Dhanteras is the auspicious festival marking the beginning of Diwali. It holds deep cultural significance for both residents and Non-Resident Indians (NRIs) seeking to partake in traditional rituals and invest in gold, a symbol of prosperity. Whilst investing in gold is the tradition during Dhanteras, selecting the right kind of gold becomes a meaningful choice. In this blog, find out the different kinds of gold investments in Dhanteras for NRIs 2023.
Who is a Non-Residential Indian (NRI)?
According to Income Tax regulations, a citizen will be a resident of India in the previous year, if:
- He/she is in India for at least 182 days in that year, OR
- If the individual was not in India for at least 182 days in the previous year but he/she was in India for at least 365 days during the last 4 years to that year and at least 60 days during that year
Case 1: Consider you were in India for 207 days in 2019, then you are a resident of India for 2019.
Case 2: Say, you were in India for 70 days in 2019, then you fail the first criteria! But you were in India during the entire time span of 2014-2018. Then you are a resident of India in spite of not being in the country for at least 182 days in 2019.
Also Read: Diwali Gift by NRI: Sending Money Online to your Loved Ones
4 Ways to Invest in Gold this Dhanteras for NRIs
1. Traditional Gold Jewelry
For many NRIs, Dhanteras signifies the purchase of traditional gold jewelry. From intricate necklaces and bracelets to timeless earrings and bangles, investing in these pieces not only adds to one’s personal collection but also holds sentimental value, connecting to cultural roots.
2. Gold Coins and Bars
Opting for gold coins or bars is a popular choice, offering both investment value and flexibility. NRIs can consider these as they hold intrinsic value and can be easily stored or liquidated when needed, making them a sound financial choice in addition to their cultural significance.
3. Gold ETFs and Bonds
Among modern investments, Gold Exchange-Traded Funds (ETFs) and bonds offer a convenient way to invest in gold without the need for physical possession. This approach provides exposure to gold prices and liquidity, ideal for NRIs looking for a more diverse investment portfolio.
4. Gold Mutual Funds
Gold funds represent a category of mutual funds that either directly or indirectly invest in gold reserves. Typically, these investments involve gold-producing and distributing companies’ stocks, physical gold, and mining company stocks. This form of investment offers a convenient way to enter the gold market without the need to acquire the commodity in its tangible form.
These mutual funds based on gold are open-ended investments, relying on units provided by gold Exchange-Traded Funds (ETFs). As the fundamental asset is secured in the form of physical gold, its value aligns directly with the price of this precious metal.
Also read: How can NRI Invest in Mutual Funds in India?
Can NRIs invest in Sovereign Gold Bonds?
Sovereign Gold Bonds (SGBs) are financial instruments issued by the Reserve Bank of India (RBI) on behalf of the Government of India, allowing individuals to invest in gold without owning physical gold. Sovereign Gold Bond Scheme was launched in November 2015 by the Government of India under the Gold Monetization Scheme. These bonds are denominated in grams of gold and are a secure and convenient way for investors to participate in the gold market.
However, under the regulations of the Foreign Exchange Management Act (FEMA), 1999, Non-Resident Indians (NRIs) are not permitted to invest in Sovereign Gold Bonds. Though, an NRI who previously invested in SGBs before attaining NRI status can retain the bonds until their maturity or request early redemption.
Wrapping Up
Dhanteras 2023 for NRIs holds the promise of prosperity and wealth, and it’s a moment to connect with tradition while making astute financial decisions. Whether it’s in the form of cherished jewelry, tangible gold assets, or modern investment methods, the choice of gold during this auspicious time reflects both cultural heritage and prudent financial planning. May this Dhanteras bring abundance and joy to all, uniting NRIs across the globe in the spirit of the festival.
Start your India Investing Journey as an NRI with SBNRI
NRIs can now download the SBNRI App and choose to invest in different investment options in India with ease. You can also get detailed investment advice from experts at SBNRI. Also, visit our blog and YouTube channel for more details.
SBNRI is an authorized Mutual Fund Distributor platform & registered with the Association of Mutual Funds in India (AMFI). ARN No. 246671. NRIs willing to invest in mutual funds in India can download the SBNRI App to choose from 2,000+ mutual fund schemes or can connect with the SBNRI wealth team to better understand Mutual Fund investments.
FAQs
What significance does Dhanteras hold in the Diwali celebrations?
- Dhanteras marks the auspicious beginning of Diwali and is traditionally associated with purchasing gold or items symbolizing prosperity.
What are the traditional ways NRIs can participate in Dhanteras from abroad?
- NRIs can participate by buying gold virtually, through various digital platforms, or opt for gold-backed investments.
What are the benefits of buying physical gold versus digital gold for Dhanteras?
- Physical gold, such as jewelry or coins, holds sentimental value, while digital gold provides flexibility and ease of investment.
How can NRIs ensure the authenticity of their gold purchases made online?
- It’s vital to purchase from reputable and certified sellers, ensuring hallmarking and purity certificates for authenticity.
Are there tax implications when buying gold for Dhanteras as an NRI?
- Tax implications might vary based on the form of gold purchased. You can connect with our SBNRI’s in-house NRI Tax expert by clicking here.
Can NRIs sell their gold investments purchased for Dhanteras in the future?
- Yes, depending on the form of gold bought, there are platforms and schemes that allow selling or redeeming gold investments.
