From the above analysis and explanation, it can be concluded that the NRIs or individuals planning to invest in NRE FD accounts must be aware that interest income received from these accounts will be tax-free or exempted from tax until and unless he or she qualifies as NRI. Also, if the NRIs/individuals return to India for an unlimited period of time or permanently having an NRE FD account then as per Income Tax laws in India it will be considered as violation and the NRE FD account must be designated as resident account.