US based NRI's - How do you guys invest in equity now?


(Girish Seshagiri) #62

Tejas, simplify!! don't get into too many things.. i would suggest please contact CA and take appropriate decision..here are few ways which i think feasible.
1) check if your Spouse or your parents account can be managed by you indirectly if they are staying in India..( GOI/RBI wants to know if repatriate amount is used to transfer to capital market or for family Maintenance purpose--)
2) Alternatively you can float a company and operate under that name having an Indian partner(might be your parents or spouse) for this transfer of money source to be shown to GOVT --it might take time but
this route is robust...trade off : you end up paying money on CA and other authoritiest.


(Tejas Chachcha) #63

Hi Girish,

1) How can I transfer money from my account to my spouse/parents' account legally, for investment purpose, without attracting any kind of taxes? It again becomes complex when going into details of it.

2) I do not plans, as of now, to stay in US longer than few years and I think floating a company would be overhead. But I really liked this idea and I would surely explore this in future.

3) I am gonna require NRE/O account in any case regardless of trading.

But the bottom point is (:slightly_smiling:) .. I love to try out things on my own as that way I am gaining a knowledge (by paying a price at times) about the whole process and how this things work. I agree going to CA is the best when it comes to financial matters but I believe that makes you little careless about your own interests by putting things in hands of CA.


(bijoy) #64

Your spouse can create an NRI demat account. Most brokerage would require her to be present in person while opening the account. A new NRI account on her name would be created in accordance with all sebi rules. Her existing NRI account can't be used. They collect all details of primary visa holder if she is on H4 visa. MF/Bonds/ETF/FX options are not allowed. When you do the tax returns filling from US, you are legally suppose to declare gains if any from this account.


(Tejas Chachcha) #65

Hi Bijoy, thanks for the inputs. I believe being present in person has been a biggest challenge for guys in USA (My wife stays with me in US).

Though I recently have some change of plans and I may visit India in August this year so I will the accounts creation process done for myself. I spoke to my ICICI Direct RM and got the heads up.


(anshumanshukla) #66

Everybody in this thread, thanks for your inputs. I have couple of more questions here:

  1. If I use an NRI/PIS account, am I not allowed to invest in all the Indian equities? I believe there is an RBI approved list for NRIs and some of the stocks are not allowed there. e.g look at https://rbi.org.in/Scripts/BS_FiiUSer.aspx - I do not see Granules India or Gruh Finance in this list, many more.

  2. If I open a savings+demat account in my mother's name, transfer my after tax income there and then invest from there - is it perfectly legal? There is no "benami transaction act" applicable here?

Thanks in advance for any help in this regard


(manjunath.kb) #67

Hello All,

I am not sure, if everyone is aware of the new Foreign Bank and Financial Accounts (FBAR), FinCEN Form 114 (formerly TD F 90-22.1), which needs to be reported by JUNE 30, 2016.

The form link is below:

http://bsaefiling.fincen.treas.gov/NoRegFBARFiler.html

Below is the requirement, who needs to file:

If you are a U.S. citizen or resident and had a financial interest in or had signature authority over one or more non-U.S. (Foreign) Bank or Financial Account or Accounts with a combined balance greater than $10,000 on any day during calendar year 2015, you must complete and file the "Report of Foreign Bank and Financial Accounts" (FBAR), FinCEN Form 114 (formerly TD F 90-22.1.

The question I have is, has anyone filed this form before? If Yes, can you throw some light on the importance of filing this form after relocating to India from the US? Thanks for your time.

Best,
Manju


(koushik) #68

The process is also summarized here in RKSV blog, tough I haven't tried it yet.

Let me know if anyone was able to successfully complete the process, If Yes, pls mention the associated banks & securities and their contacts.

Disclosure : Not related to RKSV in any way.


(mkurian) #69

I went through the thread, but would like to get some clarity on my case:

  1. I'll be moving to US shortly for a few years, this year onwards I won't be considered a tax resident in India.
  2. I have mutual fund SIPs/equity holdings all linked to my savings account in India. It has some money right now, so I wouldn't have to transfer to/from this account for a few years and they can continue to be paid.

My questions are:
- When should I convert my savings account to NRE/NRO ? Should I convert it even if I don't plan to deposit/transfer from/to US?
- Can the mutual funds SIPs continue based on the information above?
- Can I buy/sell shares from my current trading account? Again, I'm planning to use the above savings account to fund these. So what formalities apply to my case?


(Nikhil.A) #70

Should be absolutely fine.


(Girish Seshagiri) #71

please talk to you Financial adviser on this matter. as far as opening an account in mother name and transacting is limited option. RBI guidelines states any transfer(Repatriate) amount can be used for Family maintenance or any other related to Family expenditure, investing into Capital markets is barred via family members account. yes you can do Real estate transaction which is free from all this norms. word of caution : please have CPA for any kind of such transaction.


