Norway

Norway wealth tax: Indian bank account and mutual funds in the base

Your NRO balance and your fund units are both in the Norwegian wealth base, and every Indian statement you own runs to the wrong date.

You live in Norway and hold money in India: an NRO account, some fixed deposits, maybe an FCNR balance and a folio of mutual funds. Norway wants their value in the wealth base at 31 December. Every Indian statement you can download runs 1 April to 31 March. And Norway asks a question about your funds that India never asks, which decides how the returns are taxed.

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Last reviewed: 15 August 20268 min readReviewed by Preetesh Maloo, CA

The short answer

Indian bank balances go into Norway's wealth base at 100% of the 31 December balance. Interest that has accrued but has not yet fallen due for payment stays out (skatteloven 4-2 first paragraph letter d), which matters on a cumulative Indian FD. Fund units work differently: skatteloven 4-12 values the unit at unit value and gives the equity portion of it an 80% valuation. On the income side, Norway's 20% and 80% equity-share thresholds, not India's 65% equity-fund test, decide whether the return is taxed as interest at 22% or as share income at 37.84%. And the 20% share discount isn't free: skatteloven 4-19 cuts your deductible debt in the same proportion, while the 30% valuation on your Indian flat doesn't.

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Full guide: Why NRO interest is taxed at 30%, and the fix

Related situations

Deposits at 100%, shares and equity fund units at 80%

Your Indian bank balances enter at 100% of their 31 December value, and shares and the equity part of fund units at 80%.

Indian asset	Enters the wealth base at	Authority
NRO, NRE and FCNR balances	100% of the 31 December balance	skatteloven 4-1
Listed shares	80% of quoted value	skatteloven 4-12
Unlisted shares in a foreign company	80% of estimated sale value	skatteloven 4-12
Mutual fund units	Unit value, with the equity portion at 80%	skatteloven 4-12

Norwegian wealth is measured at market value on 1 January of the assessment year, which is your closing position on 31 December of the income year. Norway draws no distinction between NRO, NRE and FCNR, and the fact that NRE interest is exempt in India makes no difference to a Norwegian wealth figure.

A fund unit is a pro rata calculation rather than a band, so a fund that's 50% equity enters at 50% at 80% plus 50% at 100%, which is 90% of unit value. One condition sits under that for a non-EEA fund: the Norwegian rules reach funds established outside the EEA where the fund corresponds to a Norwegian one, so an Indian scheme qualifies or it doesn't, and that's worth settling per scheme.

One detail catches cumulative fixed deposits. Interest that has accrued but hasn't yet fallen due for payment isn't part of the wealth figure, because an interest claim that hasn't matured sits outside the base. It joins the base once it falls due.

Your 20% discount is paid for out of your mortgage

Skatteloven 4-19 cuts your deductible Norwegian debt by the same proportion the discount gave you. Where you hold an asset carrying a valuation discount, the share of your debt matching that asset's share of your total assets is valued at the same percentage as the asset.

The trigger list is specific: skatteloven 4-10 third and seventh paragraphs, 4-12 first to third and fifth to sixth paragraphs, 4-17 second and third, and 4-40 first sentence. Shares and fund units under 4-12 are squarely on it.

Fritidsbolig valuation sits in skatteloven 4-10 sixth paragraph, and the sixth paragraph isn't on that list. Foreign property follows the fritidsbolig rules, so your Indian flat never triggers the haircut, while your Indian mutual funds do.

The flat does still sit in the arithmetic, and not in your favour. Skatteloven 4-19 third paragraph counts only your primary home and the discount-triggering assets at full value in the ratio, so the flat enters the denominator at its reduced 30% figure. That dilutes the ratio and softens the haircut a little, but far less than a bank balance of the same real worth would, because only 30% of the flat reaches the denominator at all.

What the debt haircut costs Ravi

Ravi's 20% discount is worth NOK 200,000 and his mortgage hands NOK 150,000 of it straight back.

