Apart from knowing which investment avenues are open to you as non-resident Indians, you may also want to know which of these carry repatriation benefits.

According to the Reserve Bank of India, all investments in the equity market including those investments in mutual funds, non-convertible debentures of a company incorporated in India and PSU bonds are allowed on repatriation as well as non-repatriation basis for non-resident Indians.

The two things that however determine repatriation benefit on any investment is- the source of fund for that investment and discharge of tax liability. Mr Sandip Mukherjee, Executive Director- Tax & Regulatory Services, PricewaterhouseCoopers, says that- “Foreign capital invested in India is generally repatriable with capital appreciation if any after the payment of applicable taxes and provided the investment was on a repatriable basis.”

So, it goes without say that funds for the investments which you intend to repatriate should go from only your NRE account- investments made from a NRO account are non-repatriable!! For income that arises from investments in India, non-residents have to for sure pay taxes to the Indian government.

When investing in equities in the secondary market, has to be paid plus the tax for the capital gain on selling the investment. Though long term capital gain on equities is sparred, all short term capital gains are taxed. Short term, for investment in stocks, refers to a holding period of less than one year. On fixed deposits- the interest earned on NRO account is taxable.

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