Are you an NRI (Non-Resident Indian) looking for investment opportunities in India? The Indian government has launched several schemes to attract NRIs and encourage them to invest in the country. In this article, we will discuss the Indian government schemes for NRI and how you can benefit from them.
Introduction
India is a rapidly developing country and is one of the fastest-growing economies in the world. NRIs are an essential part of India’s growth story as they contribute significantly to the country’s economy. The Indian government has launched several schemes to attract NRIs and encourage them to invest in India. These schemes offer various benefits, including tax exemptions, higher returns, and repatriation of funds.
Understanding NRI
Before we discuss the Indian government schemes for NRI, let’s understand who qualifies as an NRI. An NRI is an Indian citizen who stays outside India for more than 182 days in a financial year. NRIs are allowed to hold savings accounts, invest in the stock market, and buy property in India.
Indian Government Schemes for NRI
The Indian government has launched several schemes to attract NRIs and encourage them to invest in the country. Let’s take a look at some of these schemes:
NRI Investment in Public Sector Banks
NRIs can invest in public sector banks in India, such as State Bank of India, Bank of Baroda, and Punjab National Bank. NRIs can invest up to 20% of the paid-up capital of these banks. The investment is subject to a lock-in period of three years.
Foreign Currency Non-Resident Bank Deposits (FCNRB)
FCNRB is a term deposit account denominated in foreign currency. NRIs can invest in FCNRB accounts for a minimum period of one year and a maximum period of five years. The interest earned on FCNRB deposits is exempt from income tax.
Non-Resident External (NRE) Account
An NRE account is a savings account that NRIs can open in India. The account can be in Indian Rupees, and the funds in the account are freely repatriable. The interest earned on NRE accounts is tax-free.
Non-Resident Ordinary (NRO) Account
An NRO account is a savings account that NRIs can open in India. The account can be in Indian Rupees, and the funds in the account are not freely repatriable. The interest earned on NRO accounts is taxable.
National Pension Scheme (NPS)
The National Pension Scheme is a voluntary contribution-based pension scheme launched by the Indian government. NRIs can invest in the NPS and contribute towards building their retirement corpus. The contributions made towards the NPS are eligible for tax deductions.
Sukanya Samriddhi Yojana (SSY)
SSY is a savings scheme launched by the Indian government to encourage savings for the girl child’s education and marriage. NRIs can open an SSY account for their daughters or granddaughters below ten years of age. The interest earned on SSY accounts is tax-free.
Atal Pension Yojana (APY)
APY is a government-backed pension scheme launched to provide financial security to people working in the unorganized sector. NRIs can invest in APY and contribute towards building their retirement corpus. The contributions made towards APY are eligible for tax deductions.
Bharat Bond ETF
The Bharat Bond ETF is an exchange-traded fund launched by the Indian government. NRIs can invest in the Bharat Bond ETF, which invests in high-quality bonds issued by public sector companies.
Real Estate Investment
NRIs can invest in real estate in India under the Foreign Exchange Management Act (FEMA) guidelines. NRIs can buy residential or commercial property in India, subject to certain conditions. The rental income earned from the property is taxable in India.
Sovereign Gold Bond (SGB)
SGB is a government security denominated in grams of gold. NRIs can invest in SGBs and earn returns based on the prevailing market price of gold. The investment in SGBs is exempt from capital gains tax if held until maturity.
Pradhan Mantri Vaya Vandana Yojana (PMVVY)
PMVVY is a pension scheme for senior citizens launched by the Indian government. NRIs who are aged 60 years and above can invest in PMVVY and receive a regular pension. The pension received is taxable.
India Post Office Schemes
India Post Office offers various investment schemes that NRIs can invest in. Some of the popular schemes include Monthly Income Scheme (MIS), Public Provident Fund (PPF), and National Savings Certificate (NSC).
Conclusion
The Indian government has launched several schemes to attract NRIs and encourage them to invest in the country. These schemes offer various benefits, including tax exemptions, higher returns, and repatriation of funds. NRIs can take advantage of these schemes and invest in India to earn higher returns and contribute to the country’s growth story.
So, if you are an NRI looking for investment opportunities in India, consider these government schemes and make an informed investment decision.
FAQs about Indian Government Schemes for NRI
Can NRIs invest in Indian stocks?
Yes, NRIs can invest in Indian stocks subject to the Foreign Exchange Management Act (FEMA) guidelines.
Are the returns on NRI investments in India repatriable?
Yes, the returns on NRI investments in India are repatriable subject to certain conditions.
Are NRIs eligible for tax exemptions on their investments in India?
Yes, NRIs are eligible for tax exemptions on their investments in India subject to certain conditions.
Can NRIs invest in real estate in India?
Yes, NRIs can invest in real estate in India subject to the Foreign Exchange Management Act (FEMA) guidelines.
What is the lock-in period for NRI investments in public sector banks?
The lock-in period for NRI investments in public sector banks is three years.
Can NRIs open a Sukanya Samriddhi Yojana (SSY) account?
Yes, NRIs can open an SSY account for their daughters or granddaughters below ten years of age.