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How NRIs can invest in mutual funds in India

How NRIs can invest in mutual funds in India

Most Indians migrate abroad in search of better opportunities. Unsurprisingly, many harbor the dream of coming back one day. A majority has dependents in their home country. In such scenarios, making investments in India is inevitable. But according to Foreign Exchange Management Act, NRIs (Non-resident Indians) can invest in Indian mutual fund scheme. A mutual fund in your home country can give you a diversified portfolio with the desired mix of debt and equity securities. Even if you are risk-averse and want a fixed income investment avenue, the Indian debt market comes with higher interest rates. You may start with equity funds, debt funds or hybrid funds.

Here is the step by step guide of NRI’s investment in Mutual Funds:

Prerequisites:

first step involves opening an NRE or NRO account. NRIs can invest on repatriable or non-repatriable basis using funds from the NRE or NRO accounts respectively.

KYC :

The NRI should complete KYC formalities by filling up a form and submitting documents. The papers have to attest by an authorized official who can carry out in-person verification.

Application form :

A standard mutual fund application form needs to be filled by the NRI investor. The FATCA and CRS declarations should also be made.

Mode of investing:

There are two ways of going about investing in Indian mutual funds—self or through a power of attorney. The power of attorney holder must be KYC compliant.

Mode of payment:

The payment made by cheque was drawn on the NRE or NRO account. A foreign inward remittance certificate may have to submit to confirm the source of funds.

Redemption:

Investments can redeem by following the redemption procedure mentioned by the fund. Redemption proceeds shall credit to the respective NRE/NRO bank account of the investor.

Points to note:

1. If the account details of a foreign bank provided, the application will reject.
2. On redemption of units, the tax will deduct at source on the capital gains made on the investment.

For any query regarding Mutual Fund Investment, you can call us at +918010007700 or you can visit our office.

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