Gold investments are one of the most traditional ways of investing and saving. It serves as an asset for people and acts as a hedge against inflation. It is an excellent method for securing people’s hard-earned money. But buying gold gives people stress about its safety. Therefore, the Government has launched an easy way to invest in gold by eliminating the risk of storage and safety.
What is Sovereign Gold Bond (SGB)?
Sovereign Gold Bonds are government securities denominated in grams of gold. The Reserve Bank of India issues these bonds on behalf of the Government of India. They are the best alternatives for holding physical gold. Sovereign Gold Bond Scheme was launched in November 2015 by GOI under the Gold Monetization Scheme.
Who is a Non-Resident Indian (NRI)?
As per the Income Tax Act:
Non-Resident Indian is a person who is not a resident of India.
An individual is deemed to be a resident, if
(A) Individual has resided in India in that year for 182 days or more or
(B) Having within the 4 years preceding that year been in India for 365 days or more and is in India for 60 days or more in that year.
Exceptions to residential status are
• Individual who is a citizen of India and who leaves India in any financial year for the purpose of employment outside India
• Individual who is a citizen of India or is a person of Indian origin (PIO) and who is outside India comes on a visit to India in any financial year.
(“B” condition stated above shall not be applicable and individual status will be determined only by “A” condition in both the above cases. )
NRIs and SGBs
A Non-Resident Indian cannot invest in Sovereign Gold Bonds as per the Foreign Exchange Management Act (FEMA), 1999. However, an NRI who has already invested in SGB before achieving his NRI status can hold the bond until its maturity or demand premature redemption.
An NRI who is not allowed to invest in SGBs is provided several other alternatives to invest in gold by the Government of India.
GOLD INVESTMENTS FOR NRIs
Physical Gold- NRIs can invest in gold through one of the most cultural methods: buying gold in its physical form. It is the best option for traditional India. An NRI can buy gold from a jeweller and take future actions according to his decisions. However, buying gold in physical form has certain disadvantages like storage problems, risk and immense making charges during its purchase.
Gold ETFs: Gold Exchange Traded Funds (Gold ETFs) are an option through which NRIs can invest in gold. It is listed on the Indian Stock Exchanges. For this, NRIs need to have a Demat and Trading account. It can be bought and sold in multiple grams of gold, where one Gold ETF unit equals one gram of gold.
Gold Mutual Funds: A scheme through which NRIs can invest in Gold ETF units controlled by Asset Management Companies (AMCs). NRIs can invest in gold mutual funds either through their Demat and trading accounts or directly through AMCs.
E-Gold: Here comes another better option for investing a smaller amount. NRIs can invest in Electronic Gold in the same way as a Resident of India does. For this, NRIs need to have a Demat and Trading account. It is purchased ad traded on stock exchanges in the same way as equity shares.
Final Words
The Indian Economy has seen a high inflation rate in the past years. People always try to find out one or the other way to safeguard their income and savings. Gold investment is a choice for all. Investing in gold is a hedge against inflation which means it offers returns higher than the inflation returns.
Experts always advise that one’s portfolio investment should have a good percentage of gold investment. The rising rate of gold attracts people from outside India to invest in it. NRIs are provided various choices to invest in Indian Gold, either through a cultural method like holding gold physically or through modern methods such as E-Gold, Gold Mutual Funds etc. NRIs cannot invest in gold through the SGB scheme once he achieves their NRI status. But. If an NRI had invested in SGB before he got his status as NRI, then he can hold the bond till the date of its maturity.
It is highly beneficial for NRIs to invest in gold as it gives a good value for their money. However, NRIs need to check the tax implications of gold investment before investing in it.
Frequently Asked Questions
Is there any way NRI can invest in Gold in India?
Yes, there are various other ways than the SGB scheme which help NRI to invest in gold in India. NRI can invest in gold by purchasing gold or opting for E-gold, Gold ETFs and Gold mutual funds.
What tax structure is applicable for NRI gold investment?
NRIs must check the tax implications before investing in gold in India. For example, if the NRI sells the physical gold within three years of purchase, then the short-term capital gain tax would be applicable, and if it is sold after three years of its purchase, then it would be subject to long-term capital gain taxes. If NRI purchases and sells Gold ETFs directly through stock exchanges, no TDS would be deducted, but if Gold ETFs are traded through mutual fund houses, TDS would be applicable.
Is there any minimum and maximum limit for the investment in SGBs?
A minimum of 1 gram and a maximum of 4 kg for individuals & HUF and a maximum of 20 kg for trusts and similar entities are allowed for investment.
FAQs
NRIs can invest in gold mutual funds either through their Demat and trading accounts or directly through AMCs. E-Gold: Here comes another better option for investing a smaller amount. NRIs can invest in Electronic Gold in the same way as a Resident of India does. For this, NRIs need to have a Demat and Trading account.
