Are you an NRI or about to become one?
And if so, have you been investing in Indian equities and mutual funds, and want to continue investing? Then this article is just for you.
Of course, NRIs and even those of you Indians who have taken up foreign citizenship, can invest in Indian markets. It is important though that you know the right procedures – let us tell you what to do.
Once you become an NRI, your stock market transactions come under PIS (Portfolio Investment Scheme), an RBI scheme. All transactions (buying/ selling of shares) must be done through this account, which is held with a designated bank branch. The bank obtains the PIS approval for you.
As an NRI, you may have only one such PIS account. Also, you may use it only for trading shares; this process does not apply for mutual funds. Do use your NRE account carefully to ensure smooth repatriability.
You may have purchased shares before you became an NRI. For those investments, open a non-PIS account. You cannot use it to make any purchases; just sell shares acquired in IPOs as well as the secondary market, when you were an Indian resident.
Another must-have: A Permanent Account Number (PAN), for those investing in both equities and mutual funds.
As an NRI, you should also be aware that you do not need a PAN to file tax returns. Unless you have a taxable Indian income of over Rs 1.10 lakh, there is no legal obligation to file your tax return.
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