How an NRI can make investments?
ANS: Investment can be made through: a) . NRE (Non Resident Repatriation) account b) . NRO (non-repatriation) account. NRE account : To be funded with remittance from overseas or transferred from other NRE / FCNR accounts. Local credits are not permitted. Both principle and interest are fully repatriable. Interest lying to the credit of NRE accounts is exempt from tax in the hands of the NRI. NRE account : Can be funded by remittance from overseas or through local sources. Interest accrued on Fixed Deposits is repatriable after tax deduction at source. Principal is not repatriable. Interest income, from NRO accounts is taxable. Interest income, net of taxes is reportable. Income/interest accruing during the financial year 1994-95 and onwards on bank deposits and investments held by NRIs with non-repatriation benefits will be eligible for repatriation as under: (a) Up to U.S. $ 1,000 or its equivalent in full and one-third of the balance income earned during the financial year 1994-95;
