NRI’S

NRIs can invest in new projects or in expansion and diversification projects of existing companies.

INVESTMENT AVENUES FOR NRI’S IN INDIA

NRIs can invest in new projects or in expansion and diversification projects of existing companies. With increasing opportunities for work cropping up worldwide, more and more Indians are opting to migrate to other countries in the search for greener pastures. However, being Indians we still feel the need to stay connected to the place of our birth and therefore, we try to make investments in India through different avenues.

Just have look at some of the Investments options for NRI’s in India:

NRIs can make investments in all the investments options which are available to Resident Indians. However, Persons of Indian Origin can only make investments in non-agricultural businesses in the country.

Yes. NRIs can invest in shares and stocks by:

  • Directly subscribing to shares and debentures of Indian companies on a repatriable or non-repatriable basis
  • Through the Portfolio Investment Scheme
  • Through government securities, certificates and units of UTI through remittances from their domestic accounts or remittances from abroad

An NRI needs to use a:

  • NRE Account (Non-Resident External Rupee Account)
  • NRO Account (Non-Resident Ordinary Rupee Account)
  • FCNR Account (Foreign Currency Non Resident Account)

The 24% Scheme allows Indian companies, except those engaged in agricultural activities, to issue up to 24% of their shares and debentures to NRIs with repatriation benefits.

Similarly, the 40% scheme allows for purchase of equity, preference shares and convertible debentures not exceeding 51% of the face value of each issue. Repatriation of up to 40% of the new issue is allowed. Under this scheme, NRIs can invest in new projects or in expansion and diversification projects of existing companies.

NRIs can invest in:

  • Bank Deposits
  • Secondary markets through Portfolio investment in equity shares/convertible debentures
  • New issues (shares/convertible debentures)
  • Non convertible debentures
  • Mutual funds provided that amount is invested out of NRE/FCNR/NRO account or by inward remittance
  • Domestic (NRO) funds through deposits in Indian companies (including Non Banking Finance Companies if they are registered with Reserve Bank of India) on non repatriation basis up to 3 years subject to certain formalities to be completed by the concerned company
  • Bonds provided that amount is invested out of NRE/FCNR/NRO account or by inward remittance
  • Proprietary or partnership concern in India
  • Immovable property provided that the amount is not invested for the purchase of agricultural land, plantation property or farm house and investments are made from fresh inward remittance or existing non resident account
  • Bank Deposits investment in shares, units of Mutual Funds etc. are exempt from wealth tax in India
  • Interest earned on NRE and FCNR accounts is completely tax-free
  • In 1997, gift tax was abolished. So both the donor as well as the recipient did not have to pay any tax on the gifts received. Consequently people started misusing the vacuum left behind by scrapping of gift tax. There was a widespread transfer of insincere gifts from the non-relatives. In order to fill up this void, Section 56 (2) (v) of Income Tax Act was passed in 2004.
  • As per Section 56 (2)(v) of the Income Tax Act , any amount exceeding Rs 25,000 obtained by a person or a Hindu Undivided Family (HUF) without any consideration from non-relative would be taxed. The only cases exempted were the gifts given during marriage, inheritance left behind in a will or if the payer has died.