Financial Planning in India: A Guide for International Investors and NRIs

India occupies a distinctive position in international financial planning. With one of the world's largest and fastest-growing economies, a sophisticated regulatory framework for non-residents, and a diaspora of tens of millions of Indian-origin individuals spread across the UK, UAE, Singapore, and North America, the financial flows between India and the rest of the world are enormous. This guide is written for two overlapping audiences: internationally mobile individuals — including British nationals and others — who hold assets in India or are considering it as a base, and Indian-origin professionals now living and working in the UK, UAE, or elsewhere who need to manage their Indian financial affairs from abroad.

Indian Tax Residency: The Basics

India taxes individuals based on their residential status, which is determined by days of physical presence across the Indian financial year (1 April to 31 March):

• Resident and Ordinarily Resident (ROR): present in India for 182 days or more in a financial year, or present for 60 days or more in the current year and 365 days or more in aggregate in the four preceding years. ROR individuals are taxed in India on worldwide income.
• Resident but Not Ordinarily Resident (RNOR): a transitional category for those who have been non-resident for nine of the preceding ten years, or present for fewer than 729 days in aggregate in the preceding seven years. RNOR individuals are taxed on India-source income and income received in India but not on foreign income not derived from a business or profession in India.
• Non-Resident: anyone below the above thresholds. NRIs are taxed in India only on income earned or received in India; worldwide income is not brought into scope.

Anti-avoidance provisions also apply: a higher-earning Indian citizen with substantial Indian income who is not tax resident anywhere else in the world can be deemed resident in India, so a "stateless" tax position is not a safe planning outcome.

Indian income tax is administered by the Central Board of Direct Taxes (CBDT) and individuals may choose annually between two regimes:

• Old regime: progressive rates from 5% to 30% with a wide range of deductions available (Section 80C, Section 80D, HRA exemption, standard deduction, and others).
• New regime (the default since FY 2023–24): lower headline rates, also topping out at 30%, but with most deductions stripped out. Designed for simplicity, and better or worse than the old regime depending on the individual's deduction profile.

On top of the basic tax sits a surcharge of 10–37% of the tax for incomes above INR 50 lakh (roughly USD 60,000), plus a 4% health and education cess. The surcharge brings the effective top marginal rate to approximately 42.74% for incomes above INR 5 crore. The more beneficial regime should be assessed each year rather than fixed once and forgotten.

NRI, PIO, and OCI Status

The status framework is central to understanding which Indian rules apply to an internationally mobile individual:

NRI (Non-Resident Indian): an Indian citizen who has been outside India for 182 days or more in the preceding financial year. NRIs have specific investment, banking, and property rights in India.

PIO (Person of Indian Origin): a foreign national who was once an Indian citizen, or whose parent or grandparent was an Indian citizen. PIO status has largely been superseded by OCI.

OCI (Overseas Citizen of India): a foreign national of Indian origin, or the spouse of an OCI or Indian citizen. OCI is a lifetime visa conferring most of the rights of an NRI, other than voting, holding public office, and purchasing agricultural land. UK nationals of Indian origin who obtain OCI status can own property, invest, and operate bank accounts in India on the same terms as NRIs, which makes OCI the most practically relevant status for UK nationals of Indian descent.

UK nationals with no Indian origin are classified as foreign nationals and face materially more restricted property and investment rights than NRIs and OCIs.

The NRI Account Framework

India operates a structured system of accounts for non-residents, designed to segregate foreign and domestic funds and regulate capital flows:

NRE Account (Non-Resident External)

• Denominated in Indian rupees but opened with foreign currency remittances.
• Interest earned is tax-free in India.
• The balance — both principal and interest — is fully repatriable (can be sent abroad without restriction).
• Joint holding is permitted only with another NRI.
• Suitable for: parking remittances from abroad, paying Indian expenses, and holding funds you may wish to bring back offshore.

NRO Account (Non-Resident Ordinary)

• Denominated in Indian rupees.
• Receives India-source income: rent from Indian property, dividends from Indian shares, pension from an Indian employer, or other locally generated income.
• Interest is taxable in India (typically at 30% for NRIs, subject to DTT relief).
• Repatriation is permitted up to USD 1 million per financial year (after payment of taxes and submission of Form 15CA/15CB with CA certification).
• Suitable for: receiving and managing India-source income, paying Indian bills, maintaining Indian financial commitments.

