One of
the best investment options for NRI’s is the NRE Bank FDs. These assure a
secured, tax free return in India in a secure, stable manner. NRI’s have
invested billions of dollars in the NRE bank deposits and have reaped benefits
as well. This however has begun to change in the recent times, thanks mainly to
the increasing currency risk of INR depreciation.
The
income from NRE bank FD is the nature of an interest, but the income from money
market mutual fund is in terms of capital gain. Traditionally, the interest is
acquired in INR and is then converted to the foreign currency, while the
capital gains are calculated in foreign currency, which thus provides the
benefits of INR depreciation, i.e., better returns.
Hence if
you are an NRI living in a country where you do not have to pay taxes on your
foreign income, you can opt for NRE FD in order to generate a secure, tax free
return in India. But if you live in a country that taxes foreign income, it is
best for you to invest in money market investments.
At
Mahaveer and Singhvi Associates as one of best Chartered accountants in Mysore,
we will help you will all your investments and filing tax returns. Please
contact us at http://www.ca-msa.com/
