If I invest in stocks market in India. Which account I will use NRE Or NRO and why

Ans: Interest earned in NRO account is taxable in India, chargeable to tax under head Income from other sources and NRI can file ITR 2 to disclose said income.

Ans: Moving to Dubai while maintaining financial commitments in India requires careful planning. Here's a breakdown of considerations for managing your SIPs, EMIs, and equity holdings:

Account Choice: For rent collection, EMI payments, and SIP investments, opening an NRE (Non-Resident External) account is advisable. NRE accounts allow you to repatriate funds freely, making them suitable for managing finances while abroad. However, for domestic transactions, you can also consider an NRO (Non-Resident Ordinary) account, which has restrictions on repatriation but facilitates local transactions.
SIP Management: You'll need to transition your existing bank account linked to SIPs to an NRE/NRO account to facilitate seamless fund transfers from your overseas account. Ensure you inform your mutual fund provider about the change in bank details to avoid any disruptions in your SIPs.
EMI Payments: Similarly, you'll need to link your home loan EMI payments to your NRE/NRO account for smooth transactions. Set up standing instructions or auto-debit mandates to ensure timely EMI payments while you're abroad.
Demat Holdings: As an NRI, you can hold equity investments in India through a designated NRI demat account. You'll need to convert your existing demat account to an NRI demat account to continue managing your equity holdings seamlessly.
Tax Implications: Be mindful of tax implications both in India and Dubai. Consult with a tax advisor to understand your tax obligations in both countries and optimize your tax planning strategies.
Legal Compliance: Ensure compliance with RBI regulations and other legal requirements concerning NRI investments and remittances to avoid any regulatory issues.
Communication: Maintain open communication with your banks, mutual fund providers, and brokerages to update them about your NRI status and ensure smooth transition and management of your financial affairs.
By proactively addressing these considerations and seeking guidance from financial advisors and legal experts, you can effectively manage your financial commitments in India while pursuing opportunities abroad.

Ans: Investing for long term goals is always advantageous.
Investing through NRE account is advisable.

Ans: Tax Implications on ETFs and Swing Trading: As an NRI, any income earned from securities transactions in India, including ETFs and swing trading, is subject to taxation. Short-term capital gains (STCG) from equity investments held for less than one year are taxed at 15% plus applicable surcharge and cess. However, if you become a resident Indian again, you'll be taxed as per the resident Indian tax laws, which include LTCG tax of 10% on equity investments held for over one year. It's essential to consult with a tax advisor to understand the specific implications of swing trading on your tax liability as an NRI.

NRE FDs vs. Small Finance Banks FDs: NRE fixed deposits offer the advantage of tax-free interest income and full repatriation of funds, making them an attractive option for NRIs. However, you rightly pointed out that if your residential status changes to resident Indian within 1-2 years, the interest rate and taxation will be recalculated based on resident rates. In such cases, investing in FDs of small finance banks with higher interest rates can be a viable alternative. While the interest earned above ?40,000 is subject to a 10% TDS, it's essential to consider factors like liquidity, safety, and the bank's credit rating before investing. Evaluate the interest rate differential and potential tax implications to make an informed decision based on your financial goals and risk tolerance.

Considering your investment horizon and financial objectives, it's advisable to consult with a financial advisor or tax consultant who can provide personalized guidance based on your specific situation and help optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in