In the event that you move overseas for an unspecified period of time – ordinarily to work, to pursue a vocation, or for any other reason, you are classified as a non-residential Indian or NRI. This classification requires you to carry out certain responsibilities of which intimating your bank about your change in residential status is key. Read on to understand what this change of status means and how it affects your Demat account.
- What is an NRO Demat Account?
When NRIs indicate their new non-residential status to their banks, the banks provide them with a non-resident ordinary (or NRO) account. If you had a pre-existing Demat account in place prior to becoming an NRI, the shares and securities listed under it would now move to your new NRO account. Opening a Demat account online is easy and requires no effort.
- NRO Demat Account Features:
The NRO Demat account can be used to make sell or hold decisions pertaining to existing shares as well as buy decisions pertaining to new shares listed on the Indian stock markets that you might have your eye on.
Nonresidential Indians are entitled to invest in companies listed under almost all sectors barring those engaged in the realms of print media, chit fund, agriculture, plantation, and real estate. Additionally, trades made on development rights that are transferable are not permitted.
- Advantages of using an NRO Demat Account:
Some of the many NRO account benefits are as follows-
1. Capital gains are exempt in the event that Nonresidential Indian shareholders decide to hold their shares for more than a year.
2. Should Non-residential Indians choose to hold on to shares for a year or under, they are required to pay a capital gains tax applicable at 15.45%.
Conclusion
The NRO Demat account for non residential Indians is available as an online demat account. It allows non residential Indians to continue to invest in the Indian stock markets despite them not being physically present in the country. Prior to making any buy, hold and / or sell decisions investors and traders alike are encouraged to do due diligence. This preliminary research can prove to be rewarding in the future and can reduce the potential of incurring risks and / or losses. The Coronavirus pandemic has made the market more unpredictable owing to the unpredictable nature of the virus itself in that its strains have increased in number and controlling the outbreak is proving to be a most trying experience. Nonresidential Indians are encouraged to stay abreast of news pertaining to India when making investment and trade decisions while using their sanctioned NRO Demat account.
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