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Non- Resident Indian is termed as a "person resident outside India". Clause 2(W) of FWMA 1999 indicates that "A person resident outside India" means a person who is not resident in India. An NRI is a Person Resident outside India who is a citizen of India or a Person of Indian Origin. A Person resident outside India is a person who has gone out of India or who stays outside India, in either case- For or an on taking up employment outside India, or - For carrying on outside India a business or vocation, or - For any other purpose, in such circumstances as would indicate his intention to stay India for an uncertain period.
Equity trading is the buying and selling of company stock shares. Shares in large publicly-traded companies are bought and sold through one of the major stock exchanges, such as National Stock Exchange, Bombay Stock Exchange which serve as managed auctions for stock trades. Stock shares in smaller public companies are bought and sold in over-the-counter (OTC) markets. All the Buying and Selling has to make through the Authorized Stock Broker only.2. Mutual Funds
A Mutual fund is a company that brings together money from many people and invests it in stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the fund owns are known as its portfolio.
The Foreign Exchange Management Act 2000 defines the Portfolio Investment Scheme, permitting non-resident Indians and foreign Individual investors to buy and sell shares of Indian companies, and units of domestic mutual funds at any of the Indian stock exchanges. Purchase of shares of any company from the secondary market is subject to a ceiling of 5% of the paid-up share capital and 5% of the paid-up value of each series of debentures
NRE (Non - Resident External) - Repatriable
Repatriable savings bank account means you can take back your investment money to your overseas in this case you need to open this account.NRO (Non - Resident Ordinary) - Non - Repatrible
Non- Repatriable savings account means our investment will be remain in India in this case you need to open this account and you have to give Indian address proofs also.PIS - Portfolio Investment Scheme
The PIS account shall be exclusively used for transaction under Portfolio Investment Scheme (PIS) involving shares purchased under this approval and for sale thereof. No other transactions whatsoever shall be routed though this account as per RBI guidelines. (This account is common for both category i.e. NRE& NRO)
Both purchase and sales contracts in original/electronic form shall be submitted to the bank within 24 hours of the execution of the contract to enable us to report the same to the Reserve Bank of India.
The NRI shall not pledge shares for giving load to a third party with obtaining prior permission from Reserve Bank of India.
The shares etc acquired by the NRI under this permission can be sold through stock exchanges in India without any lock in period. However NRI shall not engage in short selling and shall take delivery of the shares etc purchased and give delivery of the shares etc purchased give and delivery of the shares etc sold. Sale proceeds of such shares etc may be credited to NRE A/C and dividend or income earned thereof may be repatriated or credited to the NRE/FCNR/NRO account of the NRI subject to payment of applicable taxes.
Shares etc acquired shall not be transferred out of the name of beneficial ownership of NRI by way of gift (except by NRI's to their relatives as defined in section 6 of Companies Act 1956 or to a Charitable Trust duly registered under the laws in India) or sold under private arrangement with out prior approval of Reserve Bank of India.Portfolio Investment Scheme (PIS)
NRIs are allowed to invest in shares of Indian companies, by RBI, under Portfolio Investment Scheme (PIS), in secondary market through a registered broker of a recognized Stock Exchange. RBI Circular No. 13 dated November 29, 2001 has prohibited OCBs to invest under PIS in India.
The guidelines of Reserve Bank of India in respect of ceiling on investments are as under:
Note: Transactions covered under PIS: Only secondary market purchase and sales of shares of Indian companies by NRI's are within the of the PIS scheme.Securities purchased as a resident individual are not covered under this scheme.Derivative segment transactions or Mutual fund unit purchases are not within the ambit of the PIS scheme
Shares purchased through IPO's (Initial public offers) Sale of shares The PIS allows for sale of shares, bonds and debentures by NRIs to residents through private arrangements with the approval of the RBI. General authorization from the RBI is also available for transfer of shares, bonds and debentures by way of gifts to resident close relatives For sale or transfer of shares and debentures of Indian companies to other NRIs, no permission is required from RBI. The transferee NRI, however, would require permission for purchase of the shares.
Short-selling or selling the shares bought by NRI investors before delivery is prohibited. Repatriablity of PIS Proceeds of sale of stocks purchased under the PIS from NRE or FCNR accounts or from foreign remittances are repatriable. Investments made in the PIS from NRO accounts are not eligible for repatriation.
A combination of repatriable and non-repatriable investments under the PIS is permitted, though these would have to be operated through NRE and NRO accounts respectively. Exclusive NRE and NRO accounts have to be maintained for PIS, which can be held by joint account holders. The RBI issues a "watch list" which informs NRIs and FIIs of the companies that have reached their maximum ceiling on investments under PIS. A "caution list" sends an alert on the investment ceiling nearer to 2% of the upper limit.
NRI repatriation is allowed only by obtaining special permission of the RBI on the ground of adversify etc. and subject to conditions as specified in the permission.
NRIs are allowed to repqtriate the funds held in their NRO A/c for:
Education of their children, where they can spend up to USD 30000 per academic year. The medical expenses abroad of the account holder or his family members up to USD 100000.
Although, this individual limit has been enhanced to an overall limit of US$ 1 million, as effective from 13 January 2003 subject to further review by RBI. This can be considered aggregate of remittances of proceeds of immoveable property held for more than 10 years, proceeds of inherited property, remittance for education and medical purposes.Tax oblications
Investors under the Portfolio Investment Scheme are liable to pay Capital Gains Tax on their investments which depends on the tenure of their stocks. Prevailing rates are deducted at source by the designated bank.
If an NRI holding a share more than 12 months means there is no tax that is long term investment or he holds for 3 months means that is short term investment that include tax
Investment in Indian equity provides a promising investment opportunity in terms of attractive returns and an effective tool for portfolio diversification. Private Equity investing consists of buying equity. Ultimately, private equity investors seek to harvest investments in order to generate substantial returns. We suggest that such attractive investment opportunities in Indian Stock Markets equity sector and offer optimal investment opportunities to its NRI clients. All the buying and selling transactions have to be made an Authorised Stock Broker only like us.
A mutual fund is a company that brings together money from many people and invests it in stocks, bonds or other assets. The combined holdings of stocks, bonds or other assets the fund owns are known as its portfolio. Each investor in the fund owns shares, which represent a part of these holdings Mutual funds are one of the best investments ever created because they are very cost efficient and very easy to invest in (you don't have to figure out which stocks or bonds to buy). And we are dealing with all leading Mutual Funds.