FCNR Account (Foreign Currency Non-Resident)

• A term deposit held in a foreign currency (USD, GBP, EUR, or others) at an Indian bank.
• Interest is tax-free in India.
• Fully repatriable.
• Useful for those who want Indian bank deposit rates without rupee conversion risk.

Choosing which account type to use — and understanding that funds cannot move freely between NRE and NRO without tax implications — is one of the first practical steps for any NRI managing Indian finances.

Most large Indian banks operate dedicated NRI divisions, including State Bank of India, HDFC Bank, ICICI Bank, Axis Bank, and Kotak Mahindra Bank. International banks including HSBC, Standard Chartered, and Barclays also maintain Indian operations, which can simplify matters where an existing offshore relationship is already in place.

FEMA: Foreign Exchange Management Act

FEMA, administered by the Reserve Bank of India, governs all foreign exchange transactions involving India. It distinguishes between capital account transactions (investment into and out of India) and current account transactions (income remittances, fees, and similar), and applies different levels of control to each. Key points for international investors:

• Capital account transactions (buying or selling assets) are regulated and require either RBI permission or fall within defined permitted categories.
• NRIs can invest in Indian equities, mutual funds, bonds, and direct property under the Portfolio Investment Scheme (PIS) and other routes, subject to sectoral caps.
• Repatriation of sale proceeds from Indian assets — including property — flows through the NRO account route, subject to the USD 1 million per year cap and applicable tax clearance requirements. Documentation evidencing the legal origin of the funds is required: Form 15CA (the remitter's declaration) and Form 15CB (a chartered accountant's certificate) for most significant outward remittances.
• Gifts and inheritances: an NRI receiving a gift or inheritance of Indian assets is generally permitted to hold or repatriate those assets under FEMA, but the rules are complex and depend on the nature of the asset and the relationship of the parties.

Violation of FEMA — even inadvertent violation — can result in significant penalties. When selling Indian assets or moving funds out of India, engaging a qualified chartered accountant in India alongside your international adviser is strongly recommended, and any structuring of Indian investments should be reviewed by an India-qualified lawyer or FEMA specialist.

Indian Property for Non-Residents

NRIs and Persons of Indian Origin (PIOs), together with OCI cardholders, are permitted to purchase residential and commercial property in India freely, without limit on the number of properties. The key restrictions are:

• Agricultural land, plantation property, and farmhouses cannot be purchased by NRIs or OCIs (they may be inherited, but not purchased) — a prohibition enforced under FEMA.
• Foreign nationals with no Indian origin may generally acquire Indian immovable property only by inheritance or by gift from a resident Indian; direct purchase usually requires RBI approval.
• Purchase funding can come from NRE/NRO account balances or by direct remittance from abroad; Indian rupee loans from Indian banks are also available to NRIs for property purchase.
• Rental income from Indian property must flow through the NRO account and is subject to Indian income tax (with TDS — tax deducted at source — typically applied by tenants at 31.2% for NRIs).
• Sale proceeds flow through the NRO account with capital gains tax applicable (long-term CGT at 12.5% for property held more than 24 months, short-term at applicable income tax rates, as of 2026).

TDS when selling to an NRI. A buyer purchasing property from an NRI seller must deduct tax at source on the sale consideration. For long-term gains (property held over 24 months) the rate is 12.5% without indexation, following the change effective 23 July 2024 which replaced the previous 20% with indexation, plus applicable surcharge and 4% cess. Short-term gains are deducted at the seller's slab rate. Because TDS is calculated on the gross sale value rather than the gain, the cash-flow consequences for an NRI seller can be severe; an application to the assessing officer under Section 197 for a lower-deduction certificate should be made in advance where the actual taxable gain is smaller than the TDS base.

