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NRIs can invest in new projects or in expansion and diversification projects of existing companies.
With increasing opportunities for work cropping up worldwide, more and more Indians are opting to migrate to other countries in the search for greener pastures. However, being Indians we still feel the need to stay connected to the place of our birth and therefore, we try to make investments in India through different avenues.
Just have look at some of the Investments options for NRI’s in India:
» Can NRIs make investments in India?
NRIs can make investments in all the investments options which are available to Resident Indians. However, Persons of Indian Origin can only make investments in non-agricultural businesses in the country.
» Are NRIs allowed to deal in stocks and shares in India?
Yes. NRIs can invest in shares and stocks by:
• Directly subscribing to shares and debentures of Indian companies on a repatriable or non-repatriable basis
• Through the Portfolio Investment Scheme
• Through government securities, certificates and units of UTI through remittances from their domestic accounts or remittances from abroad
» What kind of an account does an NRI use to make payments for investments?
An NRI needs to use a:
• NRE Account (Non-Resident External Rupee Account)
• NRO Account (Non-Resident Ordinary Rupee Account)
• FCNR Account (Foreign Currency Non Resident Account)
» What are the 24% and 40% Schemes?
The 24% Scheme allows Indian companies, except those engaged in agricultural activities, to issue up to 24% of their shares and debentures to NRIs with repatriation benefits.
Similarly, the 40% scheme allows for purchase of equity, preference shares and convertible debentures not exceeding 51% of the face value of each issue. Repatriation of up to 40% of the new issue is allowed. Under this scheme, NRIs can invest in new projects or in expansion and diversification projects of existing companies.
» What are the investment options available for NRIs?
NRIs can invest in:
• Bank Deposits
• Secondary markets through Portfolio investment in equity shares/convertible debentures
• New issues (shares/convertible debentures)
• Non convertible debentures
• Mutual funds provided that amount is invested out of NRE/FCNR/NRO account or by inward remittance
• Domestic (NRO) funds through deposits in Indian companies (including Non Banking Finance Companies if they are registered with Reserve Bank of India) on non repatriation basis up to 3 years subject to certain formalities to be completed by the concerned company
• Bonds provided that amount is invested out of NRE/FCNR/NRO account or by inward remittance
• Proprietary or partnership concern in India
• Immovable property provided that the amount is not invested for the purchase of agricultural land, plantation property or farm house and investments are made from fresh inward remittance or existing non resident account
»What are the different tax benefits available to NRIs?
• Bank Deposits investment in shares, units of Mutual Funds etc. are exempt from wealth tax in India
• Interest earned on NRE and FCNR accounts is completely tax-free
• In 1997, gift tax was abolished. So both the donor as well as the recipient did not have to pay any tax on the gifts received. Consequently people started misusing the vacuum left behind by scrapping of gift tax. There was a widespread transfer of insincere gifts from the non-relatives. In order to fill up this void, Section 56 (2) (v) of Income Tax Act was passed in 2004.
• As per Section 56 (2)(v) of the Income Tax Act , any amount exceeding Rs 25,000 obtained by a person or a Hindu Undivided Family (HUF) without any consideration from non-relative would be taxed. The only cases exempted were the gifts given during marriage, inheritance left behind in a will or if the payer has died. |
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A WEDDING may be the most important day in your life, but you would do well to focus on the years ahead instead by ensuring that you don’t go overboard.
INVITATION CARD
Invitation cards are the first step to your wedding. The cost of cards could range from Rs 50 to Rs 50,000, depending on the quality, design and other embellishments. What makes it expensive? Engraving, colored ink, multi-folds and large size. Instead, you can opt for simple yet elegant thermographed invitations, black ink and ivory paper. You can even go the eco-friendly way by just mailing ecards for your tech-savvy friends. You can add your personal touch by writing few lines in the mail.
AVOID THE HIGH SEASON
If you are not superstitious, you can save a packet by avoiding the peak wedding season such as March-May or November-February, when venue costs soar. Pick an off-season wedding date and your costs of hiring a venue would be significantly lower. Early birds can clinch good deals. Do your bookings well in advance. Get several quotations and use these as a basis for negotiation.
TROUSSEAU
Every bride wants to look her best on her special day, which means that the scope for compromises is minimal. But you can visit some wholesale dealers to pick up designer fabrics.
VENUE
You could ask your friend to rent her farmhouse to you to throw a wedding bash. Similarly, if your relative is a member of any club or a gymkhana, the banquet hall could be made available to you at concession.
FOOD AND DECOR
Food and décor account for more than 50% of your wedding budget, which means that they can be targeted for carrying out some major cost-cutting. You can use only white linens on chairs. It will look elegant and weigh lighter on your pocket. If you use color linens, the decorator would have to color co-ordinate to keep up the overall visual appeal. More the color, higher the price. Also, you can choose the dessert, depending on the season your wedding is being held in. You can have carrot halwa in November to January and a Mango soufflé in May.
