Who is NRI?

NRI is abbreviated by Non-Resident an Indian. The person who is residing outside India more than 182 days or permanently is called as NRI. NRI is Indian citizen who migrated to other country from India for various purposes.

Investment of NRI

Normally, investors (NRIs) invest in real estates. In India now NRI have option on investing on mutual funds. But there are some regulations which needed to be followed and before they invest.

Can NRI invest in mutual funds?

  • NRIs/ PIO can invest in mutual fund schemes in India
  • They can invest in mutual funds on repatriable or Non-repatriable basis. Remittance of investment money is done through the banking channel or from the NRE/ FCNR account of NRI investors.

Why NRI invest in mutual funds?

Investors get more beneficial from mutual funds instead of investing directly in the stocks or in fixed deposits.

Accepting NRIs

NRIs are accepted to invest in mutual funds. Except US and Canadian NRIs other NRIs can invest on mutual funds without any restrictions. Those in US and Canadian NRIs can only invest in L&T and Sundaram Mutual funds at present. NRIs are also need to analyze the tax slabs for their better returns.

Taxation on mutual funds as on (2014 – 2015)

Fund type STCG Tax LTCG Tax
Equity 15% Nil
Debt 30% Listed – 20%, Unlisted – 10%

NRI Requirements

  • Valid passport, place of birth as India in foreign passport, copy of OCI/ PIO.
  • PIS permission status
  • PAN card
  • Overseas address proof (or) ID proof
  • Photos of investors
  • Bank A/c proof

Tax treatment

Mutual fund units are treated as capital assets and capital gain tax is been applied in India. If it is more than 12 months LTCG is applicable. For dividends received, there is no tax to be paid. Indexation benefits are available for LTCG. TDS is applies for capital gain tax. There is no wealth tax for mutual funds.


Contact us