importance of forex

India’s population living abroad is the largest in the world with 1.6 crores (16 million) people living outside the country in 2015, according to a latest UN survey on international migrant trends.

Outbound travel from India is poised to grow by 45% this year, according to an online survey by TripAdvisor from January 16 to February 2, 2015. The survey was conducted by global research firm, Ipsos. TravelBiz Monitor presents highlights.

In most countries currency notes are available in denominations of 1, 2, 5, 10, 20, 50, 100 and 500.In India, the foreign currency can be purchased in the form of currency notes, traveler’s cheques and forex cards. It is also possible to make remittances to most countries from India by either purchasing foreign currency demand drafts or by doing a swift transfer.

Government also allow Remittances to India

  • Remitting from NRO (Non-Resident Ordinary) Accounts
  • Non-Resident External Rupee Account (NRE)
  • Foreign Currency Non-Resident Bank Deposits (FCNR)
  • National Pension Scheme
  • Liberalized Remittance Scheme (LRS)
  • Other Remittance Schemes

Loans non-resident Indians can take in India.

  1. Home Loan
  2. Home improvement loan
  3. Vehicle loan
  4. Points to remember

Tax Implications

Tax on investments by NRIs is taxed much like it is for Indian residents. Tax is deducted at Source (TDS) for NRIs.

TDS is deducted at a flat rate, irrespective of income. Also, tax on capital gains will be deducted at the time of maturity.

Given below is the TDS applicable for various NRI investments.

CategoryTDS Rate Applicable
Savings Deposit: NRE, NRO, FCNRNRE FCNR: no TDS; NRO: 30.9% without DTAA, Lower with DTAA
Fixed Deposit: NRE, NRO, FCNRNRE, FCNR: no TDS; NRO: 30%
Interest on other investments: dividends, shares and mutual fundsNo TDS
Capitals gains from equity sharesNo TDS on long-term gains (long term: withholding of more than 1 year); 15% on short term gains
Debt: Debt mutual funds, debenture gainsLong-term: 20% with indexation or 10% without indexation

Short term gains: included in you income and taxed

Property, Gold gains20% on long-term (gains from sale after 3 years is charged as long-term)

30% on short term gains

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