Understanding Tax Deduction on Educational Expenses
June 9, 2017
How to determine the residential status for tax purposes?
December 7, 2017

Understand the Best Avenues of Investment for NRIs

Video Transcription

 

Let us understand the best avenues of investment for NRIs

Here is a list of some investments for all you NRIs that can fetch high returns in India

FCNR deposits – Simply meaning Foreign Currency Non resident deposit account. This is not a savings account but a fixed account that can be maintained in foreign currency. You can open this account in six currencies, the interest earned on this account is entirely tax free and the proceeds are fully repatriable. The interest rate offered ranges from 2.36% to 2.86% for USD currency deposits. As against this if you invest in the US FDs you typically earn an interest of max 2%.

The second option is

NRE FD account – This investment is for the risk averse investors who want to hold their investments in Indian currency. The proceeds from this investment are fully repatriable although this may involve currency fluctuations. This can be avoided by hedging in currency futures. These FDs offer you a return on investment of 6.5-7% which is at par with the Indian FDs. The interest earned in this account is also tax free.

The third option is

Direct Equity investments – Being an NRI, you can invest in the Indian equity market only through the Portfolio Investment Scheme or PIS route. You may earn high returns through this route although this is a high risk investment.

Other options are Mutual fund investments which are always a safer bet for NRIs than direct equity and Real Estate which is a long term investment. You can purchase a house in India that can be easily given on rent as a source of regular income.

There is a word of caution here for US citizens, green card holders or tax residents since investing in India mutual funds can complicate their US tax reporting.

At H&R Block we have a team of experts who will help you identify the right kind of investment considering your needs and investment goals. Further we also help you in US FBAR, FATCA and PIFIC reportings.

We hope you found this useful. To know more on such topics visit hrblock.in