What is Portfolio Investment Scheme (PINS)?
Portfolio Investment Scheme (PINS) allows Non Resident Indians (NRIs) or Persons of Indian Origin (PIO) to invest in shares or convertible debentures (sale or purchase) of an Indian company in the secondary market on repatriation or non-repatriation basis through registered stock broker on a recognized stock exchange, subject to terms and conditions as specified in FEMA.
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Does an NRI/PIO require PINS account to purchase shares in primary market (IPOs) on repatriable basis?
No, PINS account is mandatory only once the transactions are routed through secondary market. In case of purchase of shares in primary market on repatriation basis, the application money can be paid through NRE accounts or inward remittance through normal banking channel.
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Does an NRI/PIO require PINS account to purchase shares in primary market (IPOs) on non- repatriable basis?
No, PINS account is mandatory only once the transactions are routed through secondary market. In case of purchase of shares in primary market on non-repatriation basis, the application money can be paid through NRE/NRO accounts or inward remittance through normal banking channel.
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Does an NRI require PINS account to sell shares, purchased in primary market (IPOs) on repatriable/non-repatriable basis?
No, NRIs don’t require PINS account to sell shares, purchased in primary market (IPOs) on repatriable/non-repatriable basis.
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Does an NRI require PINS account to sell shares which were allotted as rights/bonus on the shares originally purchased from primary market (IPOS) on repatriable/non-repatriable basis?
No, NRIs don’t require PINS account to sell shares, which were allotted as rights/bonus on the shares originally purchased from primary market (IPOS) on repatriable/non-repatriable basis.
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What will happen to the shares purchased in primary market/secondary market as a resident Indian, once the customer turns Non-Resident?
The shares purchased in primary/secondary market as resident Indian will be held on non-repatriable basis. On becoming NRI, the customer has to open a non-repatriable demat account and transfer all the shares bought and held from resident demat account.
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How many Designated Banks can an NRI appoint?
NRI/PIO can appoint only one designated bank for the purpose of routing the transactions under PINS (Portfolio Investment Scheme is the permission that an NRI/PIO requires to trade in the Indian stock market. An NRI can have only one PINS account at any point in time).
Click Here to check the list of Kotak PINS designated branches.
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Is there any limit for investment in shares/convertible debentures by an NRI in the secondary market?
Yes, there is a limit for investment in shares/convertible debentures by an NRI in the secondary market.
Each NRI can invest in shares/convertible debentures either on a repatriation or non-repatriation basis using Portfolio Investment Scheme route, which shall not exceed 5% of the paid up value of shares/convertible debentures in each series, issued by the companies. This must fall within overall permissible limits and is subject to compliance with RBI (Reserve Bank of India) guidelines, which may change from time to time. Apart from that, the aggregate paid-up value of shares/convertible debentures in each of any company purchased on repatriation or non-repatriation basis by NRIs does not exceed 10 percent of the paid up capital of the company.
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What are the general regulations regarding NRI trading in secondary market?
Regulations regarding NRI Trading:
- Intraday (i.e. buy and sell on the same day) trading is not allowed for NRI clients. Therefore, the NRI investor has to take delivery of the shares purchased and give delivery of shares sold.
- Each sale transaction will be credited to client account net of tax. Hence, for every sale transaction capital gains will be calculated. At present, the client would be charged a short-term capital gains tax of 15 percent (plus applicable cess) on the gains, whereas long term capital gains tax is NIL.
- TDS (Tax deducted at source) certificates will be issued by the bank and certificate charges will be levied for each sale transaction.
- No set off will be allowed but while filing returns the client can claim set off against the TDS deducted.
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