An investor residing outside India due to some temporary emigration, but is a citizen of India or Person of Indian Origin.
An individual who has the citizenship of some other country but either himself or his/her ancestors were born in India.
There are the following series of steps to be taken up by the NRI client in order to invest in mutual funds
i. Register on the website and download the KYC form.
ii.Complete all the KYC formalities and submit the required documents with it.
iii.Complete your profile that you have created.
iv.Make payment through the online debit option available.
There are certain steps required to be followed in order to fulfill the KYC formalities of an NRI investor.
i.File the KYC form duly filled.
ii.A self-attested copy of PAN card or your Passport as identity proof.
iii.A self-attested copy of the overseas address.
iv.A copy of the Indian address proof.
v.A bank statement of overseas bank account.
vi.A funds remittance certificate from the bank overseas.
After the documents have been submitted it will take some time to verify the documents and then the client will be KYC registered.
Yes, an NRI client can invest in any of the mutual fund schemes operating in the Indian mutual fund industry. However, they will not get any tax benefit for even after investing in ELSS fund and they are not eligible to invest in RGESS (as per the regulations of the scheme)
Yes, an NRI client is entitled to invest in mutual funds through SIP. The client has to fill a standing instruction form which carries an auto-debit instruction for paying the installments through his overseas bank account.
As per the mutual fund investment rules for NRIs, they are not allowed to invest in any currency other than Indian Rupees.
Non-Resident (External) Rupee (NRE) is a Rupee account using which the funds can be repatriated. It means that the account can be started with funds which can be either transmitted to abroad or from abroad.
Non-Resident Ordinary Rupee (NRO) is a Rupee account which can be initiated with funds which are remitted either from abroad or are generated in the country itself. The striking feature is that the amount in this account is non-repatriable. However, funds in NRO account can be repatriated based on the rules that are being followed at the time of repatriation.
If an NRI opts for investing online then he/she is eligible to apply online for redemption too. Otherwise, the clients are required to submit the redemption request in original at the nearest official point of acceptance of transactions. After the request has been accepted the amount will be credited as follows:
For non-repatriable investments, the amount generated by way of redemption will be honored through a cheque payable at an NRO account.
NRI clients are also free to get their redemption amount transferred promptly to their NRE/NRO bank account in India, which is quite hassle-free.
As per the new amendments in FEMA (Foreign Exchange Management Act), an NRI client has the liberty to own a joint account with a Resident Indian and a Non-resident Indian as well.
The dividends of each and every scheme are tax free for the NRI clients. While long-term capital gains (equity) are tax-free, whereas for short term capital gains (equity) 15% tax has to be paid. On the other gains, the NRI clients have to pay tax which is 20% with indexation and 10% without indexation.
Yes, all the NRIs are allowed to have a nominee(s) in their mutual fund account to whom the Mutual Fund units will be transferred after the holder’s death in case of single holder. But, if it is a joint account then the units will be transferred to the nominee(s) only after both the holders die.
After completing the KYC norms the NRI clients will be able to get a fully operative mutual fund account within 1-4 days business days.
Yes, an NRI client is eligible to convert the status of his account to resident as per the Section 6(5) of FEMA. But, few formalities are to be fulfilled. The client has to hold the responsibility of informing about the change in status to the assigned and authorized dealer through which he/she had initiated the investment opened the demat account. Thereafter, a new demat account having a resident status would be opened and all the securities are required to be transferred from the previous NRI account to the new resident account. After the completion of this process the old account is closed and the client can then operate the new one.
An NRI client can access the online investment method through any part of the world apart from the few countries that have been banned as they are FATF non-compliant / non-cooperative or are under US sanctions. An Indian citizen residing in countries like Burma, Iraq, Indonesia, Ecuador, North Korea, etc. are not allowed to invest in India.
According to the guidelines provided by FEMA, an NRI client is not allowed to gift the mutual funds or its units to any of the resident relatives in any case.
Any NRI client does not require to take any prior approvals from the RBI before instigating his/her investment procedure.
As per the prescribed guidelines any NRI residing in Canada and the United States of America is not eligible to invest in mutual funds. Also, any resident of Bangladesh and Pakistan will not be given the rights to invest in mutual funds in India.
The client can take up the online method of investing and monitoring to maintain a track record of the schemes in which he/she has invested. All they have to do is to get a userid and password, then they are free to invest and follow the momentum in the invested schemes by sitting anywhere in the world.
We are live 365x24x7. Let us know if you have any queries or suggestions.