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Investment Options for OCI in India
It is said that home is where the heart is. Therefore, many Overseas Indian Citizens choose India to invest part of their income. This allows them to diversify their portfolio. Some invest in building a nest egg or providing for their family, while others look to make better returns in an expanding economy. No matter what your reason is, investing now is a great time to get started.
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Read this article till the end to know all the investment options for OCI in India.
Different Investment Options for OCI in India
There are five main options for overseas Indians to invest in India. These are:
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NPS
Individuals can subscribe to the NPS and make regular contributions towards their retirement. During retirement, they can take a portion of their corpus and can invest the remaining amount in the annuity. This will fetch the individual regular payments post-retirement. This is an efficient and tax-saving investment option. Overseas Citizens of India are also entitled to the above-stated benefits.
Moreover, as an OCI, you can change the type and amount of your NPS and specify the amount you wish to contribute.
Mentioned below is the eligibility terms for subscribing in NPS:
- You need to be an Indian citizen.
- You must be between 18-65 years of age.
- You need to have completed your KYC.
- If you quit Indian citizenship, you will lose your NPS benefits.
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Stocks
As an OCI, you can find great opportunities in the Indian stock market. You can buy stocks in India's primary and secondary markets for fractions of the cost of foreign shares. The high currency exchange rate makes this possible.
Moreover, Indian stock markets are experiencing a boom despite occasional downturns. The industry has been boosted by a stable political environment and various initiatives to attract foreign investors to India. So, you, as an OCI looking to retire in India, can look at stocks as a great investment option that will provide good returns.
To invest in stocks, you need to open a bank account. You can open one of three bank account types according to the Indian government and Reserve Bank of India rules.
- Non-Resident External (NRE)
- Non-Resident Ordinary Account (NRO)
- Foreign Currency Non-Resident Account (FCNR)
Of these, you can use only NRO, and NRE accounts to invest in Indian stock markets.
Investing in the equity markets of India requires that you deposit funds in Indian rupees to an NRO/ NRE account held at an Indian bank. You must send this money through regular banking channels, such as wire transfers, cheques, demand drafts, and cheques.
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IPO
NRIs and OCIs can purchase stocks of Indian companies via Initial Public Offerings. These offerings can be made through stock brokerages, AMCs, banks, and AMCs. Online applications must be made through your NRO/ NRE account that is linked to Demat or Trading accounts. Some companies have a quota set aside for OCI and NRI investors.
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Real Estate
According to the Reserve Bank of India guidelines, OCI or NRI cardholders can invest in residential or commercial properties. According to the guidelines, one can purchase any number of commercial or residential properties. They are not allowed to invest in agricultural land, plantation land, or farmland. They can, however, inherit the farmland/plantation land/farmland.
Documents required:
- OCI card (In case of OCI)
- Pan card (Permanent account number)
- Passport size photographs
- Address proof
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Proxy Investments
You can also invest by proxy as an OCI in the Indian stock market. This allows you to authorize a friend or family member to trade in the stock markets on your behalf. For this, you will need to sign a Power of Attorney, which is a document that you have signed before a Notary Public. It must also be registered in Indian courts of law.
Additionally, you may also have to provide relevant certificates to banks, AMCs, and stock brokerages, notifying them about the Power of Attorney given to your relative or friend for trading in Indian stock markets.
Wrapping Up
All the investment Options for OCI in India listed above imply that there is no shortage of options for Overseas Indian Citizens to invest and grow their money in India. All the above options are great for providing financial security for the future, wealth development, and excellent retirement options.
Past 5 Year annualised returns as on 01-09-2024
^The tax benefits under Section 80C allow a deduction of up to ₹1.5 lakhs from the taxable income per year and 10(10D) tax benefits are for investments made up to ₹2.5 Lakhs/ year for policies bought after 1 Feb 2021. Tax benefits and savings are subject to changes in tax laws.
*All savings are provided by the insurer as per the IRDAI approved insurance plan.
Tax benefit is subject to changes in tax laws. Standard T&C Apply
~Source - Google Review Rating available on:- http://bit.ly/3J20bXZ
^^The information relating to mutual funds presented in this article is for educational purpose only and is not meant for sale. Investment is subject to market risks and the risk is borne by the investor. Please consult your financial advisor before planning your investments.
#The lumpsum benefit is calculated if policyholder invested ₹10000 monthly for 10 years in the fund with a policy term of 20 years. This Point To Point past performance data of last 10 years has been used to illustrate a scenario for the customers benefit. It is assumed that the past 10 years returns would have also been delivered in last 20 years. This is not guaranteed and not in anyway indicative of what the customer may actually get 20 years from now. The investment is subject to market risk and the risk is borne by the policyholder.
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