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investment oportunities in mutual funds, real estate for non resident indians

We attempt to bring you latest investment opportunities available in India. We hope the articles and investment options brought to you in these pages enable more informed decision-making. It should not however be viewed as a substitute for professional advice based on the latest legal position and facts and circumstances of each case.

last updated: April 06, 2004
Comparitive Analysis

The table below analyses investment opportunities in India available to Non resident Indians.
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Evaluation Criteria
Investment Avenue
Mutual funds Shares of listed companies Business Real Estate Deposit with bank/ company
Restrictions on investment Freely permitted See FAQ investment in shares of listed companies Upto 100% in most sectors Freely permitted (other than agricultural land, plantation, farm house) Freely permitted
Return

Equity based: High
Debt based: 5-10%
Money Market based: 3-6%

The above returns are only indicative.

Dividend exempt from tax in the hands of the investor. Long-term (> 12 months) capital gains taxed at concessional rate and exempted on re-investment in specified avenues


High

Dividend exempt from tax in the hands of the investor. Tax exemption available on long-term (> 12 months) capital gains in case of shares of specified blue-chip companies as also on re-investment in specified avenues

Depends on sector and business model

Tax benefits available in case of specified locations (e.g. Special economic zones, backward areas) / sectors (e.g. infrastructure).

Returns for Mumbai:

Commercial
8-11%

Residential:
6-9%

Appreciation/ Depreciation in value has not been considered.

Tax exemption available on re-investment of long term (> 36 months) capital gains in specified avenues.

Bank: 1-5% (for NRE/ FCNR based on term and currency)

Company:
6-9% (based on credit rating and tenure)

Risk of loss Equity based: High
Debt based: Low
Money Market based: No risk
High Depends on sector and business model Low to Medium Bank: Low
Company: Medium
Liquidity High High Low - thru unlisted companies Low High
Entry/Exit load 0-2% 0.5-1% 1-5% 10-15% entry load 0%
Procedural simplicity Yes Yes Yes (where FDI is freely permitted) Yes Yes
Repatriation -income and sale proceeds (post tax) Free Free Free See FAQs Existing NRIs Free
Note: Mode of investment in all the cases above is NRE/ FCNR account or remittance from abroad.
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