He lives in Bergen, holds NOK 1,000,000 of Indian equity fund units, entirely equity, and NOK 600,000 in Indian deposits, against a NOK 1,200,000 Norwegian mortgage.

1. Wealth values: the fund units enter at 80%, so NOK 800,000. The deposits enter at 100%, so NOK 600,000. 2. The 4-19 ratio: the units count at full value here, so NOK 1,000,000 out of NOK 1,600,000 of total assets, which is 62.5%. 3. So 62.5% of the mortgage, NOK 750,000, is valued at 80%, giving NOK 600,000. The other NOK 450,000 stays at full value. 4. Deductible debt is NOK 1,050,000 instead of NOK 1,200,000.

Net wealth comes out at NOK 350,000 rather than NOK 200,000.

Norway asks a question about your fund that India never asks

How the fund's return is taxed turns on its aksjeandel, its equity share, and Norway's thresholds aren't India's.

	India	Norway
The test	At least 65% in listed domestic equity	Bands at 20% and 80% equity
Measured	Annual average of monthly averages	The position at the start of the income year
Outcome	Equity fund or not, binary	Interest income, share income, or split pro rata

Under skatteloven 10-20, a fund over 80% equity has its distributions taxed as share dividends, one under 20% has them taxed as interest income, and anything between is split pro rata. For gains on the units the measure differs again: the average of the equity share in the year you bought and the year you sell.

Interest income is taxed as general income at 22%. Share income is uplifted by a factor of 1.72 and then taxed at 22%, an effective 37.84%. The shielding deduction that softens share income reaches a personal shareholder without geographic limit, but on a fund unit it attaches only to the equity portion, and none of it is pre-filled for a foreign holding.

So a balanced advantage or arbitrage fund that India calls an equity fund can land in Norway's middle band and have its return split. The fund's actual equity allocation at 1 January, out of the AMC's portfolio disclosure, is a number no Indian tax document will hand you.

What you actually have to get out of India

You need four things India doesn't produce on demand: balances at 31 December, unit values at 31 December, each fund's equity allocation at 1 January, and the right NOK conversions.

What Norway needs	Why the usual Indian document fails
Balances at 31 December	Indian statements and certificates are cut to the Indian financial year
Unit holdings and NAV at 31 December	The statement people download is the one cut to 31 March
The fund's equity allocation at 1 January	India reports a 65% pass or fail, not the percentage Norway needs
Values in NOK	Indian documents are in rupees, and the conversion is a Norwegian rule

Conversion runs on Norges Bank rates, and not one rate throughout.

What you're converting	Which rate
Assets and debt	The rate at 1 January of the year following the income year
Income and expenses generally	The transaction-date rate or an annual average, your choice
Interest earned abroad	The annual average rate for the income year, no choice

So your 31 December balance and the interest it earned convert on two different rules, which is where reconciliations usually break.

And your NRE interest, exempt in India, isn't exempt in Norway. It's ordinary interest income taxed at 22%, and because India charged nothing there's no foreign tax to credit against it.

What's involved

What the CA actually does

1
We build the 31 December pack
We assemble the balances, holdings and unit values at 31 December rather than 31 March, so your Norwegian wealth figures are on the right date instead of nine months out.
2
We get the equity allocation Norway asks for
We pull each scheme's actual equity allocation at 1 January from the AMC's portfolio disclosure, which is what decides whether Norway taxes the return as interest or as share income.
3
We flag the debt haircut before you plan around the discount
We show you what skatteloven 4-19 does to your Norwegian debt deduction, so the 20% discount on your Indian funds isn't treated as a bigger win than it is.
4
We keep the Indian tax right underneath it
We handle the Indian side of the same assets, capping TDS at the treaty rate and filing the return, so the wealth pack and the income position agree with each other.

