Investing in India

India is the world's fifth-largest economy and fastest-growing major economy. Its equity markets have delivered strong returns, and the government offers several tax-advantaged investment schemes that make India a compelling market.

Indian Stock Market

NSE (National Stock Exchange): India's largest exchange. Trades Nifty 50 (50 largest companies). CEO of NSE: Ashishkumar Chauhan.

BSE (BSE Limited): Asia's oldest exchange. Trades Sensex (30 large companies).

Notable companies: Reliance Industries (RIL), Tata Consultancy Services (TCS), HDFC Bank, Infosys (INFY), ICICI Bank, SBI, Bharti Airtel.

Popular index ETFs: Nippon India ETF Nifty 50, SBI ETF Nifty 50, Motilal Oswal S&P 500 Index Fund (for US exposure).

Tax-Advantaged Accounts

PPF (Public Provident Fund)

15-year lock-in. Current interest rate: ~7.1% (set quarterly by the government). Tax-free (EEE — Exempt-Exempt-Exempt). Minimum ₹500/year, maximum ₹1.5 lakh/year. Can be extended in 5-year blocks.

NPS (National Pension System)

Tier I: Tax deduction up to ₹2 lakh/year under Section 80CCD(1B). 60% corpus tax-free at maturity; 40% must buy an annuity (taxable). Tier II: Voluntary, no lock-in. Can choose between Equity (E), Corporate Bonds (C), and Government Securities (G). Max equity allocation: 75%.

ELSS (Equity Linked Savings Scheme)

3-year lock-in. Tax deduction up to ₹1.5 lakh/year under Section 80C. Returns market-linked. Dividend and growth options available.

Employee Provident Fund (EPF)

12% of salary contributed by employer and employee. Interest rate ~8.15% (tax-free up to ₹2.5 lakh contributions per year). Partial withdrawal allowed for specific purposes.

Tax Rules

• LTCG (Long-Term Capital Gains): Equity investments held >12 months. LTCG over ₹1 lakh/year taxed at 10% (no indexation).
• STCG (Short-Term Capital Gains): Equity held ≤12 months. Taxed at 15% (Section 111A).
• Dividend Tax: Dividends are taxed at your marginal rate (DDT was abolished in 2020 for shareholders). TDS of 10% if dividend >₹5,000 (for resident individuals).
• Securities Transaction Tax (STT): 0.1% on delivery-based equity purchases (0.025% on sellers). 0.025% on futures, 0.05% on options premium.
• Foreign Investments: RBI's Liberalised Remittance Scheme (LRS) allows up to $250,000/year per person for foreign investments. US ETFs can be bought via LRS. 20% TCS (Tax Collected at Source) on LRS remittances over ₹7 lakh, reclaimable via ITR.

Best Brokers for Indian Investors

• Zerodha: India's largest broker. ₹20/trade (or ₹0 on delivery equity through Kite). Great platform for DIY investors.
• Groww: Commission-free on delivery equity. Popular for mutual funds (SIPs) and stocks. Good mobile app.
• Angel One: ₹0 delivery equity. Offers research and advisory services.
• ICICI Direct: Traditional full-service broker. Good for integrated banking.
• Vested: Specializes in US stock investing for Indian residents. Partners with DriveWealth.
• INDmoney: US stocks + Indian mutual funds. Good for US investment via LRS.

Key Considerations

• SIP (Systematic Investment Plan): The most common way to invest in mutual funds. Rupee cost averaging. Started by AMCs.
• Demat Account: Required for holding stocks electronically. Two depositories: NSDL and CDSL. Free annual maintenance charges (AMC) by some brokers.
• US Investing from India: Foreign remittance via LRS ($250k/year). US estate tax threshold: $60k (very low). Consider Canadian-domiciled ETFs (listed on LSE) to avoid US estate tax issues.
• NRIs (Non-Resident Indians): Can maintain NRE (repatriable) and NRO (non-repatriable) accounts. Repatriable investments in India via NRE/PIS accounts. TDS is higher on NRO accounts.