Financial planning in India for NRIs

For an NRI, it is vital to have an India-centric financial plan in place

Many NRIs may have income sources in India and some of them may also think of settling in India after retirement. India provides many investment opportunities for NRIs and hence, they are on the lookout for the best investment plan in India. Since it is significant for NRIs to plan their finances in India, we tell you how to go about it. 

Take a look at your various financial accounts: You may live abroad, but there may be several accounts in your name back in India. These would include a savings bank, demat, etc.. Once you are an NRI, you have to convert all these accounts into an NRI accounts. An NRO account is required if you have income in India. It is a good idea to consolidate your accounts, as managing them becomes easy. You can also open a PIS (portfolio investment scheme) account that will enable you as an NRI to sell Indian shares on recognised stock exchanges. 

Choose the best investment plans in India: India is a growing economy and both equity and debt returns in the nation are higher than many other developed countries. As an NRI, it is wise to choose the best investment plan in India. You can invest in mutual funds and also in equity shares. However, when investing in shares, RBI has specific guidelines. Investing in real estate is also another option. You can also purchase residential or commercial properties in India. What you need to note however, are tax implications especially if you want to sell any of your properties.

Get health insurance: With rising healthcare costs, a health cover is essential. As an NRI, you would have a health cover in place. Let us say you plan to return to India after retirement; you would then need a health cover in India. Once back in India, you may not be eligible for a health cover as you may have pre-existing diseases. So, you need to plan and get a health cover already. Otherwise, you may look to build an adequate medical fund. 

Figure out your tax liabilities: Income that arises in India is taxable in India itself, however, India has a Double Tax Avoidance Agreement (DTAA) with many countries. This is to avoid tax on the same income twice. DTAA allows you to set off taxes paid off in one country against taxes due in another country. Under the DTAA agreement, NRIs might also be subject to reduced tax rates in India. To avail DTAA benefits, you need to submit form 10F. You also need to obtain a tax residency certificate from the country of your residence.

As we have seen, NRIs need to have investment plans in India to get higher returns!

To get access to NRI banking services and manage your investments in India, click here.