What to have ready

Documents you'll typically need

Bank balances at 31 December, and the dates interest falls due for payment
Mutual fund unit holdings and NAV at 31 December
Each scheme's equity allocation as at 1 January
Details of any Norwegian mortgage or other deductible debt
Your PAN and Norwegian tax details

References on this page

skatteloven 4-1: wealth valued at market value on 1 January of the assessment year, so the 31 December position
skatteloven 4-2 first paragraph letter d: an interest claim that has not fallen due for payment stays outside the wealth base
skatteloven 4-12: listed and unlisted foreign shares at 80%; a fund unit at unit value with the equity portion at 80%
skatteloven 4-19: debt reduced in proportion for assets carrying a valuation discount, the trigger list being 4-10 third and seventh paragraphs, 4-12 first to third and fifth to sixth, 4-17 second and third, and 4-40 first sentence; 4-10 SIXTH paragraph, which carries fritidsbolig, is absent
skatteloven 10-20: equity share under 20% taxed as interest, over 80% as share income, in between split pro rata, measured at the start of the income year; the seventh paragraph extends the rules to corresponding funds established outside the EEA
2026 rates: general income 22%, share income uplifted by 1.72 to an effective 37.84%; the shielding deduction reaches a personal shareholder without geographic limit but attaches only to a unit's equity portion
Skatteetaten conversion rule: Norges Bank rates, the 1 January rate for assets and debt, and the annual average for interest earned abroad
India: equity-oriented fund means at least 65% in listed domestic equity (Section 112A, Section 198 from FY 2026-27)

Frequently asked questions

Common questions

Both. Deposits enter at 100% of the 31 December balance, and fund units at unit value with the equity portion of the unit at 80%.

Partly. Skatteloven 4-19 cuts your deductible debt in the same proportion, so a Norwegian mortgage hands part of it back. Foreign property valued under the holiday-home rules never triggers that.

Not necessarily. India applies one 65% test on an annual average. Norway splits at 20% and 80% on a single snapshot and taxes anything between them pro rata.

Not until it falls due for payment, which is worth knowing on a cumulative deposit that pays nothing out for five years.

The exceptions that change the answer

Where the general rule stops applying to you

Every rule below has a carve-out, a cut-off date or a condition that flips the answer. These are the ones that decide real cases.

FCNR(B) deposit tenure

Right now: 1 to 5 years; term deposits only, no savings variant

Where it works differently

The holder returns to India permanently: The deposit may run to maturity, then converts to RFC. Interest stays exempt while the holder is RNOR.; Master Direction on Deposits and Accounts.
Premature withdrawal before 12 months: No interest is payable.; Standard RBI condition on FCNR(B).

Commonly got wrong

FCNR accounts work like a savings account. FCNR(B) is a term deposit only, 1 to 5 years.FCNR(B) is a fixed deposit in foreign currency, one to five years. There is no FCNR savings account.

NRO account: what it costs and what it caps

Right now: Interest taxed at 30% plus surcharge and cess; repatriation capped at USD 1 million a financial year

Where it works differently

A TRC and Form 10F (Form 41 from 1 Apr 2026) are furnished: The treaty rate applies to the interest, commonly 10-15% under Article 11 instead of 30% plus surcharge.; s.90(2). This is the single largest recurring recovery item for most NRIs.
Remitting out: Form 15CA is needed, plus Form 15CB from a CA where the remittance is chargeable and above Rs 5 lakh in the year.; Rule 37BB.
Joint holders: The USD 1 million ceiling is per person per financial year, so joint holders each have their own.; FEMA 13(R).

Commonly got wrong

NRO interest is taxed at 30%. Incomplete. Surcharge and 4% cess sit on top, and a treaty can cut it to 10-15%.30% plus surcharge and cess by default, but 10-15% under most treaties if you hold a TRC and file Form 10F.

If this matched your situation, these go further

Norway wealth tax on property in India, and the 30% rule How to claim credit in Norway for tax paid in India The Swiss wealth tax and your Indian assets NRI ITR filing (we file for you)Stocks / equity redemption coordination HNI NRI tax advisory FD TDS calculator MF redemption TDS calculator Real return calculator

Your Norwegian adviser wants 31 December values?

Every Indian statement you can download is cut to 31 March. A practising CA rebuilds the year-end pack and the equity allocations, free and with no obligation.