Non-residential Indians can invest in India just as easily as the residents do. Not only is the investment easy to manage, but it also offers a range of benefits. If you are an NRI, you should be aware of the benefits that non-residents get when it comes to investing in India. Here are some advantages-
1. No taxes levied on interest
If you are an NRI signed on to either a NRO or NRE account, you should start investing in mutual funds. Currently, most banks offer around 9% interest on these investments. While the rate of interest is attractive enough, the real bonus is that the Government of India does not levy any taxes on the interest earned from these investments. This means that you can keep the entire amount to yourself.
2. Profit in the currency of your choice
If you have a repatriable NRE account or a non-repatriable NRO account, you can convert the income from your investment into the currency of your choice. For instance, if you are residing in the US and are investing in mutual funds in India, you can directly earn the profit in US Dollars, which makes the entire process much simpler and streamlined.
However, keep in mind that for mutual fund investments, the principal sum needs to be in Rupees and not in any other currency.
3. Equity investments
The Reserve Bank of India has noted that all NRI accounts can invest their money in Indian equities. However, to do the same, they need to operate either an NRO or an NRE account. You would also need to open a DEMAT account, along with a trading account from a SEBI registered brokerage.
While there are certain limitations for NRI equity investors, these investments still, provide a great method to earn quite a bit of profit.
4. Power of Attorney
After the initial investment capital is paid, you as an NRI account holder can grant Power of Attorney privileges to family members or relatives residing in India. The bank will contact this PoA holder in case of any requests or enquiries. This practice can severely reduce your stress of managing the investment from abroad. Your PoA contact can also make beneficial decisions in your stead in such cases.
Apart from these benefits, individual banks may sometimes offer special discounts or interest rates for NRI investors, which make the entire prospect more attractive. Make sure you compare the rates offered by the different banks and choose the one, which seems the best suited to your needs.
1. No taxes levied on interest
If you are an NRI signed on to either a NRO or NRE account, you should start investing in mutual funds. Currently, most banks offer around 9% interest on these investments. While the rate of interest is attractive enough, the real bonus is that the Government of India does not levy any taxes on the interest earned from these investments. This means that you can keep the entire amount to yourself.
2. Profit in the currency of your choice
If you have a repatriable NRE account or a non-repatriable NRO account, you can convert the income from your investment into the currency of your choice. For instance, if you are residing in the US and are investing in mutual funds in India, you can directly earn the profit in US Dollars, which makes the entire process much simpler and streamlined.
However, keep in mind that for mutual fund investments, the principal sum needs to be in Rupees and not in any other currency.
3. Equity investments
The Reserve Bank of India has noted that all NRI accounts can invest their money in Indian equities. However, to do the same, they need to operate either an NRO or an NRE account. You would also need to open a DEMAT account, along with a trading account from a SEBI registered brokerage.
While there are certain limitations for NRI equity investors, these investments still, provide a great method to earn quite a bit of profit.
4. Power of Attorney
After the initial investment capital is paid, you as an NRI account holder can grant Power of Attorney privileges to family members or relatives residing in India. The bank will contact this PoA holder in case of any requests or enquiries. This practice can severely reduce your stress of managing the investment from abroad. Your PoA contact can also make beneficial decisions in your stead in such cases.
Apart from these benefits, individual banks may sometimes offer special discounts or interest rates for NRI investors, which make the entire prospect more attractive. Make sure you compare the rates offered by the different banks and choose the one, which seems the best suited to your needs.
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