Q.1155 Investments options

available in India for Non-

Residents – NRI

Question: Hi Nri Information, I am a USA based NRI. What are the current investment options available in India for Non- Residents? Which option is most secure? appreciate your response. Thanks for the info Answer: Here are a few options available to NRIs  Primary investment that most people abroad prefer is real estate. NRIs can invest in residential and commercial properties but not in agricultural/farm land or plantations. Repatriation of applicable sales proceeds is allowed after paying the applicable capital gains taxes through NRIs NRO bank account with a limit of one million dollars per financial year.  Government Securities: Definitely secure very low risk as they are issued by the Government of India. Interest earned is generally taxable when investment is from NRE accounts. Please note that NRO accounts are taxable. Some bonds are issued as tax free in India which will result in the income being tax free in India but may be subject to taxes in the NRIs home country.  Investment in the Indian stock market can be done by NRIs but requires the opening of a Portfolio Investment Scheme (PIS) account. NRIs cannot simply login to buy/sell stocks in India, they must do so through their PIS account. NRIs can open a PIS account with their bank in India or any broker registered with the Stock Exchange Board of India [SEBI]. PIS account requirement is to ensure compliance of RBI rules that set a limit on the number of stocks of a company that can be held by NRIs.  Investing in mutual funds is allowed for NRIs without the requirement of PIS account. Investment in all categories of mutual funds is allowed. Investment can be done on repatriable or non- repatriable basis depending on the source of the funding.  Fixed and Term Deposits at banks. NRIs may prefer to stay away from FDs offered by private companies. NRIs should get a clear understanding of the tax rules in India and their home countries before investing in India. Even if the investment they select is tax free in India, they may have reporting requirements and taxes to pay on their foreign income in their home country. This is especially true for NRIs based in the United States of America. FATCA reporting requirements now require foreign institutions to report transactions of US residents to the US tax authorities. US residents wishing to invest in India should consult a financial advisor before investing abroad.