The Indian government provides great solutions for investment in
India to lakhs of NRIs.
Despite the ongoing slowdown, India continues to offer numerous
investment opportunities for foreign investors, who do not enjoy
such high rates in their country of work. The current volatility
has created attractive entry points for NRIs across a range of
asset classes. If you are looking to invest in India, what are the
options you should consider?
If you wish to invest in India, the first step is to open a
savings bank account. There are three basic types of bank accounts
Go for a non-resident external (NRE) rupee account if you are
looking to remit overseas earnings to India and hold them in
rupees, as also transfer the proceeds of your investments back to
your home country without any restrictions. An NRE account is
completely tax-free and no tax is payable on the interest earned on
But you cannot put income from rent, salary and dividends in the
NRE account. For that you need a non-resident ordinary (NRO)
account. However, the interest earned on the NRO account is taxed
at the marginal rate of 30% plus surcharge and cess. The balance in
the account is also subject to wealth tax.
The advantage is that NRO accounts can be jointly opened with a
resident Indian. If you do not wish to be exposed to exchange rate
risk, you can instead open a foreign currency non-resident (FCNR)
account with a local bank, where your funds are held in the foreign
currency, and not converted to rupees.
In order to open an account, you can either visit the nearest
branch of the Indian bank in your home country, if any, or send the
completed application form (you can get it online) along with the
documents to any of the branches in India (see box). Today, there
are also multiple service providers who help you do investment in
India. They not only handle the entire process but also offer
viable solutions that ensure highest return on investments.
Before investing in India, it is necessary to be aware of the
tax implications. Although there is not much difference between tax
rates for residents and NRIs, it is important to know that for
NRIs, the tax is deducted at the source.
For most NRIs, property is the primary choice of investment. The
bulk of their money is directed towards real estate investments.
However, some experts feel this is not the ideal route for all
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
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