am guessing:

1. No taxability in US (I have been holding that for more than 8 years)
2. In India, no tax as long as you are in RNOR period.

Please fire away your comments

Thanks,

manuchabria · Post by **manuchabria** » Mon Apr 14, 2008 9:36 pm

See answers in red.

Disclaimer: These answers may not be proper for your particular situation. You may be better off redeeming the bonds. See other threads for details

I am also in the similar boat.

My I-bonds are in paper format. I am assuming I can go their website and I will get process to convert them into electronic format.

Yes, you can. You will need to send them your paper bonds and after a few weeks it will be converted to electronic bonds

However, after that, how do I redeem them from India (if I want to). As far as tax is concerned, I am guessing:

When you redeem the bonds they are transfered to your US bank account

1. No taxability in US (I have been holding that for more than 8 years)
2. In India, no tax as long as you are in RNOR period.

It all depends on your status as a US citizen, GC holder, alien, etc. Totally dependent on what you earn and your individual situation

Please fire away your comments

Thanks,

RRK · Post by **RRK** » Mon Apr 14, 2008 10:38 pm

[quote]1. No taxability in US (I have been holding that for more than 8 years)

2. In India, no tax as long as you are in RNOR period.[/quote]

1) US Saving bonds are taxed at redemption. For those filing as residents ( USC/GC), the dividend is taxed at marginal rate. For non-resident Indian citizens, I think the rate is 15%. I am writing this from the memory. You better check 1040NR instructions.

If the I bonds are redeemed to pay for higher education, the dividends are tax exempted.

8 years holding period or 30 years holding period does not matter.

2) Yes, if it is RNOR period, you dont pay taxes to GoI.

I wrote some articles on I bonds long time back.. I'm not sure how helpful they are now. I bonds have gone through many changes since then.

http://www.r2iclub.com/rrk/articles.htm#ib