NRIs can take advantage of Indian capital market by investing through mutual funds. Investment can also be made alongwith a Resident Indian being a Joint holder. Investment can be made either online or off-line in a traditional manner.
NRIS Should Be KYC Compliant
An NRI investor should be KYC Compliant before making investments in mutual funds. Documents like copies of PAN, passport and foreign address proof are required as part of KYC documentation procedure
Mode Of Payment For Repatriable And Non-Repatriable Basis
- Purchase on Repatriable Basis: NRIs can make the payments by using the cheque from an NRE account or draft from an FCNR account maintained with banks authorized to deal in foreign exchange in India.
- Purchase on Non-Repatriable Basis: NRIs can make the payment from an NRO account maintained with banks authorized to deal in foreign exchange in India.
A Power Of Attorney Holder Can Invest On Behalf Of NRIs
A POA holder has the authority to invest on behalf of NRIs. While applying for purchase of units, the POA holder needs to submit the original POA or an attested copy duly notarized. The POA should contain the signature of both the NRI investor and the POA holder. Only then the POA is registered and the POA holder has the right to transact on behalf of the NRI investor.
Nomination is allowed by NRIs for their investments in mutual funds. They can either nominate an NRI or an Indian resident. However, POA holder is not allowed to nominate on behalf of an NRI investor.
Taxation Of MF Returns
Taxation of mutual fund returns for NRIs is on the lines of a resident investor. However, in the case of NRIs, mutual fund deduct tax at source for short and long-term capital gains.