India has become a global financial hub and a top choice for international investors. Its significant industrial growth and favorable policies over the last two decades make it an attractive destination for NRIs to grow their wealth by investing in various asset classes. At Dinesh Aarjav & Associates (DAA), we provide comprehensive consultancy to help NRIs navigate the complexities of investing in India while maximizing returns and minimizing tax implications.
Economic Growth: India's robust economic growth offers consistent returns across multiple sectors.
Diverse Investment Opportunities: From equities and mutual funds to real estate and Alternative Investment Funds (AIFs), India provides a range of asset classes for investment.
Regulatory Support: Policies like the Liberalized Remittance Scheme (LRS) and tax treaties with multiple countries ease cross-border investments.
Growing Financial Market: India’s capital market is among the most rapidly growing in the world.
Wealth Diversification: Investing in India enables NRIs to diversify their portfolio globally.
At DAA, we offer tailored investment consultancy services to meet the specific financial goals of NRIs. Our services include:
1. Investment Advisory
Guidance on investment options like equity-linked savings schemes (ELSS), unit-linked insurance plans (ULIPs), tax-free bonds, real estate investment trusts (REITs), mutual funds, National Pension Scheme (NPS), fixed deposits (FDs), and public provident funds (PPF).
Expert advice on U.S.-based investments like 401(k) plans and their implications in India.
Support for compliance with FATCA, FINCEN, CRS, and WDF regulations.
2. Tax Planning and Compliance
Advisory on tax implications for different investment instruments.
Assistance with FATCA/CRS disclosure requirements.
Structuring investments to optimize tax efficiency while ensuring compliance with Indian and global laws.
3. Asset Recovery
Assistance in recovering unclaimed shares, fixed deposits, and other dormant financial assets in India.
4. Portfolio Structuring
Creating customized portfolios aligned with your risk profile and long-term financial goals.
Assistance in setting up and managing trading and demat accounts linked to NRE/NRO accounts.
1. Equity Instruments
NRIs can invest in:
Stocks: Through a Portfolio Investment NRI Scheme (PINS) account.
Mutual Funds: Invest in equity mutual funds via SIP or lump sum.
ETFs and IPOs: Direct participation in India’s growth story.
Requirements:
Demat and trading accounts linked to NRE/NRO accounts.
Compliance with SEBI regulations and FATCA norms.
2. Mutual Funds (MFs)
NRIs can invest in equity, hybrid, and debt funds. Key considerations include:
KYC Compliance: Fresh KYC is mandatory upon becoming an NRI.
Restrictions: Investments from the USA and Canada are subject to FATCA guidelines.
3. Fixed Income Instruments
Options include:
Fixed Deposits (FDs)
Government securities and bonds
Non-convertible debentures (NCDs)
Public Provident Fund (PPF) and National Pension Scheme (NPS) accounts
4. Real Estate
NRIs can invest in residential and commercial properties. However, agricultural land, plantation property, or farmhouses are restricted.
5. Gold Investments
Investment avenues include:
Gold ETFs and mutual funds
Physical gold (subject to customs regulations)
Prohibited: Sovereign Gold Bonds (SGBs)
A person who is not a resident of India is considered a non-resident of India (NRI). You are a resident if your stay in India for a given financial year is: 182 days or more 60 days or more and 365 days or more in the 4 immediately preceding previous years In case you do not satisfy either of the above conditions, you will be considered an NRI.
An NRI, like any other individual taxpayer, must file his return of income in India if his gross total income received in India exceeds Rs 2.5 lakh for any given financial year. Further, the due date for filing a return for an NRI is also 31 July of the assessment year or extended by the government.
If there is a rental income in India, then Income tax return need to be filed in India mentioning the PAN and tax to be paid. Also to note, that though holding one property in India is considered as ‘self-owned’, a second property, even if it is not on rent, is considered ‘deemed rented’ and tax needs to be paid for that. You can, however, show 30% of the deemed rental as ‘maintenance cost’. There is no tax to be paid abroad (say, USA) on ‘deemed’ income, but declaring it is important as during repatriation of funds from India, it should not cause any issue.
If an NRI receives income in India, such income is taxable in India, i.e. India as a source state has the right to tax such income. However, the country where such NRI is a resident will also have a right to tax such income as it is the residence state. This way, the NRI will end up getting taxed twice on the same income. To overcome this, India has entered into DTAAs with various countries. It will help eliminate double taxation by allowing the taxpayer to claim credit for foreign taxes paid while filing their return of income in the home country.
No, The Income tax Act applies to all persons who earn income in India. Whether they are resident or non-resident.
In case of resident individuals and companies, their global income is taxable in India. However non-residents have to pay tax only on the income earned in India or from a source/activity in India.
Yes, The dividend declared by Indian companies is taxable in the hands of the shareholders at the rate of 20.00% without providing for deduction under any provision of Income Tax Act.
You can authorize any person by way of a Power of Attorney to file your return. A copy of the Power of Attorney should be enclosed with the return.
Yes, if an NRI’s tax liability is expected to exceed Rs. 10,000 in a financial year, he must pay advance tax. Interest under Section 234B and Section 234C will be levied if advance tax is not paid.