What are the best Mutual funds for US NRI?
SBNRI Team
answered on 30/03/2020
Best Mutual funds for US NRIs: Updated List 2020
- 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 (Parag Parikh Financial Advisory Services)
- Sundaram Mutual Fund
Different types of Mutual Funds are taxed differently:
While there are multiple Mutual Fund Houses that accept investments from US NRIs, The taxation on mutual funds vary with the types of funds. The taxation is charged as per the following table:
*(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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