Investment is a critical decision that surrounds you with lots of puzzles. This information hides wealth management solutions via investment opportunities for 17.4 million NRIs, PIOs and OCIs.
Let’s get down for some interesting facts and investment tips.
Investment Opportunities In India
Being lived in a foreign country does not mean that investment opportunities will be as interesting as your income is. They may or may not be good enough to bring along a hefty return. On the flip side, you can be sure about India. It is an emerging economy with a staggering growth of seven percent. A recent PwC report projects that this trend will continue for the next 15 years. By 2050, it will trail only China, which will be on the top of the world’s economies.
This is the only reason that the Indian diaspora runs ahead ( $79 billion) of China ($67 billion) and Mexico ($36 billion) in terms of inward remittance.
Therefore, you, being an NRI, can choose it over other countries. If you look for precisely the best investment options for 2019 in India, go through these non-resident investment tips.
Where can NRI invest money in India?
Realty Sector: A report by the Reserve Bank of India (RBI) states that the realty sector flashes first in the mind of non-residents. But still, you should step back if you’re likely to join the herd of non-residents because of these risks:
- High transaction cost
- Illiquidity
- Delayed construction
- Probability to be cheated by the developer
If you still intend to stick to this investment option, you should think seriously over the ultimate motto-investment or buying it for the end use.
Tips to invest in realty sector for the end use:
- Residential prices have been significantly stable in most of the metro cities over the past few years.
- The transaction in this sector has been shifted to transparency, which is identified by the eased norms for the NRI investment.
- Developers now offer customized housing solutions, such as smart houses with international settings.
- Commercial realty sector has a better propensity to generate income.
- Good rental income and capital appreciation for A Grade offices, IT parks, logistic centres and REITs (Real Estate Investment Trusts), as commercial property can yield 6-10% rental income whereas a residential property can generate 1.5% or 3.5% rental income.
- The Foreign Exchange Management Act (FEMA) and the Reserve Bank of India regulations do not interfere on legal terms, provided that you have not invested in any agricultural land.
- You can make payment to the account of the property dealer via the funds in your NRO account, NRE account or FCNR account in any Indian bank.
- The repatriation from the sale of a property must not exceed $1 million in a financial year. But, this amount can exceed if it is an inherited property.
- You need to withhold TDS from the price payable to the property dealer. If your property values for more than INR 50 lakh, you need to deduct TDS at 1% of its total value.
- In case of rental income capital gains, you have to pay tax similar to what amount a citizen pays. The tax rate could maximize upto 30% and the surcharge shall be based on the total income.
- The capital gain arising from the sale of immovable property shall be taxed at the rate of 20% or more plus surcharge.
- If it comes to long-term capital gains, the tax will be levied up to 30 % together with applicable surcharge.
However, there are bonds and mutual funds or equities, which could levy 15% and 10% tax on short and long term equity respectively if the capital gain exceeds INR 1 lakh. In case of debts, the tax shall be 30% and 20% with indexation for short and long terms respectively.
