Indian Government Schemes for NRI

Who are Considered as NRIs?

A Non-Resident Indian (NRI) is an Indian citizen who lives outside India for business, education, employment, or other reasons, staying in India for fewer days than the specified limit. This means spending less than 182¹ days in India during a financial year, or less than 120¹ days in a year if the total income, except income from foreign sources, exceed ₹15 lakhs, and a total of fewer than 365¹ days over the past four years. The classification is determined under the Income Tax Act and FEMA guidelines. Your NRI status decides which government schemes for NRI in India you are eligible for and how your income will be taxed.

Features of NRI Status:

1. Must reside outside India for at least 183 days in a financial year or a combination of more than 60 days in a year and a total of less than 365 days during the last four years¹.
2. Retains Indian citizenship and holds a valid Indian passport.
3. Eligible for special government schemes for NRI in India.
4. Taxed in India only on income earned within the country.
5. Allowed to open NRE, NRO, and FCNR bank accounts for fund transfers and savings.

 

Government Investment Schemes for NRI

The Government of India offers multiple safe and regulated avenues for NRIs to invest. These NRI investment plans include fixed deposits, pension schemes, mutual funds, and government-backed securities. Each option balances security, returns, and compliance.

Here is a list of some of them:

 

Fixed Deposits for NRIs

Fixed deposits offered by banks allow you to deposit your money in an Indian bank under special accounts like NRE, NRO, and FCNR. This deposit amount is locked in for a period of time and provides an assured return at the end of the tenure.

Features²:

1. You can only invest in a fixed deposit through a specialised bank account for NRI account holders.
2. Fixed deposit offers you fixed interest rates at the end of the tenure.
3. Fixed deposit offers flexible tenures.
4. You may be charged a penalty for early withdrawals.
5. Funds can be fully repatriable in NRE and FCNR accounts.

 

National Pension Scheme (NPS) for NRIs

The National Pension Scheme (NPS) is a government-backed retirement plan that you can invest in as an NRI in order to build a steady retirement corpus. It allows you to invest in different types of assets classes under one plan.

Features³:

1. You are eligible to invest if you are an NRI between the ages of 18 and 60 years.
2. The minimum account opening contribution is ₹500.
3. The minimum amount per contribution is ₹500.
4. The minimum contribution per year is ₹6000.
5. You can either choose your investment assets and their proportions, or the default option can automatically set a combination based on your age.
6. Tax deductions are available under Sections 80CCE and 80CCD(1B) of the Income Tax Act⁷.

 

Mutual Funds for NRIs

You can also invest in mutual funds in India as an NRI. It provides you with exposure to the equity and debt markets. These investments are regulated by SEBI, which ensures transparency and security.

Features:

1. You can only invest in a fixed deposit through NRE or NRO bank accounts
2. You can use the SIP option to transfer your funds directly to the fund house on a fixed date.
3. Your redemption proceeds can be repatriated, subject to RBI regulations.
4. Tax implications on your mutual fund investments depend on the type of fund you have invested in and the holding period.

 

Government Bonds and Securities

Government-issued bonds or debt instruments are investment options backed by the Government of India,. These instruments provide investors with predictable returns over a period of time.”

Features:

1. You can invest in government securities (G-Secs) and Treasury Bills.
2. These products offer fixed returns over a defined tenure.
3. These products are useful for conservative investors seeking safety.
4. The interest earned from government-backed securities is taxable in India under applicable laws.

 

NRI Tax Rates for Investments in India

Taxation plays an important role in determining your real returns from NRI investment plans. As an NRI, only the amount that you earn in India is taxable under the Income Tax Act. This includes interest from deposits, capital gains on investments, and rental income.

The table below highlights key tax rates of the above-discussed Indian government schemes for NRIs:

 

Benefits of Investing in India for NRIs

Investing in India provides NRIs with a mix of stability, growth, and long-term wealth creation. By leveraging Indian government schemes for NRI, you gain access to regulated instruments that are backed by strong policies. You can diversify your portfolio by investing in Indian Rupee while you earn in foreign currency. Moreover, these products are structured to provide tax compliance while allowing you opportunities for wealth repatriation.

If you want to balance global exposure with Indian financial opportunities, these schemes offer the right pathway. In addition, many investments come with tax-saving benefits, reducing your overall liability.

 

Key Takeaway

1. NRIs can invest in fixed deposits, NPS, mutual funds, and government bonds.
2. Each scheme balances growth, stability, and tax efficiency.
3. NRI taxation applies only to income earned in India.
4. Choosing the right mix depends on your goals, risk appetite, and tenure.

 

Conclusion

The Indian government has created a wide range of investment options to help NRIs grow their wealth safely and effectively. From deposits to mutual funds and pension funds, these schemes offer security, transparency, and tax benefits. Understanding eligibility, taxation, and compliance ensures you get the maximum value from these opportunities.

Whether you seek long-term growth, retirement planning, or safe returns, Indian government schemes for NRIs have solutions for every investor profile. By selecting the right mix of NRI investment plans, you can stay connected to India’s financial growth while securing your global future.

 

FAQs

 

1. Can NRIs invest in Indian government savings schemes like PPF or NSC?

No, NRIs are not permitted to open new PPF or NSC accounts. However, existing accounts opened before NRI status can be continued until maturity.

 

2. Are NRIs eligible to open Sukanya Samriddhi Yojana accounts in India?

No, NRIs cannot open new Sukanya Samriddhi Yojana accounts. These accounts are restricted to Indian residents only for the benefit of girl children.

 

3. Can NRIs benefit from the Pradhan Mantri Jeevan Jyoti Bima Yojana (PMJJBY)?

Yes, NRIs with eligible Indian bank accounts can enroll in PMJJBY, subject to scheme terms. However, any claim payout will be made only in Indian currency to the nominee or beneficiary⁸.

 

4. How can NRIs apply for Indian government schemes while living abroad?

NRIs can apply through authorised banks, NRE/NRO accounts, or online portals. Most applications require KYC documents, proof of NRI status, overseas address verification and other necessary documents.

 

Source:

1. https://incometaxindia.gov.in/Documents/residential-status.htm
2. https://www.icicibank.com/nri-banking/nriedge/nri-articles/understanding-nri-fixed-deposits-in-india
3. https://www.mea.gov.in/images/pdf/nps-for-nri.pdf
4. https://getultra.club/blog/tds-on-nri-fd-interest
5. https://economictimes.indiatimes.com/wealth/tax/nri-taxation-mutual-funds-capital-gain-tds-rules-stcg-ltcg-tax-rules-from-equity-debt-international-hybrid-mfs-and-others/articleshow/122972758.cms?from=mdr
6. https://getbelong.com/blog/invest-bonds/
7. https://cleartax.in/s/nps-national-pension-scheme
8. https://jansuraksha.gov.in/Files/PMJJBY/ENGLISH/FAQ.pdf