It is an old proverb that savings at a young age can play a great role in old age. Nowadays ample investment options are available with the investor. Globe has become the village now and as there is no barrier in investment worldwide. Certainly, if we invest huge amounts in that case certain permissions from the statutory authority are required but in the era of fifth generation there is not much panic.
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Definition of NRI
Section 6 of the Income Tax Act, 1961 has stipulated the definition of the NRI. It is broad and wide, in nutshell NRI is a citizen of India who has spent less than 183 days in India in the financial year. Basic difference is NRI is the citizen of India but they do not pay tax in India.
Objectives of the Investment
Conversion of foreign currency to Indian rupees is most of the time high. Exchange rate proves beneficial for NRIs. India is a developing country as return chances are high in India than developed countries, apart from this there are several other reasons of investment, it may very most of the time but some common object are narrated here :
- Procure properties in native : Most NRI invest with a purpose to procure property in the native either for family or for self use during the last days of life. Its emotional reason for many NRIs to invest in immovable properties in India.
- Retirement :Youth of today is highly foreseeing and applying for vision before taking any decision. To enjoy the retirement life happily and peacefully, investment at an early age gives peace of mind and happiness.
- Return : As we know India is a developing country hence here is the high chance of Return on Investment and with this vision investment in developing nations is highly recommended to the NRI.
- Family upliftment: Investment is one type of spending with assured return. By investing some dollars in the rupee may give a sufficient amount to be spent for the family for their needs.
Investment options for NRIs in India
There are two routes to invest in the India, in one route if investment crosses the certain limit prescribed by the Government, in that case permission of Reserve Bank of India and concerned Authority is required, and on another hand in small investment i.e. up to certain limit investment is allowed without prior permission of any authority. Financial Market is emerging market and there are various long- and short-term investment options are available.
- Mutual Funds : Mutual Fund is a large pool of money and secured as it is strictly regulated by the SEBI for the Investor’s protection. It is managed by expert financial and portfolio managers. Its return is subject to the index fluctuation as it is riskier than fixed deposit but return in it is higher than fixed deposits. NRI needs NRO Account to invest in the mutual fund for easy transfer of money through virtual mode.
- Real Estate: It is an old investment plan but still in trend. Real estate market in India is the most progressive after the IT sector. NRI can invest in the same and can let out the same for monthly income. In it investment is high and return gradually increases. Moreover, it is not worth the liquidity needed.
- Bond : It is risky investment but it’s a good option to invest huge amount. Majority Bonds have lock-in period of certain year which varies sector to sector. Its return is taxable up to 20%. There are following types of bonds available to invest.
- Non-convertible Bonds;
- PSU Bonds;
- Perpetual Bonds
- Fixed Deposits : Fixed deposits are very famous type of investment for middle class families. NRI can invest in the same at the rate 7% to 9% approximate. Its return is fixed but its safest investment by NRI. To invest in its NRI must have any one of the account from the below mentioned:
- Non Resident External Account (NRE)
- Non Resident Ordinary Account (NRO)
- Foreign Currency Non Resident (FCNR)
- National Pension Scheme (NPA): Indian citizen can invest in this scheme for peaceful retirement. It has two tiers. Investor can choose tier as per his requirement.
- Government Securities : Government also provides certain investment options like T- Bills. Its safest investment. Various Government bond are in existence which provides good investment opportunities in various sectors.
Conclusion
In foreign countries personal loans available at very low rates for NRIs. It would be worth decision for the investor to take a loan on low rates and invest them in India at high interest rates can prove beneficial for NRIs to get handsome return on investment in India. Financial Market is wide and limitless only a wise entry on the right time can change the future of the Investor.
