According to the Foreign Exchange Management Act (FEMA) the NRI should invest in Indian stock market. They acquire shares from stock exchange in India such as Bombay Stock Exchange (BSE)/ National Stock Exchange (NSE). Portfolio Investment Scheme (PIS) account is required by regulator to fix or monitor the investment limit by NRI’s in stock market.
Non-Resident Indian (NRIs), and Person of Indian Origin (PIOs) are freely(without restriction) invest in the secondary capital markets in India through Portfolio Investment Scheme (PIS).
NRIs are allowed to invest in mutual funds in India on reconstruction or non-reconstruction basis subject to regulation prescribed under the Foreign Exchange Management Act (FEMA). For general NRI that means, who are not living in USA and Canada. The process of investing in mutual fund is simple as well as for Indian investor.
They have to fulfil certain conditions set by the country they are based in. The Investment can be stopped by the AMC, if the investor moves to USA or Canada as an NRI.
If you are a Non-resident Indian (NRI), you can buy term insurance plan which is specially designed for people who are living outside India. You can buy a plan which secure the future of your love ones and protect them from financial crisis in your absence. Mostly term insurance plan is offered to the NRIs. And plans are available online so that do not the process of medical tests.
Most term policies are purchased by Non-Resident Indians because it is purely protected plan. Term insurance is less expensive than other permanent life insurance plans.
NRI home loan is for them who are not resident in India. But now he is willing to live in India and make a luxury home. So, if you are planning to build a house in India, all you need to contact to the Housing Finance Company or Bank or Non-Banking Finance Company (NBFC) get all information related to the home loan from their home loan department.
Here Banks include HDFC, Axis, Bank of Baroda, SBI, and Kotak are leading providers of home loan fund. These Banking sector provides home loan at affordable price.
As per the guidelines by Foreign Exchange Management Act (FEMA) Non-Resident Indians (NRIs) cannot open a regular account that is designed completely for Indian citizens. If this rule is breached this can attract huge amount of penalties. Also, if account is closed within a year no interest is paid by Bank.
Non-Resident External or NRE Account can be a Savings, Recurring or Fixed Deposit Account where NRIs can deposit their foreign currencies which is refunded to an Indian account. An NRE account is tax-free and it is held on Indian currency.
Fixed Deposits: There are many options are available for NRIs to open an account in any Bank. All NRIs are open an fixed deposits account in any account any Bank by satisfying all the formalities.
The following are characteristic of Fixed deposits account:
1. It contain low risk.
2.No fee and charges are applicable on opening a fixed deposits account.
3.Money invested is held by the Bank.
4.It will be give Fixed returns.
5.Interest earned on NRE or FCNR Fixed deposits are not taxable. However interest earned on NRO Fixed Deposits are taxable in India.
Mutual Funds: Mutual Funds are the best option for the Foreigner investor who are interested in investing its funds in the Mutual funds.
The following are the characteristic of Mutual funds:
2.Fees and charges are applicable.
3.Money is invested in a pool of shares managed by the Fund House.
4.Quantum of return is not Fixed.
5.Returns on equity mutual funds are tax free after one year, which return on Debt Mutual Fund are subject to Taxation
A NRI can open many types of accounts in India. But here I will be explaining only the most popular accounts which are offered by most of the Banks to NRIs. These are as follow:
1.NRE Savings/Fixed Deposit Account
2.NRO Savings Fixed Deposit Account
3.FCNR Fixed Deposit Account
About the following section I will look the feathers and benefits of all the accounts in details. If These content is missing anything, please comment me.