India's property markets — particularly in Mumbai, Delhi NCR, Bengaluru, and Hyderabad — have seen significant price appreciation over the medium term, and the NRI segment is an important buyer group in premium residential and commercial real estate. The markets most commonly used by NRI buyers are:

• Mumbai: South Mumbai, Bandra (W), and Worli for residential; BKC (Bandra Kurla Complex) for commercial. Premium residential prices are among India's highest.
• Delhi NCR: Gurgaon, particularly the Golf Course Road and Cyber Hub corridors, along with Noida and Greater Noida. Strong rental demand from corporate occupiers.
• Bengaluru: Whitefield, Koramangala, and Sarjapur Road, driven by the technology sector, with some of the strongest rental yields among India's major cities.
• Hyderabad: HITEC City and Gachibowli, with more competitive entry prices than Mumbai or Delhi.

RERA (the Real Estate Regulation and Development Act) has materially improved buyer protection by requiring developer registration, escrow of buyer funds, and mandatory project completion timelines. Developer risk has not been eliminated, but the regulatory environment is far better than the pre-RERA position. Liquidity in Indian residential property remains lower than in comparable Western markets, and established secondary-market properties with clear title are usually preferable for NRI buyers unfamiliar with local development risk.

UK-India Double Taxation Treaty

The UK-India DTT, though in force for several decades, is considered relatively limited compared to more modern treaties. Key provisions:

• Dividends: taxed primarily in the source country, with a treaty withholding rate of up to 15%; UK residents receiving Indian dividends may face Indian withholding tax with a credit available in the UK.
• Interest and royalties: similar source-country treatment, with treaty rates of up to 15%.
• Pensions: government service pensions are generally taxable only in the source country; private pensions are generally taxable in the country of residence.
• Salaries and employment income: taxed in the country where duties are performed, with provisions for short-term assignments.

Given the limited scope of the treaty, double taxation on certain categories of income can arise, and the treaty tie-breaker provisions for residency are not always straightforward. Professional advice — from advisers familiar with both UK and Indian tax law — is essential before making cross-border financial decisions.

Mutual Funds and Equity Investments in India

NRIs can invest in Indian mutual funds, subject to certain restrictions. Most major Indian fund houses — HDFC AMC, Nippon India, ICICI Prudential, and others — accept NRI investments from the UK, UAE, and other jurisdictions, though US and Canadian residents face restrictions arising from FATCA and QI compliance complexity. UK-resident NRIs do not face this particular obstacle.

Indian equity markets have deepened substantially over the past decade. The National Stock Exchange (NSE) and the Bombay Stock Exchange (BSE) are well regulated, with good disclosure standards and robust exchange infrastructure, and India's weighting in the MSCI Emerging Markets Index has risen steadily, reflecting its growing significance for global portfolios. Long-term returns measured in local currency terms have been strong over recent decades, though with periods of significant volatility.

NRIs access listed Indian equities, mutual funds, and bonds through the Portfolio Investment Scheme (PIS) administered by a designated Indian bank, subject to FEMA limits on aggregate foreign ownership per company, which are sector-specific. Direct investment in unlisted companies falls under FEMA and the Foreign Direct Investment Policy: some sectors are open to 100% foreign investment, others require government approval or are subject to equity caps, and the policy is revised periodically.

The Liberalised Remittance Scheme (LRS) permits Indian residents (not NRIs) to remit up to USD 250,000 per year abroad for investment, education, maintenance, and other permitted purposes. For NRIs looking to move funds in the other direction — into India — there is generally no limit, though documentation and source-of-funds requirements apply.

Currency Considerations

The Indian rupee has historically depreciated gradually against sterling and other major currencies, reflecting India's inflation differential. Long-term investors in INR-denominated assets should build that trend into their return expectations: a property or fund appreciating 10% a year in rupee terms may deliver a materially lower return once converted to sterling.

The Reserve Bank of India manages the rupee within a managed float. There is no official peg, but the RBI intervenes to smooth excessive volatility. The currency is fully convertible on the current account, while capital account controls remain in place under FEMA — which is precisely why the NRE/NRO/FCNR architecture and the repatriation limits matter so much in practice.

Pension and Retirement Planning

There is no conventional social security totalisation agreement between India and the United Kingdom, so contributions in one country do not automatically count towards benefits in the other. UK nationals working in India for an Indian employer may be required to contribute to the Employees' Provident Fund (EPF), a mandatory defined contribution scheme funded by both employer and employee. EPF balances can be withdrawn on departure from India subject to conditions, or transferred to a later Indian employer.

