Finschool By 5paisa


Tips for NRIs to Invest in Indian Stock Markets

By News Canvass | Jul 29, 2022

By applying for the Portfolio Investment Scheme, Non-Resident Indians, or NRIs, can invest within the securities market (PIS). For this reason, approved dealers are chosen by the Federal Reserve Bank of India. To get the PIS, the investor must approach the dealers.

  • The NRIs must have a Demat account, which offers an electronic platform for his or her financial holdings, to speculate within the exchange. After obtaining the PIS license, a Non-Resident Indian may open a Demat account.
  • NRIs have the choice of investing in India through an NRE or an NRO account. An NRI can open an external NRE account in India in their name. it’s a repatriable nature and might be accustomed to park their foreign earnings.
  • When investing within the Indian securities market, non-resident Indians should bear the following in mind:
  • Before investing, seek the recommendation of a financial expert: the first quality demanded of an investor is their ability to form wise decisions. search out accredited financial experts who are at home with the share market’s characteristics. Additionally, they’ll assist an NRI in adhering to the relevant tax laws and regulations.
  • Understanding the Tax Consequences: The revenue enhancement Act of 1961 established guidelines for the taxation of capital gains made of the selling of shares. Non-Resident Indians frequently are inclined to disregard how taxes may affect their transaction-related income or loss.
  • Short-term gains are taxed at 15% while long-term capital gains on the sale of equity shares are taxed at 10%.
  • An NRI can prevent double taxes by taking advantage of the various double minimisation agreements that the Indian government has made with other nations. as an example, the double minimization agreement between India and the USA stipulates that only the domestic country’s tax rules apply to capital gains.
  • The Age-Old property Investment: Passive investors typically favour the age-old investing strategy of selecting safe options.
  • These contain bank fixed deposits or asset investments. Investors should therefore remember their other options.
  • Examine the Moves in Investments: When somebody’s status changes from resident to non-resident, they typically lose access to resident benefits such public provident fund accounts. As a result, NRIs must examine their investments.
  • Continuous Use of Resident Accounts: Even after becoming non-resident Indians, NRIs frequently still use their resident accounts in India. Since it’s unlawful in India, NRIs must update the knowledge on their checking account, Demat account, and residency status.
  • Being attentive to the Negative List: Non-Resident Indians don’t seem to be permitted to trade certain equities. One should keep one’s distance from such deals since they carry severe penalties.
View All