NRIs are looking for the Best NRI investment options in India but the problem is that NRIs tend to succumb to marketing gimmicks by sellers (mostly bankers) and end up buying products that they don’t need.Who is the NRI investor To understand NRI investment in India, it is important to determine that an individual investor is an NRI. An NRI (Non-Resident Indian) is someone who is a citizen of India but not a resident of India i.e. is now living outside India. Residential status of an individual, whether a resident or non-resident, is determined under Section 6 of the Income Tax Act.
Best NRI Investment Options in India 2023
The population of Non-Resident Indians (NRIs) is huge. It is estimated that there are 16 million Indians living outside India as per a UN survey.But as an NRI, you cannot participate in all investments to diversify. But there is some Best Investment Plan for NRIs Where should NRIs Invest in 2023? Let us look at these –
1.NRI Investment in NPS (National Pension Scheme)
National Pension Scheme or NPS could be one more reliable source of investment for NRIs in India. NPS scheme is fully backed by government and allows NRIs to invest in equity funds, debts or a combination of both.
Individuals between the age of 18 years and 60 years can invest in NPS with minimal documents like PAN card and Aadhaar card. You need a Non-Resident External (NRE) account or Non-Resident Ordinary (NRO) account when investing in NPS.
2.Mutual Funds
NRIs except for the USA and Canada can invest in Indian Mutual Funds. NRIs from the US and Canada have certain restrictions and can buy only a select few Mutual Fund schemes. (even other fund houses request for additional information at the time of purchase & in a few cases even at the time of redemption)Depending on risk profile, an NRI can invest in equity funds, balanced funds, debt funds, liquid funds, and MIPs.
The gains on the sale of non-equity funds within 3 years of holding will be considered as short-term capital gains. It will be taxed at 30%.
3.Real Estate
NRIs can invest in residential real estate and commercial real estate. They can avail of loans in India to buy property. NRIs are not allowed to invest in farms, agricultural land, and plantations.If you invest carefully in reputed properties, it can appreciate quite a bit.But it might be tough to stay updated from far away and it is difficult to manage if there are some documentation or any processes to be done
The sale of house property after 2 years of purchase is considered a long-term capital gain, and a TDS of 20% is applicable.
4.NRI investment in Public Provident Fund
An NRI can continue with his/ her PPF account which they opened as a resident Indian. However, if an NRI doesn’t have a PPF account, she/ he can’t apply for the same with non-resident status. NRIs can’t extend their PPF account after the maturity period of 15 years.
5.Fixed Deposit in NRO Accounts
NRIs can invest in Indian currency FDs in NRO.The interest rate is good. The risk is low.Interest on the NRO account is taxable and the tax is computed at 30% of the interest earned. It is deducted at the source.It might be subject to tax in the country you live in depending on certain conditions.
