Every year thousands of people migrate from India, some for the purpose of education, some for doing their business while many go just for doing offshore jobs and earn in the foreign currency.With passage of time,there are many of them who tend to settle in foreign countries,later on followed by their families as well.
Such people of Indian origin or the ones who become Non Resident Indians or NRIs over the period of time ,are the direct source of cash inflow in India.Over the past few decades, NRIs have shown great interest in parking their funds in Indian Investments.The government has also simplified the rules and regulations to encourage NRI Investments in order to boost the economic growth of the country.
Further,the falling Indian rupee means you as an NRI will get more returns from your Investments in India.Also,the money that Indians working abroad send to their families in India will fetch more rupees on conversion due to the depreciating Indian currency.This in itself attracts more NRIs to put their funds in India depending upon their savings and risk appetite.
But,before discussing about the various investment options for NRIs, you should firstly be clear about the exact meaning of a Non Resident Indian or NRI.
NRI or Non Resident Indian – Meaning
As per Foreign Exchange Management Act,a person is a Resident of India if he stays for 183 days or more in India during the preceding financial year starting from 1st April to 31st March.But,if he does not fulfil this condition i.e. he is in India for less than 183 days,he shall be considered as a Non Resident.
As per the Income Tax act 1961,a person is a Resident of India if :
- He has stayed 182 days or more in India in the current financial year or
- He stayed in India for 60 days or more in the previous financial year and 365 days or more in the preceding 4 years (The 4 years shall be counted from the year before the financial year which is into consideration).
So,if you satisfy any of the above conditions,then you become an Ordinary Resident.In case you don’t satisfy them, then you shall be considered as a Non Resident Indian.
Just check for the above conditions to confirm whether you are an NRI or not.
If yes,now you wonder how to invest your money in India.You need to be clear about your financial goals as to why you want to invest :
- To build a corpus for retirement and have financial security.
- To get the best possible returns.
- To flow the money back to your relatives in your own country.
- To build financial assets in your home country.
Options Available for investment in India.
1. Bank Fixed deposit
2. Mutual funds
3. Direct equity
4. Real Estate
If you are an NRI investing in India,here is a list of Important points to be considered while investing :
- Being an NRI,you are liable to pay taxes on the income you have earned in India.
- Taxable income can be in the form of salary earned in India,capital gain on sale of investments like property,shares,securities etc.
- Certain mutual fund houses may not accept deposits from NRIs based in USA/Canada.You should check with respective fund houses/asset management companies before investing.
- NRIs can avoid double taxation i.e.same income shall not be taxed in two different countries.For this,you need to check for the DTAA or Double Taxation Avoidance Agreement in between the countries.
- NRIs are not allowed to make certain investments like Investment in PPF, NSC, Post office Saving scheme,Senior citizen scheme.
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