Is it safe to invest in Wint Wealth? ›
Even if one bond defaults, others are safe. Wint Wealth curates the bonds in Wint basket with criteria checks such as senior secured bonds, rated NBFCs, exchange listed bonds. Filters are also used (such as leverage lower than 4 times, reasonable balance sheet size of ₹1,000 crore-₹5,000 crore).
What are the best investment options for NRI in India? ›
NRIs can invest in Mutual Funds, National Pension Scheme, Bonds and NCDs, Fixed Deposits, Public Provident Fund, Equity, Real estate, and more.
Is investing in India a good idea for NRI? ›
Non-resident Indians (NRIs) often seek investment opportunities in India to secure financial stability for themselves and their families. The Indian market, known for its diverse investment options such as equities, mutual funds, fixed deposits, and debt funds, offers a promising avenue for wealth creation.
How much NRI can carry gold to India? ›
Yes. NRIs can bring into India gold upto 10,000 grams as part of their baggage once in six months provided they have stayed abroad for a continuous period of six months. In what form can the gold be brought into India?
How much gold allowed from usa to India without tax? ›
Duty-Free Limits
If you're a male passenger, you can bring up to 20 grams of gold jewelry into India duty-free, valued at a maximum of Rs. 50,000. Female passengers have a higher allowance of 40 grams, up to Rs. 100,000.
Can I withdraw money from Wint Wealth? ›
You can withdraw the total amount if it is less than or equal to Rs. 5 lakhs. You can extend the withdrawal till you reach 70. You must use 40% of the amount in annuity plans and take the rest as a lump sum.
Who owns Wint Wealth? ›
Last year, Wint Wealth also received the online bond platform provider licence from the Securities and Exchange Board of India (SEBI). Wint Wealth was founded by Abhik Patel, Ajinkya Kulkarni, Anshul Gupta and Shashank Chimaladari in 2020.
What is the difference between Wint Wealth and Goldenpi? ›
Wint Wealth doesn't charge investors directly; instead, it levies a 1% to 1.5% fee on the interest paid by the issuing companies for transactions conducted on their platform. Golden Pi, on the other hand, adopts a per-order fee structure, charging a flat ₹20 or 0.03% (whichever is lower) per executed transaction.
Which Indian bank has best NRI account? ›
Best NRE Accounts in India For NRIs
- Kotak Mahindra Bank.
- ICICI Bank.
- SBI Bank.
- HDFC Bank.
- Axis Bank.
Foreign Currency Non-Resident Bank (FCNR(B)) deposits are a popular choice among NRIs. These deposits are held in foreign currencies, thereby mitigating the risk connected with currency fluctuation. They offer complete repatriability of funds and exemption from Indian income tax.
What is the safest investment with highest return in India? ›
10 Safest Investment Options in India
- Fixed Deposit (FD) ...
- Life Insurance. ...
- Public Provident Fund (PPF) ...
- National Pension Scheme (NPS) ...
- Gold. ...
- Savings Bonds. ...
- Recurring Deposits. ...
- National Savings Certificate.
Disadvantages of being an NRI
The rate of taxes on income is much higher than India in most first world countries. NRIs do not receive any benefits offered by the Indian government to the regular residents of India.
What can NRI not do in India? ›
Intraday trading in equity is not allowed. Buy Today Sell Tomorrow (BTST) is not available. Sovereign Gold Bonds (SGBs) cannot be bought. However, existing units can be sold or held until maturity.
Which SIP is best for NRI? ›
Top NRI Plans 2024
- Click2Invest. Past 5 Yrs Returns. 29.24% Lump sum Payout. ₹11.8 Cr. Know More.
- Fortune Pro. Past 5 Yrs Returns. Lump sum Payout. ₹10.8 Cr. Know More.
- Online Savings Plan. Past 5 Yrs Returns. 28.02% Lump sum Payout. ₹10.6 Cr. Know More.
- Goal Assure II. Past 5 Yrs Returns. 28.02% Lump sum Payout. ₹10.2 Cr. Know More.
However, they should be aware of the Foreign Exchange Management Act (FEMA) guidelines. For instance, while NRIs can bring gold into India, there are certain duty charges applicable if the gold exceeds the permissible limit. - For Physical Gold: NRIs can purchase from reputed jewelers.
Can I buy gold in USA and bring to India? ›
Each passenger can carry up to 1 kg (kilogram) of gold jewelry upon payment of customs duty, provided the passenger has stayed abroad for atleast a year or more. Also, Indian customs will not allow more than 1 kg of gold jewelry even if the passenger is willing to pay the customs duty for it.
Can you buy gold in India and sell in USA? ›
c) India: If you were to purchase gold jewelry in India and bring it to USA remember that you'll be subject to US customs duty of 5.5% on gold jewelry. This would make the cost of gold jewelry purchased by you almost 25% higher (18% duty in India + 5.5% duty in USA).
How much gold can an Indian citizen buy in India? ›
According to the Central Board of Direct Taxes (CBDT), the limits for holding gold jewelry and ornaments without showing any proof are: Married woman: Up to 500 grams of gold. Unmarried woman: 250 grams of gold. Men: Only 100 grams of gold.
