Home / Money / Calculators /  NRIs can invest in Indian markets through RBI scheme

I want to convert my resident demat account to a non-resident Indian (NRI) demat account. How much time will it take? In the interim, will I need to sell all the investments made so far in demat mode?

—Maram Rangaiah

When you become an NRI you must convert your resident demat account to non-resident demat account. You need to reach out to the designated branch of your bank and find out if they are authorized by the Reserve Bank of India (RBI) to offer Portfolio Investment Scheme to NRIs. NRIs can invest in Indian stock markets through this scheme.

Your bank’s branch will explain the process and the time period involved in this conversion. You can transfer all your holdings in your existing demat account to your NRI demat account, without having to sell them.

My daughter has become a US citizen recently. What’s the maximum amount I can send to her as maintenance in one financial year?

—Latha Rajamani

You are allowed to remit a maximum of $250,000 from India in one financial year, under RBI’s Liberalized Remittance Scheme, to your daughter as maintenance.

I have savings in a US money market fund of $2,200. I worked in the US between 1996 and 2002 and returned to India in 2002 and have been an Indian resident since. I plan to redeem and close the US fund. My calculations show that when it is converted to rupees and indexation is applied, I will make a loss. Can you help me compute gains/losses?


Since you are a resident in India for tax purposes, you must include your worldwide income in your tax return in India. Therefore, any gains/losses from sale of the holding must be reported in your tax return in India.

Money market instrument is a capital asset as per the definition under section 2(14) of the Income tax Act, 1961. Any gain from the sale of such an asset will be considered as a capital gain/loss. When these are held for 36 months or more, gains/losses shall be considered as long-term capital gains, otherwise they are treated as short-term. You are also allowed to index your cost of purchase.

To calculate your gains, you will have to use exchange rates or TTBR (Telegraphic Transfer Buying rates) on the last day of the month immediately preceding the month in which the capital asset is transferred. Say if you sold the asset in April 2018 then TTBR of 31 March 2018 will be applied for capital gain calculation. By using the exchange rates as mentioned, capital gain can be computed after giving effect of indexation. Note that to be able to claim capital loss, you must file your return by the due date.

Archit Gupta is founder and chief executive officer, ClearTax

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