Investing for NRIs

There are three categories of residents in India under the Income-tax Act - resident, resident but not ordinarily resident and non-resident depending on the number of days spent in India.1 A similar but not identical definition is laid down in the Foreign Exchange Management Act (FEMA). Special rules on bank accounts, investments and taxation have been laid down for non-resident Indians. Bank accounts Non-resident ordinary (NRO) account This is a rupee-denominated savings bank account for non-resident Indians. It is a non-repatriable account, meaning that the money in this account cannot be transferred outside India by its holder. Interest on this account is added to the income of the NRI and taxed like other income. They can also create Fixed Deposits (FDs) from the balance in the NRO account. The interest from such deposits is taxable. They can transfer money from the NRO account

This article was originally published on July 13, 2022.