Indians who have settled abroad have the right to invest in India. There are a number of safe NRI investment options in India. However, before you invest, it is of paramount importance to understand the tax implications, including both capital gains tax and income tax. One of the major reason why Non-Resident Indians (NRIs) prefer investing in India is that of the higher returns on conversion. NRIs are eager to invest in India considering the fact it is emerging country. Mentioned is the list of the investment options for NRIs:
If you are someone who wants higher returns on your investment, then Direct equity is the answer. Investing in stock markets is one of the best options for lucrative NRI investments. However, it is wise that you keep track of the stock market for best results. These markets are sensitive and observing it regularly is of paramount importance. In order to invest in the same, all you need is bank, trading and demat accounts. As you are an NRI investor, you might even have some special services. You either have the option to invest for a short-term or long-term. The returns depend on the investment and trading strategies you use. You should be prepared for any risks as the prices tend to fluctuate in the stock market.
Another NRI investment option is mutual funds. Mutual funds do the work of safeguarding your assets. However, before investing, it is wise to check the asset management’s company’s rules. A lot of mutual funds offer NRIs with Systematic Investment Plan (SIPs) that further allows an investor to break the total investment into either quarterly or monthly investments. It is wise to invest on the repatriable or non-repatriable basis. Have a Non-Resident Rupee (NRE) or Foreign Currency Non-Residential Account (FCNR) account with a bank in India, if you plan to invest on a repatriable basis. In this, the investment money is sent through usual banking channels. While if the investment is made based on non-repatriation, it offers funds from the Non-Resident Ordinary Rupee (NRO) or NRE/FCNR account of the investor.
Real estate investment plays a major role in ensuring you get high returns. As compared to direct realty investment, Real Estate Investment Trust (REIT) is more liquid. An NRI can invest in either commercial or residential property, but cannot invest in agricultural lands.
NRE / NRO / FCNR Fixed Deposits
An NRI can easily invest money in a Non-Resident External (NRE) or Non-Resident Ordinary (NRO) account. It is one of the most considered NRI investment in India. The money held in these two accounts is in rupees. An NRI can access this as a term deposit account, a normal savings account or even current account. You can even consider investing in FCNR account in which the money is deposited in foreign currency.