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Month: January 2019

Best NRI Investment Options in India in 2019

Best NRI Investment Options in India in 2019

India is turning into a profitable ground in terms of NRI investment. The government has been improvising several legislations and rules to attract investment by NRIs in India in 2019. Here are a few options that are going to stretch to the heights of popularity as the best investment option.

  1. NRE account investment:
  • Can open with minimum amount
  • Can have joint holding, like your spouse or children
  • NRE deposits are tax free in India as they are not counted in your taxable income
  • Higher rate of returns on account deposits, i.e. more than 10%
  • Highly secure and risk-free investment plan for NRIs
  • Easily & freely repatriate or move funds, including interest and principal amount
  • Unique accessibility advantages, like shopping globally, booking air tickets online
  • Can pay bills within the country
  1. Mutual funds investment:
  • Open NRO/ NRE/ FCNR account, besides SIP account for MF investment
  • Manageable from the country where you live in
  • Profit making possibilities soar with the appreciation in the rupee value
  • Can appoint a Power of Attorney to invest on your behalf
  • Tax free mutual fund gains, if they are retained for more than a year.
  • Tax is deducted at a source of the capital gains, if you invest the holdings for more than a year. You have to pay 10% tax at a source of long term capital gains. It turns 15% if income is sourced through a short term capital gain.
  • Debt funds investment (made for 3 years) adds profit to the NRIs income. Presently, 20% tax is levied on its gain with indexation benefits. If excludes indexation, only 10% tax will be deducted.
  1. FPI investment: FPI stands for foreign portfolio investors. The SEBI or ‘Securities and Exchange Board of India Panel’ has introduced a route viz. voluntary retention route (VRR) for the NRIs investment in 2019. It aims at introducing a uniform regime for all foreign portfolio investors. What features it comprises are:
  • Indian diaspora in foreign can directly invest in the Indian companies.
  • NRIs and OCIs can purchase mutual funds units, spend money in private equities and also use the foreign FPI route.
  • They can invest in debentures of the Indian companies and government securities, like treasury bills.
  • They can retain a minimum required percentage of the long term investment in debt for the period of their choice.
  • This investment is free from the macro-prudential and other regulatory prescriptions that are applicable FPIs in debt markets.
  • The Reserve Bank of India will stipulate the amount of investment in India.
  • The NRIs shall have to retain that amount for at least three years.
  • The investor can participate in any currency and interest rate derivative instrument, OTC or exchanged traded to protect their interest rate or currency risk.
  1. Real-Estate investment: There are many factors that make the real-estate an attractive option for NRI investment.
  • Rental income through a property will be an additional source since the prices have been revised a lot in the previous years.
  • Rather than investing in the Tier 1 cities, the NRI community is tilted to the Tier 2 and Tier 3 cities. It’s just because of the infrastructure development via property investment is gaining momentum rapidly in India.
  • The return on property investment is relatively higher if you invest in the commercial property.
  • The weak value of rupees gives dollar-holders strength. The NRIs can invest minimally to buy the property. The discouraged value of the Indian currency enables them to buy more pieces of land.
  • The regulatory norms have introduced more transparency and added accountability on the part of the real-estate development agencies while complying with RERA.
  1. National Pension Scheme: This is a valid investment option for those who have retained Indian citizenship. They can opt for it if they want to re-locate in India after retirement.
  • It offers leverages in the tax as it follows EET (Exempt-Exempt-Tax) layout.
  • The non-residents can attract good returns.

Maternity Leave Incentive Scheme, 2018

Maternity Leave Incentive Scheme, 2018

Global Policy Regarding Maternity Leaves:

Many NRI women in foreign countries are enjoying the benefits of maternity. The natives and NRI career law to deliver maternity benefits in the nations, like Australia and Canada, is sponsored by public funds. If you talk about the UK and Singapore, this sponsorship is borne by the employer and the governments. There are countries like South Africa wherein the employer, employees and the government contribute together to sponsor this law.

Likewise, India is working in the same direction. It’s going to show a silver lining to the women employees by awarding paid maternity leaves.

Amendment in Maternity Benefit Act, 1961:

Do you know a woman will have a right to apply for 26 weeks long maternity leaves?

The Indian government has stretched the duration of these leaves. It’s an outcome of the editing in the Maternity Benefit Act, 1961. However, this amendment was announced in 2017. Before that year, this duration was only 12 weeks long for a woman employee. It’s noteworthy that this Act would be valid for the first two kids.

Aim of Amendment:

This amendment aimed at the health of the women employees, pursuant to giving birth. Also, it will provide a great aide to the infant who necessarily needs maternal care. Predominantly, the mother can ensure safety of her child. That vacation could provide her with unprecedented help. All in all, it’s a positive step in the direction of women’s development in the private sector.

But simultaneously, it’s a big challenge to execute this amended Act adequately and efficiently. The aware private sector employers have started terminating the women employees on an insubstantial ground. They don’t want to sponsor them for such a long duration by awarding paid leaves.

The gender discrimination is already on the surge in the employment sector. A report of the World Bank has pushed the alarm by revealing the comparative employment statistics. It apparently shows a clean sliding in the count of female employees. In 1990, 35 percent women were working. By the end of 2017, the percentage dropped to 27 percent.

This survey report indicates that it’s a discouragement for the women employees in the private sector.

Reimbursement Facility:  

The ministry tabled the Ministry Leave Incentive Scheme on 16 November, 2018. What proposition it came with is a provision of reimbursing seven weeks’ wages to the women employees with a ceiling up to INR 15,000/month or $209 approximately.

This provision would help the government to uproot gender-discrimination. A sudden rise in the termination of the women employees in the private sector is causing a massive rift. It puts a question mark on their credibility.

However, the existing and the latest government jobs bring happiness to the women employees. They would be able to maximize the benefits of the provisions under this law. Also, the employer needs not bear alone the responsibility of ensuring wellness and safety of his female staff.

How does the government fund this scheme?

The implementation of this scheme has two stakeholders, i.e. the government and the society. To fund it, the government has perceived its overall cost, which is likely to be nearly INR 400 Crore or $56 million.

Rather than funding it through the Labour Welfare Cess, it has proposed to draw its fund through taxes received. It’s so because the cess collection is nil in the government treasure.

Downsides of Amended Maternity Incentive Scheme:

The scheme definitely is a positive stand. Yet, some gaps trouble the implementation of this scheme.

  1. The beneficiary would those women whose salary goes up to INR 15,000/ month. It would certainly a bone of contention for the female employees who receive a lesser amount. They can’t be able to fight with the inflation.
  2. Proper monitoring of the effective implementation of this scheme is a challenge. A comprehensive plan of action is needed.
  3. The obligations to be abided by the employers are not drafted yet. The government is thinking to make it obligatory for employers to contribute through provident funds and employee’s state insurance etc..

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