Investment options for NRIs

For overseas Indians, India offers a tremendous opportunity for investment and wealth building as India is slated to grow at the rate of 8%-10% for the next few decades.

Options available for NRIs:

As per the Government of India, NRIs are given the following facilities as far as investment is concerned.

1. Bank accounts in India
2. Investment in securities and debts
3. Investment in immovable properties such as real estate

Types of Accounts

NRE Account: This is rupee denominated account. The interest earned is tax free. The amount in the account is repatriable.

NRO Account: This is also a rupee denominated account. The interest earned is taxable. The repatriation limit is 1 million USD in a year.

NRNR Account: This is a term deposit account with 6 months to 3 years term which can be extended. Only the interest can be repatriated. The interest is not taxable.

FCNR Account: This is a term deposit accounts for maximum of 3 years in foreign currency denominated form. The foreign currencies allowed are US, Australian, Canadian dollar, Euro, Pound, and Japanese Yen.

Investment in securities and debt:

Indian market has been a darling for foreign investors for quite a few years. The market will keep its momentum as India is expected to grow with a respectable rate for a few decades. NRIs can invest in securities and debt instruments to exploit the opportunities presented by Indian stock market. NRIs can invest in stocks and debt funds directly or in mutual fund.

Government of India has allowed NRIs to invest in Indian market directly or through portfolio investment scheme. It has allowed the following types of investment.

Investment in stocks (especially secondary market) through portfolio investment scheme (PIS)

This allows NRIs to invest in Indian security market without obtaining any permission from the RBI or the Government. In some cases, however, they need permission from FIPB (Foreign Investment Promotion Board) in case of investment in agriculture or planation activities. Investing in securities is done through portfolio investment scheme. As per this scheme, NRIs can select one branch designated by RBI for transaction related to investment. The transaction then can happen through the specified branch for stocks and convertible debentures. This can be repatriable or non-repatriable depending upon the situation.

Investment with Repatriation clause:

Investment in domestic mutual fund, bonds, term deposit with companies for at least 3 years, and Government securities are allowed with repatriation benefits.

Investment without repatriation benefit:

Investment in the form of capital contribution in any proprietary or partnership firm is allowed but it is not repatriable. NRIs can also invest in new issues through this route.

Other investment:

Other investment such as money market mutual funds, deposit, non-convertible debentures, and commercial paper are allowed but without any repatriation benefit.

Investment in immovable assets:

NRIs can invest in real estate. They do not need any permission to invest in real estate except in cases where they want to acquire farm land, plantation, and agriculture land. The repatriation clause needs to be looked at in individual cases. The Government allows up to 100% investment in real estate development (including housing societies and commercial space) as well as financing of housing and commercial development.

There are facilities available returning NRIs so that their investment in foreign countries are not disturbed. They can also open resident foreign currency account to freely move money between NRE/FCNR accounts.

Important points:

NRIs can invest in stocks by directly buying stocks of specific company or through mutual fund. Indian market offers variety of mutual funds such as sectoral fund that invests in a specific sector, mid-cap fund that invests in mid cap firms, growth fund that invests in emerging companies, value fund that invests in stable and old companies that give consistent results. There are India specific funds available for investment.

It is important to ascertain the credentials of advisor for any investment requirement. NRIs are considered easy source of money and there is no dearth of quakes to exploit the situation.

You should apply for a PAN card and then open demat and trading account linked to your NRE/NRO account which can be used for trading purposes.

If you are concerned about repatriation clauses, make sure you understand the types of accounts and policies where repatriation is allowed. Open the appropriate account and invest in right instruments to avail repatriation benefits. In most if the cases, repatriation is allowed after a lock in period of 3 years.

