OnlineTradingInvesting.com was created mainly for helping beginner traders, advanced traders & investors of all levels and to teach them how to invest in the market and how to trade in the market, effectively and efficiently. It consists of all the very basics you need to know before getting involved in the financial markets. You will learn about the market in general, stock exchanges, stocks, the stock market in general, bonds, mutual funds, options, futures, currency trading – FOREX and many other things. The basic information is free and is included in the articles. We have also provided material where you can further your education and perfect your investment and trading skills. We have created this site so that new investors/traders do not go into the market uneducated and end up losing all of their money.
Are you looking to apply for a PAN card in India for any reason: opening a bank account, investing, filing taxes, etc? It can become a difficult process if you are an Indian living abroad. If you want to apply for an OCI card or a PIO card, and you live in the United States, there are ways of getting it done in the US without coming to India. They have offices there. In the case of a PAN card, that is not the case. There are no PAN card offices in the US.
There are now some online brokers to help you obtain your PAN card from abroad. If you use a broker, you will not need to come to India. The only downfall with an online broker would be that you may have to send your documents and forms to India in the mail as all of the brokers have their offices in India. Over the years, the process with an online broker has become easier and easier. You can now pay with credit or debit card online in order to begin your process. If you go straight through the government, you are required to provide an Indian Rupee check. This has become more difficult for those living outside of India.
After you have made the payment and started your process, the broker will help you step by step complete your application and provide the necessary documents. They are available via email and phone if you have any questions. When you are finished and you have mailed your completed application and documents to them, they will check them and make sure they are ready to be submitted.
The broker will then take your application to the PAN department and have them submitted on your behalf. They will discuss any issues with the PAN Officer and make any corrections that are needed and re-submit until the job is finished. If you decide to come to India and obtain your PAN card straight through the government office, you will need to have everything perfect because the office is generally very strict and will send you away with any mistake.
If you are ready to start your PAN process and you don’t know where to start or which broker to use as an NRI, you can simply search on “google.com” and find an abundance of them to choose from. From my experience, I would personally recommend: http://www.nriinvestindia.com/nri-apply-pan-card-online.html
If you are looking to make a profit, timing is everything when it comes to finance. You need to be sure that you are doing it on the correct date. Keep an eye on your calendar for the best dates. When you buy a property with the intention of selling it later on, you also need to time it right so that you can get the most profits out of it.
The best time to sell your property is when it is getting you at least 60% in profits. When selling you always need to keep taxes in mind as well. You will always be asked to pay taxes on the profits that you make. There are also some taxes from the loans you take as well.
When you buy a house, it is advised that you keep it for more than three years. If you sell it before then, you will not have the same tax deductions and would end up paying more in taxes. If you wait, you can also mention all of the taxes on your tax return.
NRI Capital gain and indexation
When you sell your property, the profit that you make off of it is known as capital gains. This is because real estate is considered an asset. If you sell your property before 3 years, it is a short-term capital gain. Therefore there are different tax rules. There are many more tax exemptions for long-term capital gains. With long-term capital gains, the seller is able to inflate the value of their assets through indexation. An assets value will deteriorate over time, so you should increase the initial cost of the house. Keep track of your cost inflation index also known as: CII. The indexation of purchase price helps to lower the net capital gain. This in return, lowers the taxes for you as a seller.
Reducing your taxes
In order to take advantage of most long-term capital gain tax exemptions, you must buy a house or build another house within three years of selling the one that you have. For this, you can utilize Section 54. You can also use section 54 for any other long-term capital gain generated from other assets besides property and real estate. The proceeds from selling a property should only be invested again in a residence, not into any commercial real estate. You also should not own more than one house at a time in order to benefit from the tax exemptions. You can invest in up to Rs.50 lakhs in every financial year in India. Tax laws are also different depending on if you are a resident in India. You will need to look up all of the tax laws carefully if you are an NRI.
What if you miss the tax due date?
If you are unable to get the exemption before the due date for your tax return, you will need to open a different account to keep all of your capital gains. You must do this before the last due date for filing a tax return. You can only do this with a Savings Deposit account or a Term Deposit account. The interest rates for these are usually the same as a regular bank savings account. When you fill up your tax return, you must attach proof of the deposits and send it along with the tax return forms. Doing this will help you receive the exemption.
Do I get a PAN number if I want to save taxes on the profits I made by selling my real estate?
Everyone who decides to invest in India, even NRIs (Non-Resident Indians) have to have a PAN card because once they sell that investment they have to pay taxes on that capital gains. And to pay taxes you need to have a PAN card. This would be the first step.
If you are an NRI, please contact:
NRI’s (including PIO’s and OCI’s) have always wanted to invest in Indian mutual funds, but mostly are unable to do so due to
1. Lack of knowledge of rules and regulations,
2. Hassled by the paperwork and red tapeism involved,
3. Wrong information provided and;
4. Lack of options
Mostly, NRI’s are not aware of rules and regulations on investment front in India and when they try to gather information online or through their relatives or friends, they mostly get either wrong information or incomplete information. There are very less organizations that cater to this niche market as it involves lot of patience and determination due to the time difference between the countries. One of the wrong information is that, “NRI’s PIO’s OCI’s are not allowed to invest in Indian Mutual funds”. Specially lot of NRI’s in the US and Canada mostly understand that they are not allowed to invest in Indian mutual funds.
