You must have seen how the stock markets have moved in the past one year. If you compare the alue of the previous year of the BSE Sensex with the current value you would have noticed a rise in about points.
From a value of around points in May the BSE Sensex is zooming towards points in May The stock markets were regarded as hot potatoes about 4 years back. India has a very large population residing abroad sending huge remittances back home. However it would be wise to remember this saying "Fortunes Are Easily Got But Hard To Be Kept".
So it would be wise to study about the highly volatile Indian market before investing in it. I would like to remind all of you that the team of Financial Planners at IndianMoney.
You can explore this unique Free Advisory Service just by giving a missed call on I would like to end this article with the famous saying by Warren Buffett "Be Fearful When Others Are Greedy And Greedy When Others Are Fearful". The research team at IndianMoney.
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These rules are applicable only for direct investments in equity and not for investments routed through mutual funds. If you are a first time investor it would be wise to focus on Large Capitalized stocks of high quality companies which have stable earnings. You need to note the transaction and brokerage costs involved in the portfolio management service.
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If you are well familiarized with the Indian Stock market you could sign up with a brokerage but your decision making process needs to be sound. You could hire a financial planner who would invest on your behalf and make the necessary decisions in a set of quality stocks and enhance your investments. The NRI has to invest in Indian equities through the Portfolio Investment Scheme as per the guidelines of RBI. The NRI has to open a demat account with a depository participant and a trading account with SEBI registered broker in order to execute trades.
The NRI trades in stocks of the Indian market and the shares which are disinvested by the government of India. The sales proceeds of non repatriable funds can be credited only to the NRO accounts. NRI can open two separate trading and demat accounts on a repatriable and non repatriable basis.
They are also not allowed to transact off market. Contract notes in original for both purchase and sale transactions need to be submitted to the designated bank so that they can update this with the RBI. Rights and Bonus shares are issued to existing NRI shareholders subject to Sectoral cap as may be applicable. Generally there are no fees charged by the broker when the NRI is in India.
Most of the leading brokers will have restrictions on the use of an online platform as this is in conflict with USA Security And Exchange Commission ,as SEC regards the use of internet as same as a telephone call.
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In such cases you will have to transact through an official of the broking house. US and Canadian resident investors can log on to their trading portal to view investment portfolio performances and securities held in their accounts. The first step here is that your existing demat account which holds the shares for long term investments needs to be closed.
This does not mean you would have to sell all your shares. All you have to do is prove that you are an NRI and transfer shares to the PIS account.
The existing demat account will have to be linked with the NRO account. Investors can sell shares and transfer funds to the NRE account up to 1 Million Dollars per year to their country of residence. Since shares were purchased when you were an Indian resident there is a restriction on taking money out of the country which is up to 1 Million Dollars per year.
How NRI's can trade in the Indian stock market
You can continue to invest in the Indian Stock Market by opening a demat account linked to the NRE account albeit with some restrictions. The refunds on loss in the short term can be claimed by filling returns with the Indian Tax Authorities. If you return to India as a normal resident your NRI demat account will get converted to a normal demat account just like any ordinary Indian resident.
If an NRI sells shares of an Indian Company which he had acquired using foreign currency the taxation process will require currency conversion and currency reconversion for capital gains taxation. Most Popular Milestones of the sensex Friday, June 20, Why is it very Essential to have Defensive Stocks in ones Portfolio? Monday, April 7, How to Make Claim on a Health Insurance Policy Wednesday, July 18, ELSS - Utilizing the Power of Compounding Friday, March 14, Why One Must never Neglect Estate Planning Tuesday, January 7, Why Is Inflation Vanishing In India?
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