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Here are some steps you can take in order to reduce your tax liability.
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Do you need a house? Does your employer offer Rent Free Accommodation or House Rent Allowance? Then go for it, as the amount gets deducted from your total taxable income. |
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Does your company expect you to wear uniform at work? If so, the expenses incurred on buying and maintenance the uniform will not be taxed. |
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Does your employer provide you with allowance for your children’s education and hostel accommodation? Then use it to claim exemption under section 10 (14). |
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Does your company provide you with a telephone facility in your home? Then it not taxed. However be warned against taking telephone allowance, since it is totally taxable and will increase your taxable income. |
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Opt for the car facility, since the value of the perk is much lower than the actual expenditure incurred on the car. |
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We all have to visit the doctor at some point of time. So save tax by claiming medical reimbursements up to Rs.15,000.00 p.a. But don’t take any medical allowance, since it is completely taxable. |
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If your employer pays Fringe Benefit tax (FBT), then sum of fringe benefits, is tax-free for you. Also if salary is paid in arrears or in advance, claim relief under section 89 (1). |
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Always ask your employer to include dearness allowance and dearness pay along with commissions earned in your salary. It will lower your tax liability on house rent allowance, gratuity and pension. |
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If you are eligible for a pension, always get it commuted, as commuted pension is tax-free for government employees and partially exempted for others. You can get tax relief under section 89(1). |
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If your current employer is participating in an authorized provident fund, and you change your employer within 5 years of joining the firm, ensure your new employer is also a member of the authorized provident firm. It will let you transfer the corpus in your provident fund to the new company without paying any tax. Also insist your employer fix his contribution to your provident fund to 12% of your salary, as it is the highest limit for tax exemption. |
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Plan your retirement or resignation at the start of the financial year in order to lower the tax on retirement benefits. |
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As leave travel concession is not taxed if certain criteria are fulfilled, try to claim this incentive to the highest possible level, without having to pay any tax. |
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If you are eligible for a pension, always get it commuted, as commuted pension is tax-free for government employees and partially exempted for others. You can get tax relief under section 89(1). |
To summarize, first thing to do is to structure your salary so as to minimize your tax liability. This will minimize the need to invest for tax saving. This is because as with any investment, you must have the necessary capital to invest. Also the instruments that tend to be safer have a longer lock-in period with low returns. This means you must keep on investing with fresh capital every year and in turn get meager returns. Those investments with higher returns mean you may not be able to withdraw your money even after the lock-in period, if the value of your investment is lesser than the capital invested. Take all these points into consideration before opting for tax saving plans.
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More deaths are caused each year by tobacco use than by all deaths from AIDS, illegal drug use, alcohol use, motor vehicle injuries, suicides, and murders combined. Smoking harms not just the smoker, but also family members, coworkers, and others who breathe the smoker's cigarette smoke, called secondhand smoke or passive smoke.
Among infants up to 18 months of age, secondhand smoke is associated with as many as 300,000 cases of bronchitis and pneumonia each year.
Because of the variety of health problems that are linked to smoking, the majority of those people would love to be able to quit. But as with any addictive habit, this is often easier said than done.
People who quit smoking often experience severe withdrawal symptoms (both physical and mental), making it hard for them to stick with their goal of quitting
Why is smoking so addictive?
• Blame nicotine, the main drug in tobacco, for your smoking addiction.
• Your brain quickly adapts to nicotine and develops a tolerance for it, meaning you need to smoke more to get the same rush you used to get with just one cigarette. And when you develop a tolerance to a drug, you're usually addicted.
• Over time, the brain learns to predict when you are going to smoke a cigarette and releases the 'anti-nicotine' chemicals. These chemicals make you feel depressed and tired, so you think, 'I need a cigarette!'
How do I quit?
