What Are NCDs (Non-Convertible Debentures): Eligibility, Benefits & Taxation

Yes, income earned from NCDs is taxable in India for NRIs. Tax applies to both interest income and capital gains arising from the sale of NCDs. Generally, tax deducted at source (TDS) on interest is levied at 20%, and long-term capital gains are taxed at 20% without indexation benefits, subject to applicable tax laws.

The best investment scheme for an NRI depends on individual financial goals, risk appetite, and investment horizon. Popular options include NRE and NRO fixed deposits, Public Provident Fund (PPF), equity-oriented and debt mutual funds, direct equity investments through PIS, and real estate for long-term asset creation.

Yes, NRIs are permitted to invest in Indian mutual funds in compliance with FEMA regulations. Investments must be funded through NRE or NRO accounts, and completion of KYC is mandatory. NRIs can invest in various fund categories, including equity, debt, and ELSS mutual funds.

Yes, NRIs can invest in market-linked debentures and other securities, such as debentures and shares, through the Portfolio Investment Scheme (PIS). Investments must be routed via designated NRE or NRO bank accounts and executed through registered brokers on recognized Indian stock exchanges.

Yes, NRIs can invest in the Indian bond market through approved routes such as the Fully Accessible Route (FAR) for government securities, non-convertible debentures (NCDs), public sector undertaking (PSU) bonds, and other eligible fixed-income instruments. These investments can be accessed via authorized brokers or platforms like RBI Retail Direct, offering relatively stable returns.