India is one of the most promising economies in the world and every smart investor wants a piece of the action
A lot of foreign investment is flowing into the country and the world has its eyes set on the Indian market due to its immense scope for growth.
India is one of the most promising economies globally, and every smart investor wants a piece of the action.
It’s a great way to protect your money from being dependent on the growth of just one economy. What also encourages NRIs to invest in India is that it’s a developing nation and our economy has more potential for growth than mature markets.
This is true across investment modes, with everything from Fixed Deposits to real estate and mutual funds now being accessible relatively easily to NRIs today. Those in it for the long haul may even earn a lot more returns by investing in the Indian market than abroad.
As technology makes managing investments easier, it is likely that more and more NRIs will invest in India. Today one can simply automate investments and get tailored wealth advice from experts, in the future things will be even simpler.
As technology makes managing investments easier, it is likely that more and more NRIs will invest in India. Today one can simply automate investments and get tailored wealth advice from experts, in the future things will be even simpler
Considering the returns, the following options are open for the NRI’s in 2021:
1) Fixed Deposit- NRIs can start FD through their FCNR, NRO, or NRE accounts. The rate of interest depends on the bank, amount, and the tenure of the deposit.
2) National Pension Scheme- An NRI between the age of 18 years to 60 years can open an NPS account with a POP (Point of Presence) in India. You may also open an eNPS account if you have a PAN card or an Aadhaar Card. You may consider using your NRO or NRE bank account to invest in the National Pension System.
3) Direct Equity- NRIs can invest in the Indian stock market directly under the Portfolio Investment Scheme (PINS) of RBI. NRIs are mandated to have an NRE/NRO bank account, a Demat account, and a trading account to invest in the Indian
4) Real Estate- NRI’s need to analyse their requirements and risk profile before deciding to invest in Indian real estate. Investing in real estate in India is a good option as the country is expected to see massive development over the next decade. However, NRIs cannot invest in agricultural land and plantations in India.
5) Mutual Funds- NRIs can invest in mutual funds only through their NRO or NRE accounts. You need to invest in Indian Rupees (INR) and not in foreign currency. The rate of return you get from mutual funds depends on the type of fund (debt, equity, and hybrid) and your investment horizon. You may invest in ELSS a tax-saving mutual fund that qualifies for the Section 80C tax benefit if you have income in India. However, some AMCs have restrictions on NRI investments from the USA and Canada.
6) Public Provident Fund- NRI’s can continue with your PPF account which you opened when you were a resident Indian. However, you cannot extend the PPF account after the maturity period of 15 years. An NRI cannot open a PPF account in India.
7) Guaranteed (Lump sum & Income plans) & Endowments
8) Linked-Investments (ULIPs) investing in Large caps, Midcaps, etc.
9) Pension products
Further, all processing would be completely paperless (digitally) and should complete in less than 4 to 5 working days’ maximum, considering that all necessary documents & procedures are completed online. Minimum investment in India could start as low as US$ 500 a year.
What better, as an Indian-origin you get Good & Services Tax (GST) exemptions/ waiver also up to 18% each year, depending on the product and as you pay from your NRE (Non-Resident External) or your home country bank account (thru SWIFT).
It definitely makes sense to add India as an economy in your overall portfolio to make it stand out in green.
The Deductions Under Section 80C for NRI’s-:
- Insurance premium payment
- Health Insurance Premium under Section 80D
3. Principal repayments on loan for the purchase of a house property
4. Deduction from House Property Income
5. Investments in ELSS
6. Deduction income from interest on savings bank account under Section 80TTA
7. Donations for social causes under Section 80G
8. NRIs can claim a deduction of interest paid on an education loan under Section 80E
9. Children’s tuition fee payment
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