How can an NRI invest in Mutual Funds in India?
SBNRI Team
answered on 22/03/2020
An NRI can invest in Mutual Funds In India using their NRE/NRO accounts.
In order to invest in Mutual Funds, NRIs must be registered with a Registered Transfer Agents (RTAs). These RTAs maintain a detailed record of Mutual Fund Investors. There are a number of wealth management services and digital platforms that can help you get registered and handle your KYC requirements for a smooth investment experience.
The top RTAs in India for Mutual Fund Investments are CAMS (Computer Age Management Services) and Karvy. The Mutual Fund Investments can be done on both repatriable basis (for NRE Accounts) and non-repatriable basis (for NRO Account).
Mutual Fund Houses that accept investments from US are:
- DHFL Pramerica Mutual Fund
- Birla Sun Life Mutual Fund
- ICICI Prudential Mutual Fund
- SBI Mutual Fund
- UTI Mutual Fund
- L&T Mutual Fund
- PPFAS Mutual Fund
- Sundaram Mutual Fund
Different types of Mutual Funds are taxed differently:
*(Equity Funds: An equity fund is a mutual fund that invests principally in stocks)
*(Debt Funds: A debt fund is a mutual fund that invests in fixed-interest generating securities such as corporate bonds, government securities)
Nature of Profits / Income | Equity Funds* | Debt Funds* |
| Minimum Holding period for Long term capital gains | 1 year | 3 years |
Short term capital gains taxation | 15% + 4% cess* = 15.60% | As per the tax rate of the investor (30% + 4% cess = 31.20% for investors in the highest tax slab) |
| Long term capital gains taxation | 10% + 4% cess = 10.40% (if the long term gain exceeds Rs 1 Lakh) (long term gains up to Rs 1 Lakh is tax-free) | 20% with indexation* |
*(Cess: A cess is a tax on tax that you pay to the government for purposes set by the government. The cess is charged till the objective set by the government is fulfilled. Eg: Krishi Kalyan Cess, Swachh Bharat Cess etc.)
*(Indexation: Indexation refers to the technique of adjusting income payments using a price index to maintain the purchasing power of the public after inflation)
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Also Watch: NRIs All you need to know before investing in Mutual Funds in India
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The tax on Mutual Funds will be deducted on the format for TDS for an NRI. There are no separate rates for TDS. For an NRI investing in Mutual Funds in India, the gains are pre-taxed (TDS) before they are received in the bank account of the NRI. Is NRI eligible for refund on […]
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KYC refers to Know your Customer. KYC of Mutual Funds for NRIs is a simple process of verifying the details provided by the customer. The following documents are needed for KYC of Mutual Funds for NRIs: Copy of your passport with name, photograph, address and Date of Birth PAN Card Current Residential Proof (temporary or […]