It's never too late to quit smoking and there are many benefits to be gained no matter what age you are when you give up. Here are some quick tips to help you kick the habit:
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Believe in yourself: Believe that you can quit. Think about some of the most difficult things you have done in your life and realize that you have the guts and determination to quit smoking. It's up to you. |
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Write down why you want to quit: Live longer, feel better, for your family, save money, smell better, find a mate more easily, etc. You know what's bad about smoking and you know what you'll get by quitting. Put it on paper and read it daily. |
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Plan ahead: Plan ahead for situations in which you are likely to be tempted to smoke, such as parties, drinking or going out for coffee. Try to avoid these situations in the early stages of your quitting program, or try sitting in the non-smoking section at restaurants, drinking your coffee standing up or with the other hand, or keeping something in your hand when you're talking on the phone. |
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Cut back on cigarettes gradually: Ways to cut back gradually include: plan how many cigarettes you will smoke each day until your quit date, making the number you smoke smaller each day; buy only one pack at a time; change brands so you don't enjoy smoking as much; give your cigarettes to someone else, so that you have to ask for them each time you want to smoke. |
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Know the triggers: Learn what triggers your desire for a cigarette, such as stress, the end of a meal, arrival at work, entering a bar, etc. Avoid these triggers or if that's impossible, plan alternative ways to deal with the triggers. |
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Find another smoker who is trying to quit, and help each other with positive words and by lending an ear when quitting becomes difficult. Visit Forums and Chat Room on the internet to find a "quit buddy". |
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Ask your family and friends to support your decision to quit: Ask them to be completely supportive and non-judgmental. Let them know ahead of time that you will probably be irritable and even irrational while you withdraw from your smoking habit. |
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Do Not Skip Meals: Each puff of nicotine was your spoon releasing stored fats and sugars into your bloodstream. It allowed you to skip meals without experiencing wild blood-sugar swing symptoms such as an inability to concentrate or hunger related anxieties. Don't add needless symptoms to withdrawal but instead learn to spread your normal daily calorie intake out more evenly over the entire day. Don't eat more food but less food more often. |
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Drink lots of water: Water is good for you anyway, and most people don't get enough. It will help flush the nicotine and other chemicals out of your body, plus it can help reduce cravings by fulfilling the "oral desires" that you may have. |
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Begin an exercise program: Exercise is simply incompatible with smoking. Exercise relieves stress and helps your body recover from years of damage from cigarettes. If necessary, start slow, with a short walk once or twice per day. Build up to 30 to 40 minutes of rigorous activity, 3 or 4 times per week. |
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Reward Yourself: Set up a plan for your rewards. Definitely reward yourself after the first day, and the second, and the third. Make them good rewards that you'll look forward to: CDs, books, DVDs, T-shirts, shoes, a massage, a bike, a dinner out at your favorite restaurant, a hotel stay, whatever you can afford. |
If You Fall, Get Up and Learn From Your Mistakes. Yes, we all fail. That does not mean we are failures, or that we can never succeed. If you fall, it's not the end of the world. Get up, brush yourself off, and try again. |
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Banks often have loan expos and melas for home loan seekers. Usually at such events, they will waive the processing charges and some will even offer a lower interest rate to people who book homes and apply for loans during at the venue. While the melas offer great deals, you need to ensure that your home loan gets processed at the earliest so that you don't lose out on the offers, some of which are applicable only to people whose papers get approved or processed during the mela period.
The following preparations may save you some running around and help you fasten your loan processing:
Home loan amount
Let us say your income is Rs 50,000 per month (Rs 6 lakh per annum) and you are paying a rent of Rs 10,000 per month for the flat you live in. Other than this, your monthly expenses are at around Rs 20,000. So that leaves Rs 20,000 that can be used to service the home loan. The EMI on a 20-year home loan of Rs 1 lakh that charges 9.25% comes to Rs 916. Given this, at your income level, you are likely to be given a loan of around Rs 21.8 lakh. The loan amount is arrived at by dividing the monthly amount that can be used to service the home loan EMI (Rs 20,000 in this case) by the EMI for Rs 1 lakh (Rs 916). The ratio thus arrived at is multiplied by Rs 1 lakh to get the home loan amount.
In practice however, it is difficult for the institution to figure out expenses of each and every individual who comes to them for a loan. So, based on household expenditure data and their own their past experience, they assume a certain proportion of income which can be used to service the loan. On the basis of that, they decide on the loan amount. This proportion goes up as the income goes up.
Area of residence
Some banks believe that people residing in certain areas are more likely to repay the loan on time. If, in the past, many people residing in your area have defaulted on their loan with the same bank, then it may be difficult for you to get a loan. In case the loan is granted, then the bank would charge a higher interest rate to manage that risk it is taking.
Dues and other loans
Banks want to make sure you don't have too many loans to repay. The chances of a person defaulting on a loan go up if there are too may expenses — including equated monthly installments (EMIs). Higher number of loans having a term of more than a year may be used by banks to reduce the loan amount or reject the application because such loans, including credit card dues, are also a part of your expenses. Banks know about your debts because Cibil maintains a database they have access to, and can provide input to. A report pulled out from this database contains details on all your dues, including whether they are being serviced regularly.
The paper-work
Before you head for the loan mela, you will need to carry along proofs of your identity, income and the home papers. For identity, you could provide copies of your driving license, permanent account number card, passport or a voter's ID card. The income may be indicated via bank account statements, income-tax returns and salary slips, while a set of property papers too would be needed.
From the builder, you would need a title certificate or a development agreement and a commencement certificate, which is provided by regulatory authorities permitting a builder to start work on a particular plot. Partnership deeds or third-party agreements would be needed depending on the type of property that is being developed by the builder. If you are about to take a loan for a ready flat, then occupancy certificate may be needed.
Check with the bank whether it has financed someone else residing in the project you plan to buy your home in. That’s because a bank that has sanctioned a loan for someone else in the project would have already done its technical and physical checks of the project. This could save you approval time.
Whether the bank is receptive to your application depends on a host of factors, such as your income, the source of income, salary structure and age.
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