NRI (Non-Resident Indian) services cater to the financial needs of Indians living abroad. These services include specialized banking, investment opportunities, and tax advisory to help NRIs manage their finances in India effectively. They aim to provide NRIs with seamless access to financial products and services, ensuring their investments and savings are efficiently managed.
Types of NRI Bank Accounts
NRIs can open different types of bank accounts in India to manage their income and investments. The main types include:
- NRE (Non-Resident External) Account: Allows NRIs to deposit their foreign earnings in Indian rupees. Both the principal and interest earned are fully repatriable and tax-free in India.
- NRO (Non-Resident Ordinary) Account: Used to manage income earned in India, such as rent, dividends, or pension. Interest earned is subject to tax, and repatriation is limited.
- FCNR (Foreign Currency Non-Resident) Account: Allows NRIs to maintain deposits in foreign currency. The principal and interest are fully repatriable and protected from exchange rate fluctuations.
Investment Options for NRIs in India
NRIs have a variety of investment options in India, including:
- Mutual Funds: NRIs can invest in Indian mutual funds, offering diversification and professional management.
- Real Estate: Investing in residential and commercial properties is a popular option for NRIs.
- Equities and Bonds: NRIs can invest directly in the Indian stock market and government or corporate bonds through their NRE/NRO accounts.
NRI Taxation in Mutual Funds
Taxation for NRIs investing in mutual funds in India includes:
- Equity Funds: Short-term capital gains (holding period less than one year) are taxed at 15%. Long-term capital gains (holding period more than one year) are tax-free up to INR 1 lakh, and above this limit, they are taxed at 10%.
- Debt Funds: Short-term capital gains (holding period less than three years) are taxed as per the individual’s income tax slab. Long-term capital gains (holding period more than three years) are taxed at 20% with indexation benefits.
- Dividend Distribution Tax (DDT): Dividends from mutual funds are subject to DDT, which is deducted at source before distribution to investors.