•Life Insurance for
NRIs/PIOs
•Fixed Deposits for NRIs/PIOs
•PPF/NSC for NRIs/PIOs
•Stocks for NRIs/PIOs
•Mutual Funds for NRIs/PIOs
•Real Estate for NRIs/PIOs
What financial products from India can an NRI buy and how can he transact? Answer : NRE is Non-resident rupee account from where money can be repatriated abroad freely.
NRO is Non-resident ordinary account. When you become an NRI, your account in India is automatically changed to NRO which you use to make payments in India. Both accounts give 3.5 per cent interest.
The other financial products that an NRI can buy are :
Life insurance
# NRIs can buy life insurance in India from abroad
# Premiums can be paid in rupees through NRO
# In forex through NRE or FCNR accounts
# Claims process is the same as in India
# Money sent through NRE or FCNR accounts
# If premiums paid from NRO account, then $1 million cap on repatriation
Fixed Deposits
# Choice of NRO, NRE and FCNR fixed deposits
# Can invest online from abroad
# NRO FDs earn between 3.75 per cent to 9.5 per cent
# NRE FDs earn between 3.87 per cent to 4.5 per cent
# FCNR FDs earn between 3 per cent to 5.7 per cent
# On investments in India, NRIs will have to pay tax here
PPF/NSC # NRIs cannot open new PPF accounts or buy fresh NSCs
# They can continue old accounts
# Both earn 8 per cent compound interest a year
# Section 80C benefit
# PPF interest is tax-free
# NSC interest is fully taxable
# Repatriation through NRO account and only up to $1 million per calendar year
Stocks To invest from abroad :
# Open account called Portfolio Investment Scheme (PINS)
# Buy/sell shares and convertible debentures through PINS
# Online buying is possible
# There are maintenance and transaction charges
# NRIs can’t trade in derivatives
# Limitless transactions in the primary market
# In secondary market, limit is of 5 per cent of a company’s paid up capital
# Similar limit for debentures
Taxation :
# Long term - no capital gains tax
# Short term - capital gains tax is charged
# Securities transaction tax of 0.2 per cent
Repatriation :
# Is allowed if original purchase was made on repatriation basis
# And if investments were made from NRE or FCNR account
Mutual Funds
# Need an NRO or NRE account
# Can invest like a resident Indian
# Online buying is possible
# Can use Sebi - registered portfolio management services
# Tax impact is the same as a resident Indian
# Repatriation is possible if original purchase was made on repatriation basis
# And if investments were made from NRE or FCNR account
Real Estate
# You can own real estate in India
# But, not agricultural land, plantation property or farmhouse
# Money can be remitted abroad if property held for 10 years
# If held for less than 10 yrs need to keep in NRO account for remaining period
# Repatriation allowed only for 2 properties
# If bought before leaving: Up to $1 million a year from an NRO account
# If bought through NRE and FCNR accounts: Principal amount can be repatriated
Inheritance
# Can hold without RBI permission
# Sale proceeds up to $1 million per calendar year can be repatriated without RBI permission
# Tax: Registration and stamp duty same as for resident Indians
Investment Opportunities