The fact is completely opposite. Now even foreign nationals, without any Indian background from selected countries (except Bangladesh, Pakistan, Nepal and certain other countries that might be barred by the Reserve bank of India from time to time and countries that are not members of the Financial Action Task Force) including the US and Canada are allowed to invest in Indian mutual funds.
All they need to invest online is an account with a service provider that provides online investment in Indian mutual funds. One such provider is www.NriCapital.com.
Traditionally whenever an NRI wanted to invest in Indian Mutual funds he/she would have to send the application form, along with a copy of his pan card, an identity proof, a cheque for the investment and send it to his advisor in India who then would get the application processed. The process was time consuming, involved lot of paperwork and hassles of sending different applications, different cheque and set of papers if one wanted to invest in multiple Mutual funds at the same time.
Things now stand changed. Sites such as www.NriCapital.com allows NRI’s, PIO’s and OCI’s to open online investment account with them after which the can invest in Mutual funds online itself without having to fill any papers or having the headache to send couriers and keep a track of it. Some other banks also provide this facility like ICICI Bank but they charge a transaction fees, HDFC BANK, CITIBANK but the major loophole is that you need to have your NRE/NRO account with these banks only.
Find the one that offers you the maximum number of mutual funds companies, payment facility by maximum number of banks and does not charge or charges the least amount. Our recommendation would be www.NriCapital.com.
Investing in today’s modern era of globalization is often difficult due in part to the many undisclosed interdependencies that have developed over the past few decades. As much as we would like to believe that our local economies are independent efforts, the new reality is that we are interconnected more than ever with what happens outside of our national borders. One constant in this ever-changing milieu, however, is the impact of central bankers on the money supply, especially when monetary policy involves interest rate modifications.
The “fundamentals” do move the forex market, and one of the most important considerations is the role of interest rates. One of the first lessons in any forex tutorial instructs the student to watch interest rates like a hawk, for both countries in your currency pair of choice. This guidance sounds simple enough, but in practice it becomes difficult because central banks have many ways, both public and private, to modify the interest rate environment in their respective markets.
Central banks can change the prevailing discount rate with a public announcement, or they can maneuver behind the scenes buying and selling treasury securities, sometimes referred to as “open market activities” or “intervention”. They may even issue new securities, thereby expanding the money supply, diluting the purchasing power of the currency, and forever changing the supply/demand demographics going forward.
The Indian Rupee has declined by 20% versus the U.S. Dollar over the past year for several reasons, but the correlation with declining interest rates in 10-Year U.S. Treasury securities is unmistakable, as depicted in the following chart:
Developing economies in today’s world face many challenges, but one issue that can be very destructive on a local economy is how quickly investment capital flows can suddenly shift from being positive inflows that are supportive to negative outflows that have the opposite effect. The “carry trade” is part of the problem. Positive growth and profitable returns will attract global capital like a magnet. Banks and companies tend to borrow in Yen or Dollars, where interest rates are low, and then invest in countries like India where opposite conditions prevail. If the Yen or Dollar suddenly appreciates, generally during a financial crisis, traders must suddenly “unwind” these carry trades or risk losses if their positions were un-hedged.
Occasionally, the actions in rates can be counter-intuitive, requiring further analysis to determine the causes at hand. The debt crisis in Europe and the declining nature of the global economy in response to it have combined to create a level of uncertainty in the minds of the global investment community, like none other in recent memory. Each day is an “either-or” proposition – either “Risk on” or “Risk off” in today’s vernacular. The aversion to risk is ongoing, a detriment to economic growth in general, but a common expectation that causes capital flight to “safe havens” in an instant.
In the above chart, interest rates on long-term U.S. securities have dropped 45% from 3.00% down to 1.65% in just twelve months. The rush in capital flows to safety has created increased demand on the Dollar, forcing an appreciation in the greenback and the reverse in nearly all currency-pair combinations, the Rupee included. The capital inflows necessary to support these changes have come primarily from developing economies around the world. As a result, the Rupee declined 20% in response. Free trading charts at forexcharts.net reflect this general strengthening of the Dollar.
There are most definitely many other factors at play here, but pay close attention to changes in the interest rate arena if you want more consistent forex trading results.
The Foreign Exchange Management Act (FEMA), 1999 is a set of guidelines governing financial transactions of non-resident Indians. A non-resident Indian (NRI) can open and operate a bank account in India. This does not require the permission of the Reserve Bank of India (RBI).
The NRI should use the services of a bank authorized to handle foreign exchange transactions by the RBI. Such types of accounts are called NRO accounts, and even the post offices in India have the facility to accommodate such account-types.
