An NRI investor is a Non-Resident Indian residing abroad but holding Indian citizenship or origin. NRIs can invest in India through NRE, NRO, or FCNR accounts in instruments like mutual funds, equities, and real estate, following FEMA and tax regulations.
An individual who has the citizenship of some other country but either himself or his/her ancestors were born in India.
NRIs can invest just like resident individuals. Simply create a profile on the MySIPonline app or website and complete all sections, including KYC, Personal Details, Nominee, and Bank Details. After submitting the profile, NRI clients must provide a bank cheque from their NRE/NRO account to the MySIPonline team to activate the profile
Please find below the list of required documents:
Yes, an NRI client generally has access to most mutual fund schemes in India, similar to resident individuals. However, some restrictions may apply to specific schemes, particularly those investing in Indian equities or debt.
NRIs can invest in mutual funds via NRE, NRO, or FCNR accounts and are subject to regulations set by the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA). Additionally, certain funds may require compliance with KYC norms, and NRIs must submit the necessary documents like bank cheques from NRE/NRO accounts for activation.
It's important for NRIs to verify specific scheme details and terms, as some funds may have additional conditions based on their investment strategy or the investor's country of residence.
For NRIs, short-term capital gains (STCG) on mutual fund units held for less than a year are taxed at 15%. Long-term capital gains (LTCG) from equity-oriented mutual funds are tax-free up to an annual exemption limit of ₹1 lakh.
No, NRIs cannot make mutual fund investments in foreign currency. Investments must be made in Indian Rupees (INR) through NRE or NRO accounts. The funds are converted to INR before the investment is made.
NRE (Non-Resident External) and NRO (Non-Resident Ordinary) accounts serve different purposes for NRIs. NRE accounts are used for managing funds from abroad, offering full repatriability and tax-free interest in India. In contrast, NRO accounts manage income earned in India and are subject to tax (TDS), with non-repatriable funds, although repatriation is allowed under certain conditions. NRE accounts can only be funded with foreign income, while NRO accounts can hold both foreign and Indian income.
No, tax on mutual fund capital gains is not automatically deducted and must be paid when you redeem your units. However, TDS (Tax Deducted at Source) applies to dividend income from debt funds.
Yes, an NRI can have a joint mutual fund account with a resident Indian. However, the account must be opened under the specific guidelines set by the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA). The NRI investor can jointly invest in mutual funds with a resident Indian, but the account must adhere to the regulations, and the NRI's contribution must be made through their NRE or NRO accounts.
The TDS structure for NRIs has been revised with new rates. Short-term gains from listed assets like bonds and stocks, as well as equity mutual funds, are taxed at 20%, while long-term gains are taxed at 12.5%. Gains from debt mutual funds and rental income are taxed at 30% for both short and long terms. Foreign debt/equity, unlisted assets, gold, and real estate attract a 30% TDS for short-term gains and 12.5% for long-term gains. NRIs can benefit from DTAA provisions to reduce tax liability and must file ITR to claim refunds if TDS exceeds the actual tax payable. Compliance with RBI and FEMA guidelines is essential for repatriating funds.
Yes, NRIs are allowed to designate a nominee for their mutual fund accounts. The nominee can be a family member or any individual of their choice. The process of nominating a person is similar to that for resident individuals, and the NRI investor needs to provide nominee details during the account opening or update the nomination later if required.
After completing the KYC norms the NRI clients will be able to get a fully operative mutual fund account within 1-4 days business days.
Yes, it is possible to convert an NRI mutual fund account to a resident Indian account. Here's what you need to do:
It’s important to notify your financial institution and convert your accounts within a reasonable time after returning to India permanently. Failing to do so may be considered a violation of FEMA regulations.
Yes, NRI clients can make online transactions for their mutual fund investments. They can invest, redeem, and manage their portfolios through the MySIPonline platform. Transactions can be carried out using their NRE or NRO accounts, and all processes are facilitated in accordance with the guidelines set by the Reserve Bank of India (RBI) and the Foreign Exchange Management Act (FEMA).
According to the guidelines provided by FEMA, an NRI client is not allowed to gift the mutual funds or its units to any of the resident relatives in any case.
No, an NRI does not need prior approval from the Reserve Bank of India (RBI) to start investing in mutual funds in India.
Countries like the United States and Canada may have restrictions on investing in Indian mutual funds due to FATCA and CRS guidelines, which require financial institutions to report foreign clients' investments. However, some mutual funds, like ICICI Prudential, Birla Sun Life, and SBI Mutual Fund, may allow investments from these countries with additional declarations and offline transactions. NRIs can invest in mutual funds in India by adhering to FEMA regulations.
The client can take up the online method of investing and monitoring to maintain a track record of the schemes in which he/she has invested. All they have to do is to get a userid and password, then they are free to invest and follow the momentum in the invested schemes by sitting anywhere in the world.
