Nonresident Indians, after earning abroad make investments in India as a part of financial planning. Investing in India is much simpler and safer compared to other countries as the return on investment is high. Moreover, RBI provides special investment schemes for NRIs to promote more investments from them. To make thoughtful and well informed decisions to invest in India, here are five useful tips for NRIs:
Find the Best Investment Method
There are a lot of options to invest your finances. Equity market, real estate and mutual funds are three of the most popularly used investment avenues in India. NRIs can invest in equities without an upper cap on their investment amount. They can also opt for mutual funds for long term investment opportunities, if they are looking at safe investment options.
When it comes to investment in India, the best is to analyze government securities. These are provided by the government under processing of Reserve Bank of India. The risks involved, automatically reduce when following this process. NRIs can access a variety of security options from banks through their investments.
For NRIs, the income from Indian resources is taxable. When NRIs have invested in mutual funds that have 65% or more assets in equities, the dividends on it are tax-free. In case of short term capital gain, the tax bracket is 15% and capital gains on long term gains are tax-free. Due to these provisions, opening an NRI account in India is much easier and beneficial for the investor.
There are various deposit accounts available for NRIs in the country. NRE account is a fully repatriable taxable fixed deposit account for NRIs. Through this account, they can make deposits from overseas account and remit them in Indian accounts in the form of Indian currency. NRO deposits on the other hand are tax-free and can also be opened as a joint account with an Indian resident. The income that is earned in India by the NRIs can also be deposited in this account. There is also the option of Foreign Currency Non-Repatriable (FCNR) deposit in which a fixed deposit can be made in the account in any of the foreign currencies.
Power of Attorney
The validity of Power of Attorney is the next important thing to be taken care of while thinking of an investment. It is always safe for an NRI to have a power of attorney holder. This ensures that the account can be handled by someone trustworthy even in the absence of the individual.
Being an NRI, if you are planning to invest in India, make sure you strategically plan your investment after considering all options.