India has emerged as one of the fastest growing major economies in the world, thus providing plenty of investing opportunities for Non Resident Indians (NRIs). Various factors including government reforms, a strong capital market and a sturdy banking system have only amplified the climate of investment, domestic as well as foreign. This phenomenal growth story has attracted and intensified investments here from all quarters and NRIs having the repute of highest savings rate in the world are looking no beyond than their home country to invest.
Subsequently, the next step for NRIs would be to ascertain how to start investing and take advantage of the growing Indian markets.
This is where RupeeVest comes into the picture - it is an online investment and research platform for Mutual Funds and Corporate Fixed Deposits to help all investors plan and invest their savings in a structured and hassle-free manner using various analytical tools and customized investment solutions.
NRIs can invest in all Mutual Funds open for investments through RupeeVest.
However, NRIs of USA and Canada have the provision to invest in only five Indian mutual fund houses. This constraint is due to the regulatory compliances under FATCA that the AMCs have to go through. The Mutual Fund houses they can invest in through RupeeVest are mentioned below:
It is mandatory for every NRI investor to have an NRE or NRO account with an Indian Bank.
PAN or PERMANENT ACCOUNT NUMBER is mandatory for financial transactions in India.
If you do not have a PAN, kindly follow the link below to get registered.
Steps to open an NRI account with RupeeVest are:
KYC is mandatory for all investors. Non KYC compliant investors need to submit the required documents for KYC compliance along with account activation documents.
The following documents are required for account activation:
|If KYC Compliant||If Non-KYC Compliant|
You need the following documents IN ADDITION TO the documents required for KYC compliant investor:
For minors, the guardian must be KYC compliant. Proof of Date of Birth is also required along with the above mentioned documents.
Net Banking: Investor can make the payment through our website or choose to pay later through the payment link which will be sent to the registered email.
RTGS / NEFT: Investor needs to register the NSCCL account in his beneficiary list to make the payment.
RTGS / NEFT beneficiary details:
One Time Mandate (OTM): Investor has to confirm the payment by clicking on the link received on his registered email.
Cheque / DD: Investor will have to send the cheque to RupeeVest to process the transaction. The payment shall be drawn in favor of “National Securities Clearing Corporation Ltd” and made payable at Mumbai.
Note: The online payment link is valid for 48 hours and on expiry of the same, a fresh transaction needs to be initiated.
The following table elaborates the taxation pattern for NRIs:
|EQUITY ORIENTED SCHEMES|
|Short term capital gain (Holding period <=12 months)||15%|
|Long term capital gain upto Rs 1 Lakh (Holding period >12 months)||NIL|
|Long term capital gain exceeding Rs 1 Lakh (Holding period >12 months) *||10%|
|OTHER THAN EQUITY ORIENTED SCHEMES|
|Short term capital gain (Holding period <=36 months)||According to tax slab|
|Long term capital gain (Holding period >36 months)||
What is DTAA (Double Taxation Avoidance Agreement)?
An important aspect of taxation for NRIs is the Double Tax Avoidance Agreement (DTAA). It is essentially a bilateral agreement entered into between two countries that aims to avoid or eliminate double taxation of the same income in two countries.
To give an example, India has a DTAA with the US. If an NRI based in the US makes short-term capital gains from equity investments in India, he pays 15% tax. Let’s assume the rate for such gains is 30% in the US. The investor will need to pay tax only for the difference in rate i.e. 15% in US. This means he gets a deduction on the tax paid in India from his tax payable in the US.
India has Double Taxation Avoidance Agreement (DTAA) with around 85-90 countries.
Repatriation is the process of converting a foreign currency into the currency of one's own country. The NRI investor has the option to invest either on a repatriable or non-repatriable basis according to their choice. The following conditions must be met while choosing:
Can an Indian resident be my nominee?
Yes, an Indian resident can be your nominee.
Can I invest from a foreign bank account?
No, since Indian mutual fund houses are only allowed to take investments in Indian currency, NRIs can only invest either from NRE or NRO accounts with Indian Banks.
When will the TDS certificate be issued to me?
TDS Certificates (Form 16A) will be dispatched to the investors once every quarter by the respective AMCs.
How is an NRE account different from an NRO account?
NRE account is used to park the foreign earnings of an NRI. They are exempt from tax and both the principal amount and interest can be repatriated.
NRO account is used to manage the earnings of an NRI originating in India. It is taxable and has limited repatriability, the interest amount can be repatriated entirely but the principle amount is subject to repatriation upto USD 1 million net of applicable taxes in a financial year.
Can I appoint a Power of Attorney on my behalf?
No, this provision is not allowed to NRIs as of now.