8/14/2019 According to the laws, NRIs/PIOs/OCBs/ are permitted to open bank account in India.

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Multiple investment options in India to lure NRI funds 

Foreign funds are flowing into India and China as also into some of the other emerging

market economies as they have been among the few star performers when the global

economy is struggling to emerge out of the meltdown.(Source-: http://www.oifc.in/news_dec09_03.asp )

With the Indian economy on a long-term growth curve, non-resident Indians (NRIs) canlook at multiple investment options available to them to park their funds in their home

country. Compared with the returns they may generate by investing in the US or 

European countries, the takings from India will be considerably higher.

Here are the investment options available to NRIs in India:

* Investment in the Indian equities markets, including IPOs

* Investment in mutual funds* Company fixed deposits and non-convertible debentures of companies

* Real estate investments* Government securities

* National Savings Certificates issued by post offices in India

* Deposits in Indian banks

The Indian government is offering several investment facilities to NRIs, persons of 

Indian origin (PIOs) and overseas corporate bodies (OCBs). While NRI refers to an

Indian citizen who resides outside India, PIO refers to an individual who at any time heldan Indian passport, or any of whose parents or grandparents was a citizen of India.

According to the laws, NRIs/PIOs/OCBs/ are permitted to open bank accounts in Indiaout of funds remitted from abroad. The foreign exchange can be brought in from abroad

through an authorized dealer or can be from the funds which are legitimately due to them

in India.

The Reserve Bank of India (RBI) has granted general permission to NRIs/PIOs, for 

undertaking direct investments in Indian companies, under the automatic route purchase

of shares.

 NRIs can make investments in all the investment options which are available to resident

Indians. However, Persons of Indian Origin (PIOs) can only make investments in non-agricultural businesses in the country.

To make payments for investments, an NRI needs to use an NRE Account (Non-ResidentExternal Rupee Account), NRO Account (Non-Resident Ordinary Rupee Account),

FCNR Account (Foreign Currency Non-Resident Account).

(Source -: http://www.oifc.in/aboutcii.asp )

8/14/2019 According to the laws, NRIs/PIOs/OCBs/ are permitted to open bank account in India.

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A ‘24% Scheme’ allows Indian companies, except those engaged in agricultural

activities, to issue up to 24% of their shares and debentures to NRIs with repatriation benefits.

Similarly, the ‘40% scheme’ allows for purchase of equity, preference shares andconvertible debentures not exceeding 51% of the face value of each issue. Repatriation of 

up to 40% of the new issue is allowed. Under this scheme, NRIs can invest in new

 projects or in expansion and diversification projects of existing companies.

Different tax benefits available to NRIs:

* Interest earned on NRE and FCNR accounts is completely tax-free* Bank deposits investment in shares, units of mutual funds, etc. are exempt from

wealth tax in India

* Tax exemption provided for gifts given during marriage, inheritance left behind in a

will or if the payer has died.

Special term deposit accounts: These are reinvestment deposits. Interest earned on thedeposits is added to the principal and compounded at quarterly intervals. The principal

amount together with interest is repaid on maturity of the deposit. Net yield on these

accounts is distinctly higher because of compounding of interest at quarterly intervals.

Cash certificates: All conditions detailed above for Special Term deposits apply to Cash

Certificate Deposits. On maturity, a round sum, for example, Rs 50,000, Rs 100,000, Rs

10,00,000, etc is received. Excellent for long-term deposits.

Thrift deposit scheme: A recurring deposit scheme. Fixed sums are deposited every

month for a fixed period. Compound interest is payable at the same rates as applicable toother term deposits. The same condition as above is also applicable for Non-Resident

Special Rupee (NRSR) account introduced by the Reserve Bank of India.

Ref: - http://www.oifc.in/newsarchive.asp