-----------------------------------------------------------------

Also, know how to buy mutual funds online:

1) DSP BlackRock Mutual Funds:

http://prajnacapital.blogspot.com/2011/05/buying-dsp-blackrock-mutual-funds.html

2) Reliance Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-reliance-mutual-funds-online.html

3) Birla Sunlife Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-birla-sunlife-mutual-funds.html

4) UTI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-uti-mutual-funds-online.html

5) SBI Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-sbi-mutual-funds-online.html

6) Edelweiss Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-edelweiss-mutual-funds-online.html

7) IDFC Mutual Funds:

http://prajnacapital.blogspot.com/2011/06/buying-idfc-mutual-funds-online.html

Understanding Your Cibil Credit Information Report

WE ARE all familiar with the anxiety and uncertainty that we feel when applying for a loan. After all, it's the lender who decides whether we can own our dream home, our first car, or whether our children can pursue higher education. In a nutshell, a better life depends on the lender's decisions. While other factors do play a part in the lender's decision, the Cibil Credit Information Report ( CIR ) plays a crucial role in a lender's decision to approve a loan application. Previously, lenders would treat all loan seekers equally. Each applicant, if approved by the lender's internal credit policy, would be charged at the same interest rate for a particular loan size and purpose. The lenders would charge a higher interest rate to all the borrowers, in order to compensate for the possible default of a small portion of the loan disbursed. In other words, it's like a professor (the lender) punishing an entire class (borrowers) for the mischief played b...

How much to invest in gold ?

Invest In Tax Saving Mutual Funds Online Download Tax Saving Mutual Fund Application Forms Buy Gold Mutual Funds Call 0 94 8300 8300 (India) Let your motivation dictate the share of the yellow metal in your portfolio Enough has been said and written about gold as an investment option. The latest argument is that the craze for gold among Indian households is endangering our country's balance of payments. The policymakers are busy trying to find ways of discouraging investment in gold, but if households keep the common good in mind, they would be paying the market price for gas cylinders as they do for, say, their mobile phone bills. After all, private decisions are driven by private motives. So, how should a household look at gold from its own perspective? Gold is primarily acquired for its merit as a store of value. Even if the worst crisis hits a family, the gold that it holds could be put to use anywhere in th...

Time-tested methods to pick a good mutual fund

Proper understanding of a fund is important as it enables investors to keep a tab on its actual performance THERE are various types of mutual funds and one way of segregating them is on the basis of active or passive management. Th is makes the understanding of the nature of the fund easy for a lot of investors, as it shows the basis on which investment decisions will be made. Some funds also have a mixture of both active and passive management. Su ch funds need to be considered carefully if they are to be selected as an investment avenue. Here is a look at the manner in which such funds operate and its impact on decision-making. Mixture : The selection of the portfolio of an equity oriented mutual fund can be done in an active manner. The fund manager can take the decision about which stocks should be bought and sold by the fund. On the other hand, there can be a passive fund where the decision making is not in the hands of the fund manager as a specific index is followed for...

Save Tax With Mutual Funds

Download Tax Saving Mutual Fund Application Forms Invest In Tax Saving Mutual Funds Online Buy Gold Mutual Funds Leave a missed Call on 94 8300 8300 Mutual funds are ideal as long term investment avenues for retail investors. To encourage investments in this avenue, the Government of India offers investors a spate of tax benefits thus ensuring maximum benefit from mutual funds held beyond a year. Sample some of the key benefits and refer to the table for a detailed list of tax rates for different types of schemes · Avail deductions under Sec 80C of the Income Tax Act by investing up to a maximum of Rs. 1 lakh in designated Equity Linked Savings Schemes (ELSS). Such investments have a compulsory lock in period of 3 years. · First time retail investors in equity with a gross total income of up to Rs. 12 lakh can invest up to Rs. 50,000 in specific MF schemes un...

Diversification is key to gain more

Even those who prefer debt for its safety are looking at more options It is not often that you find more than a couple of asset classes producing good returns at the same time. Invariably, assets such as gold and equity don't perform in tandem, and hence it was easier to allocate to them in line with the risk profile of the investors. In the last couple of quarters, however, more than one asset has turned attractive - gold, debt and equity. In line with the trend, you even have monthly income plans with a combination of more than two assets. In the past, those who stuck to debt were a different class of investors who didn't wish to take risk with their money. The changing lifecycles and the growing integration of investment markets across the globe have pushed even individual investors to embrace the concept of asset allocation. Hence, you have individuals who were using debt to park profits being prepared to take advantage of other assets. For instance, when the...

Invest in Tax Saving Mutual Funds	Download Any Applications
Transact Mutual Funds Online	Invest Online
Buy Gold Mutual Funds	Invest Now

Invest in Tax Saving Mutual Funds	Download Any Applications
Transact Mutual Funds Online	Invest Online
Buy Gold Mutual Funds	Invest Now

Prajna Capital - An Investment Guide

Search This Blog