India is on its way to become a superpower in the world economy and that is mainly due to two factors: the contribution of Indians around the world and the Indian economy itself. Indians abroad have done us proud through their contributions in various fields and is one of the most sought after professionals managing some of the top companies around the world. The Indian economy itself is booming with various positive factors like impressive growth in profitability of Indian corporate houses, good overall growth of the economy. Given these opportunities, investing in Indian markets is ideal right now.

We invite Non Resident Indians to take the opportunity to invest and benefit from the growth potential in India.

Can NRIs invest in mutual funds?

Non Residents Indians and Persons of Indian Origin can invest in mutual fund schemes in India. In case of NRIs no special approval is to be sought from authorities such as the RBI. They can invest in mutual funds on repatriable basis or non-repatriable basis. To invest on a repatriable basis you must have an NRE account or FCNR account with a bank in India. In this case the investment money should be remitted through usual banking channels or from the NRE/FCNR account of the NRI investor.  Investment can be made on a non-repatriation basis as well with investment funds being provided from NRO account or NRE/FCNR account of the investor.

Procedure

For an NRI the procedure of applying in a mutual fund is similar to the one followed by residents. The completed application form must be submitted at the investor service centers along with cheques or bank drafts. Details of the Indian bank account of the investor must be furnished at the time of application. Alternately online application can be made. Investment cannot be made in foreign currency. Rupee cheques drawn from the investor’s bank account in India or from abroad payable in a bank in India or Rupee drafts purchased abroad payable at the city where the application is made must be provided. Usual facilities like nomination, appointing Power of Attorney is available for NRI investors as well.

Redemption proceeds are paid in Indian Rupees by cheque to the account number provided at application. For select banks they may credit proceeds to the account directly. If investments are made on non-repatriable basis redemption proceeds will be credited to the NRO account of the investor. Similarly if a person turns an NRI after purchasing of units the maturity proceeds will not qualify for repatriation. However dividends are fully repatriable in all cases.

Tax Treatment

Mutual fund units are treated as capital assets and attract capital gains tax in India. If held for more than 12 months long term capital gains tax is applicable and for periods less than that short term capital gains tax is applicable. No tax is to be paid on dividends received. Indexation benefits are available for long term capital gains. TDS applies on capital gains tax. TDS certificate or Form 16 A is dispatched to the investor along with redemption warrant. Mutual fund units do not attract wealth tax.

Top AMCs that accepts NRI investments

• SBI Mutual Fund
• Birla Sun Life Mutual Fund
• ICICI Prudential Mutual Fund
• UTI Mutual Fund
• HDFC Mutual Fund
• Sundaram Mutual Fund
• DHFL Pramerica Mutual Fund
• PPFAS Mutual Fund
• L&T Mutual Fund

Points to remember when investing in India

• Your investment carries the right of repatriation of the amount invested and amount earned, only until you remain an NRI.
• Residential address in the resident country is a mandatory field. Hence, you must also attach an attested proof along with application.
• The compliance requirements in the US and Canada are more stringent as compared to other nations. According to FATCA guidelines, all financial institutions must share the details of financial transactions involving a US person with the US Government.
• Are you a resident of any of the 90 countries that have signed Common Reporting Standard? CRS is a global reporting system to combat tax evasion.