With rupee touching new lows every week, the non-resident Indians are showing keenness to repatriate money to India or invest in the country. But, by virtue of being a non-resident Indian, they are not allowed to invest in every type of savings instrument in India.
While choosing an investment option one must take care to ensure that it is chosen in such a way so as to reduce the tax liability and secondly, it must also allow you to repatriate it back to your residence abroad easily. Consequently, there are several investment options that NRIs can look into.
Firstly, NRIs must look to invest in Non Resident External Account (NRE) fixed deposits. These deposits are easily repatriable and income from interest on NRE deposits is exempt from tax.
NRO fixed deposits too are an excellent option that not only offer attractive interest rates resulting in higher yields; but also allow you to get a loan of up to 90 per cent of the deposit at attractive interest rates.
Secondly, investments in government bond and securities are safe and if purchased from NRE/ Foreign Currency Non Resident (FCNR) account then it would be credited on sale of these instruments, allowing the maturity proceeds to be repatriated.
NRIs can also invest in Mutual funds on a Repatriable/Non-Repatriable basis as per the provisions of Schedule 5 of the Foreign Exchange Management (Transfer or issue of Security by a Person Resident Outside India) Regulations, 2000.