If you’re an NRI considering investments in India then welcome to the ultimate NRI investment guide. Through this piece, Cube Wealth will help you reach the best investment options for NRIs in India.
As an NRI you may have considered investing in India in the past and perhaps looked away when the process seemed a tad bit complicated. At the same time, you really do want to invest in India because you know it is an effective method of participating in the Indian economy. Investing in India is great because our country has a lot more potential for growth than other more mature markets.
Well, now you can get free advice from a wealth coach who can help you through this on The Cube App
What is an NRI?
Before we jump into details let’s understand how an NRI is defined: A Non- Resident Indian (NRI) is a citizen of India who is currently living outside of India in a foreign country.
Can NRIs Invest in India?
While NRIs can invest in India they have to follow regulations prescribed under the Foreign Exchange Management Act (FEMA). Learn more about the options, rules and regulations around NRI investments in India here: NRI Mutual Fund Investment Options In India
Why Should NRIs Invest in India?
Investing in India is a great way of creating wealth and simultaneously helping the country’s economy. It’s the ideal time to invest in India as we have a stable majority government in power. In addition to that, a lot of Foreign Direct Investment (FDI) is flowing into the country. Clearly, the Indian market has immense scope for growth and everyone wants to cash in on it.
Besides this, you should consider investing in the Indian market because:
Indian Asset Management Companies cannot accept foreign currency for payments. Therefore you must start by creating an NRO/NRE/FCNR account. You can also invest through Power of Attorney. The power of attorney holder must be KYC compliant and then you can make payments by cheques drawn on your NRE or NRO account.
How NRI investments are taxed depends on whether India has signed the DTAA (Double Taxation Avoidance Treaty) with the NRIs country of residence. In which case NRIs don’t have to pay twice the tax. NRIs will, however, pay tax on capital gains.
How Equity Funds Are Taxed For NRIs:
Short Term Capital Gains @ 15%.
Long Term Capital Gains > Rs 1L @ 10%
How Debt Fund Are Taxed For NRIs:
Short Term Capital Gains @ 30%
Long Term Capital Gains > 3Yrs @20%
Tips for NRIs to Invest in India
Talk to Cube Wealth Expert for advice
Invest consistently & with discipline
Automate investments using Cube Wealth
Carefully weigh your options
Understand your risk appetite before investing
Frequently Asked Questions (FAQs)
Q. What is NRI investment?
Ans. A Non- Resident Indian (NRI) is a citizen of India who is currently living outside of India in a foreign country. An investment made by such a citizen is what we would typically call an NRI investment
Q. Can NRI invest in Indian stocks?
Ans. Yes, NRIs can invest in Indian stock through the Portfolio Investment Scheme (PIS) of the RBI. It allows NRIs to invest in the stock market through a bank account with a nominated branch.
Q. Is NRE FD a good investment?
Ans. The interest earned through NRE accounts are exempt from tax in India, provided the investor is an NRI. However, you might be taxed in your resident country. For NRO though, you pay tax in both the countries. So, from that perspective, an NRE FD is a good investment.
Q. Can NRI invest in FD in India?
Ans. Yes, an NRI can invest in FD in India. This can be done through either a non-resident external (NRE) fixed deposit or a non-resident ordinary (NRO) fixed deposit. However, NRE FD rates are a lot lower than NRO.
In case you have not begun investing yet and are completely new to this, this episode of The Cube Wealth Show on How to Start Investing in Mutual Funds can be a good starting point.
Rishabh P Nair
Rishabh P Nair is the Head Of Brand Content at Cube Wealth, the Financial Freedom App with a smart Perfect Portfolio Planner. Rishabh has been weaving stories for over 10 years and prides himself on building brands with a strong identity.
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