NRIs are looking for the Best NRI investment options in India but the problem is that NRIs tend to succumb to marketing gimmicks by sellers (mostly bankers) and end up buying products that they don’t need. It’s important that NRIs first should look at their goal & risk profile – then only hit search for NRI investment in India. High Return -NRI Investment In India: Direct Equity: An NRI can invest in the Indian stock market. To do this, he needs to open a Portfolio Investment Scheme – commonly known as a PIS Account. This can be linked to a Demat account which can be opened with any registered stockbroker in India. Returns in the Indian stock market are high over the long term but not without volatility. Equity investments have the ability to beat inflation and make your wealth grow. Risk is also higher compared to FDs and PPFs in any stock market-related instrument. You should only make informed decisions. If the investment is sold within 1 year of purchase, the tax is 15%. If the investment is sold after a year, there is a 10% tax. NRIs can open a trading account but they can’t do day trading in stocks – they can only sell the stocks that are already delivered to them. Mutual Funds: NRIs except for the USA and Canada can invest in Indian Mutual Funds. NRIs from the US and Canada have certain restrictions and can buy only a select few Mutual Fund schemes. (even other fund houses request for additional information at the time of purchase & in a few cases even at the time of redemption) Depending on risk profile, an NRI can invest in equity funds, balanced funds, debt funds, liquid funds, and MIPs. The gains on the sale of non-equity funds within 3 years of holding will be considered as short-term capital gains. It will be taxed at 30%. Gains on the sale of non-equity funds after 3 years are long-term gains. They will be taxed at 20% after indexation. Taxation of Mutual Fund for NRIs is more or less the same as Resident Indian but for NRIs Tax is Deducted at source (TDS) by Mutual Fund Companies. Check Detailed Post on TDS for NRI & how to get a refund Good Indian mutual funds give returns that can beat inflation in long term. They are managed by professionals so they are less risky in comparison to direct stocks. There are various options for investing in Mutual Funds. You can use SIPs for regular investments and SWPs for regular withdrawals. Equity-linked savings schemes or ELSS have become one of the most favored tax saving instruments for all including NRIs if they have some income in India. Real Estate: NRIs can invest in residential real estate and commercial real estate. They can avail of loans in India to buy property. NRIs are not allowed to invest in farms, agricultural land, and plantations. If you invest carefully in reputed properties, it can appreciate quite a bit. But it might be tough to stay updated from far away and it is difficult to manage if there are some documentation or any processes to be done The sale of house property after 2 years of purchase is considered a long-term capital gain, and a TDS of 20% is applicable. The sale of house property within 2 years of purchase is considered as short-term gain and a TDS of 30% is applicable. buyer shall deduct TDS at 20%. You are allowed to claim capital gains exemption by investing in house property in India as per Section 54 or investing in Capital Gains Bonds as per Section 54EC. You can also deposit your gains in a PSU bank or other banks as per the Capital Gains Account Scheme, 1988. Claim this as an exemption while filing returns and you will get a refund.Till a few years back property was one of the favorite Best NRI Investment India but now they have seriously started considering financial investments like Mutual Funds. Note – Real estate investment had not seen much appreciation in the last decade but 2023 looked better. End users have started taking interest in buying bigger and better houses – this means some price appreciation. NPS: NRIs can open National Pension Scheme accounts. Now there is an option of opening an NPS account as well if you have a PAN card or Aadhaar card. NRE or NRO accounts can be used. If you are an NRI between the ages of 18 and 60 years, you are allowed to open an NPS account with a bank in India called the Point of Presence. You can choose the asset classes in which your funds should be distributed. If you do not choose, automatic distribution across asset classes as per age will be done. For an investor below the age of 60 – A minimum of 80% of the total investment will have to be annuitized and withdrawal is limited to a maximum of 20% If the total corpus is less than Rs. 1,00,000, the entire sum can be withdrawn The annuities and the maturity account are taxable. For an investor who is 60 years or above A minimum of 40% of the total investment will have to be annuitized and withdrawal is limited to a maximum of 60% If the total corpus is less than Rs. 2,00,000, the entire sum can be withdrawn The pension/annuity will be paid in INR. It is best to open an NPS account with the same bank where the NRE/NRO account it. It may not be the best bet considering the withdrawal rules, illiquidity and taxation if there are better alternatives. A small amount can be invested in it is required only if the NRI is sure to settle in India post-retirement. ULIP: ULIPs or other insurance products are sold to NRIs by bankers to maximize their earnings in the short term as these products have heavy upfront commissions. We normally do not suggest mixing insurance & investments but even if you are offered such products – do detailed research before signing dotted lines.