(Girish Seshagiri) #72

all your accounts to be converted to NRO/NRE account and Demat account needs conversion. please make sure to contact competent financial adviser and take correct measure. please don't go by the forum advise.


(sushildarveshi) #73

my 2 cents as i am exploring & have 2 days before I open NRE-PIS account / demat account with broker,
lowest cost for NRE - PIS account is by YES bank
(compared with HDFC / SBI / Axis / Kotak / ICICI)

PIS opening charges - nil
Transaction fees per trade (buy / sell) - Rs. 100 per trade
Maintenance fees - Rs. 500
Min Balance required - zero

Lowest Brokerage charge i guess is from Zerodha (different than NRE - PIS account charge)
Planning to open with Zerodha..let me know if anybody else is more cheaper
Transaction fee per trade - 0.1% or Rs.200 (whichever is lower)

So, overall Rs. 100 from Bank + Rs.200 from broker - Rs.300 per trade - costly affair
It was zero as an RI through Zerodha / RKSV for me atleast


(rbs1803) #74

@ sushildarveshi.
I have a NRO-PIS with HDFC & NRO trading account with Zerodha for little over 1 year now.
Extremely happy with Zerodha.
The problem is the link between HDFC & Zerodha. Sometimes the settlements take a very long time,
I am told that the delays are due to HDFC requirements on paper documents etc but I am not very sure on where is the issue.
I was told that the settlements happen much faster with Axis Bank.
Note : Pls contact Zerodha if they have a setup with Yes Bank, In the past Zerodha was setup only for HDFC & Axis bank for the NRO/E - PIS account.

Regards
Bala


(sushildarveshi) #75

Yes Zerodha has setup with Yes Bank, but I am not sure on how fast is the settlement period with either of the three tie ups of Zerodha with HDFC / Axis / Yes Bank


(sushildarveshi) #76

Also - for NRO account, funds are not repatriable to US.
Funds can be retpatriated to US through NRE account


(Shivram) #77

I have read this thread with interest. I came across this notification from RBI which suggests that PIS demat account is not required if an NRI intends to invest in a non-repatriatable basis. It is sufficient that the funds from sale proceeds of investments as an NRI are credited to an NRO account.

Notification No.FEMA.361/2016-RB - https://rbi.org.in/scripts/BS_FemaNotifications.aspx?Id=10288

Can the forum members who have gone through this process recently clarify on the following
a. Is my understanding that no PIS account (where there is no intention to repatriate) is required correct?
b. Is it required to separate the investments made before one became an NRI from those after one became and NRI? This will be required in my opinion as there are separate tds requirements for each type of such holdings. What is the procedure to make sure that the holdings before a person became a NRI to be tracked separately from the holdings / investments after she became an NRI?
c.I make my investments through ICICI direct. Has anyone experienced the process for change here that they can share with me?

Regards
Shivram.


(peepin2me) #78

The new benami act is very stringent. Assets (including financial assets like Mutual funds, debentures, equities and even FD’s) purchased in the name of parent with the consideration paid for or provided by their child will be termed as benami asset (unless the child is a joint holder in the demat account) and both you and your mother will get into trouble.


(rajsuccess) #79

@shivramrca
I am not based in the US but NRO non-pins account rules are not different (to my understanding) from NRIs in other countries.
a. You are right no PIS account is required. The Banker usually opens NRO Investment services account (or a name similar to that). Then you open demat and trading acocunt
b. It is advisable to keep track of contract notes so you are track them invts made before and after becoming NRI. FIFO method for Capital gain computation is based on “per demat account”. Paper work needs to support the declared profits.
(Slightly painful but no choice). I keep my old contract notes in sequential order in Google drive.
c. I have no idea about ICICI. I have just applied to IndusInd + sharekhan combination for NRO non-Pins account . Hopefully the accounts will get opened smoothly.


(peepin2me) #81

(26) “property” means assets of any kind, whether movable or immovable,
tangible or intangible, corporeal or incorporeal and includes any right or interest
or legal documents or instruments evidencing title to or interest in the property
and where the property is capable of conversion into some other form, then the
property in the converted form and also includes the proceeds from the property;

I’ve checked this with multiple CAs. All of them are certain that financial assets including FDs and stocks fall under the ambit of ‘property’ as defined in the "Benami Transactions Amendment Act "


(Rajul Doriwala) #82

Hi folks… i have NRO/NRE PIS setup with Kotak for five years. very smooth, very happy with them. BUT, even though Kotak charges me 0.5% brokerage, my heart bleeds paying that kind of brokerage on high value (high, for me at least) transactions.
I am trying to move to Zerodha trading account. they have tie up with Yes Bank and HDFC Bank only. Process that I am told, seem to be difficult/complex… I don’t want to move and then regret.
So, is there any US/Canada based NRI here, who has PIS Trading w/ Zerodha and Banking with any of Yes Bank or HDFC Bank? Would be great if I can understand the customer experience for selling ad buying transactions…