Get free information on India FD rates & different kinds of NRI accounts below: www.nriinvestindia.com/banking.html
Different NRI accounts and their benefits:
Demat Account for NRIs
In the developed countries, the system of deposits and associated services are well-defined. This has helped streamline online share trading. It has also given a rise to foreign direct investment. The National Securities Depositories Limited (NSDL) is a national body in India that wants to achieve in this in India. The NSDL, being controlled by the Securities and Exchange Board of India (SEBI, helps investors overcome the burden of investing in India by offering well-evolved depository services.
NRE and NRO Accounts
NRI’s can have two account-types – NRE and NRO accounts. They are expanded as Non-Resident External and Ordinary Non-Resident Rupee accounts. To credit money to an NRI, you deposit funds in their NRO accounts. NRI’s use the NRO accounts to make investments in India.
NRI Bank account-types
The following are some widely used banks accounts by NRIs. They are:
- NRE savings/FD account
- NRO savings/FD account
- FCNR FD account
Understanding the NRE savings/FD account
This type of bank account can be used by non-resident Indians. You can manage your foreign currency through this bank account. All your earnings in the foreign country can be deposited in this account. This is an easy way to bring your money into India.
You open a NRE account as a Savings and Fixed deposit account in any of the banks. You are not levied any sort of tax. NRE accounts are exempted from wealth tax. You maintain the value of your earnings in the national currency, which is the Indian Rupee.
You can even open a joint account. You can also nominate somebody as this facility is available with NRE accounts.
Demerits of NRE accounts
The banks buy your foreign currency earnings at Indian rates. When you withdraw foreign currency, you get valuation in the selling rate of the bank. You may have to bear a conversion loss, because you have no option than to buy at the selling rate of the bank.
Since exchange rates are volatile, your earnings in the NRE account are exposed to such fluctuations of the exchange rate.
NRO Fixed Savings and Deposit Account
The interest rate you earn in this account is levied 30% tax. There is also surcharge and education cess levied. Your savings and fixed deposit accounts are charged such.
You maintain this account for crediting legitimate earnings. Banks are given the option to determine the interest rates offered to you.
For term Deposits, banks decide the interest rates offered on NRO deposits, which cannot be higher than those offered by them on comparable domestic rupee deposits.
FCNR (Foreign Currency Non-Resident) Fixed Deposit Account
You earn Indian rates on your deposits in this account. You get overdraft and nomination facility. Your deposits are exempt from tax. Only certain types of currencies are allowed in this account. You need to check with your bank on this.
Rates offered by banks
As per the RBI, banks can decide on the rates offered to NRI account-types. This is actually a beneficial thing considering that some banks may offer a higher deposit rate, and you can think of opening an account with this bank.
SIP investing is a simplified monthly amount that is debited to your account automatically for investment in equity and debt instruments by a mutual fund. If you are not experienced enough and confident to play in the stock market on your own, the SIP is an excellent way to let mutual funds manage your money in the stock market. It is a regular and equal payment into a mutual fund, trading or retirement account for reinvesting into a wide array of stocks for getting optimum returns.
FREE information on SIP investing: Know more >>
Long term returns
It is a regular and equal payment into a mutual fund, trading or retirement account for reinvesting into a wide array of stocks for getting optimum return. You can benefit from a long term investment advantage as it is common for many stock traders to book their profits very early or too late to make good profits.
Stock market experts have always said that you can only make money by staying invested for the long term. You can also gain from the dollar-cost averaging as well as avail of the opportunity to save regularly by making the first SIP payment.
You can buy shares at different prices over a long period of time, but gain from the dollar-cost averaging that in the end reduces the price of each share. The average cost per share of the security will automatically go down in future.
As an investor you can plough back money from dividends earned into more stock which is known as the dividend reinvestment plan. With the SIP method of investment, you are assured about your money being debited each month at a specific date.
The scheme allows investors to buy units each month on a predetermined date. But your best bet would always be to start an SIP when the stock market index has hit a low. You can expect to reap rich profits over time as the value of your investment will go up.
The mutual find will also spread your money over many sectors which will enable your money to grow. All sectors do not perform simultaneously and a loss from one can be offset with profits from the others.
Experts handle your investment spreading over many portfolios
Over time, your money will experience the highs and lows of the stock market that will also ensure a reasonable return. If the market remains volatile for some time, you may lose in the stock market by investing on your own. The greatest benefit of SIP is that your money is spread over a longer period of time to weather any periodic volatility that can wipe away your money.
With the money going into mutual funds, it would be handled professionally.
They have their own investment techniques and know exactly which sector to tap and when. All asset management companies charge very little entry loads and the entire process is cost effective as well.
Your savings habit also becomes far more disciplined as the money is invested through automated debit system of your account. But the major reason of opting for an SIP is that you get all the benefits of stock market investing without having any knowledge of stock price movements.
The SIP investment works out like this. You may invest a certain amount of money on a fixed number of units. If you can buy the units when the value is low owing to the stock market upswings and downswings, you can easily get the unit cost worked out much lower. It will help you get more profit when the market picks up and the unit price shoots up.
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