India's National Pension System (NPS) is open to NRIs as well as residents, and offers defined contribution retirement savings across equity and fixed income fund options. NRI contributions are permitted; repatriation of NPS benefits is subject to FEMA.

The Public Provident Fund (PPF) is not available to NRIs for new accounts. An NRI who held a PPF account before becoming non-resident may generally continue to hold and contribute to it until maturity, but cannot open a new one.

For UK-based retirement planning, existing SIPP and ISA arrangements remain the primary vehicles, and QROPS transfers are not a relevant option here — India is not an established QROPS jurisdiction. UK pension rights should generally be retained and drawn in a way that is coordinated with Indian residence status rather than transferred.

Estate Planning and Indian Succession Law

India has complex succession laws that differ by religion and personal law:

• Hindu Succession Act 1956 (as amended in 2005) applies to Hindus, Sikhs, Jains, and Buddhists, and imposes certain forced heirship rights — notably for daughters in coparcenary property.
• Indian Succession Act 1925 applies to Christians, Parsis, and others.
• Muslim Personal Law applies for Muslims and is governed by Sharia principles.

A valid Indian will — drawn up in India by an India-qualified lawyer and registered with the relevant Sub-Registrar where advisable — is an important document for anyone with significant Indian assets, and should clearly designate beneficiaries. The interaction between an Indian will and a UK will requires careful drafting to avoid conflict or unintended revocation, and a foreign or international will may be recognised in India but can still collide with Indian forced heirship provisions.

Intestacy in India can be protracted and complicated, particularly where assets span multiple states. Probate is obtained through the civil courts and is slow; where there is no will, a Succession Certificate issued by a civil court is required to deal with movable assets.

One significant advantage: India does not impose estate or inheritance tax. There is no Indian equivalent of UK IHT, which is a material benefit for long-term estate planning involving Indian assets — though UK-domiciled individuals remain exposed to UK IHT on their worldwide estate, Indian assets included.

FATCA, CRS, and UK Disclosure

The reporting burden on NRIs has increased significantly. Indian bank accounts and investment holdings are reported to the account holder's country of tax residence under CRS, and FATCA applies for those with a US connection. UK-resident NRIs must disclose Indian income and assets on their UK tax returns, and must claim credit for Indian TDS correctly rather than simply omitting the income; HMRC's tolerance for undisclosed overseas assets is very low and penalties for offshore non-compliance are severe.

In practice, this means engaging a credible Indian chartered accountant for Indian tax compliance and a FEMA-specialist lawyer for investment structuring and property transactions, working alongside a UK-side adviser so that both regimes are addressed coherently rather than in isolation.

Compliance Caveats

Indian tax and FEMA regulations are subject to change, and the rules have been amended frequently in recent years. This guide reflects the general position as of 2026; tax rates, thresholds, and repatriation limits should be verified before relying on them for planning purposes. Rules applicable to NRIs, OCIs, and foreign nationals differ in material respects. This guide is for information purposes only and does not constitute personal financial or tax advice. Investments can fall as well as rise in value.

How Global Investments Can Help

Global Investments has experience working with internationally mobile clients who have Indian connections — including UK-resident Indian-origin professionals, British nationals who have worked in India, and investors with Indian property portfolios. Our services in this area include:

• Cross-border tax planning — understanding the UK-India DTT, structuring income flows efficiently, and ensuring Indian TDS credits are properly claimed in UK tax returns.
• UK pension advice for Indian-origin clients who have built up pension rights in the UK and are considering returning to India or retiring in a third country.
• NRE/NRO account guidance and coordination with Indian banking and legal professionals.
• International investment portfolios accessible from India, structured to complement (not duplicate) Indian domestic investments.
• Estate planning — working alongside Indian legal counsel on wills, succession structures, and cross-border inheritance.

Our team works alongside India-qualified professionals and can introduce you to the right specialists for the technical India-side work whilst providing the overarching wealth management perspective. Contact our team for an initial discussion about your situation.