NRI Services

India has turned into a splendid investment destination for Non-Resident Indians and persons of Indian origin. A growing & robust economy, a strong Rupee, and profitable companies have together ensured that investors get maximum returns from both equity and debt markets. Highly transparent and automated stock exchange and a resonant mutual fund industry have ensured that investments are liquid and transparent. Taking advantage of this environment and our proven experience in the market.

Service Offered (Non-Resident Indians)

  • How NRI strategy would work. The investor opens an NRE account with the funds repatriated into India.
  • Investor defines his investment goals.
  • We design a mutual fund portfolio based on investment objectives
  • An investor can give a mandate letter making Mr. x mandate holder implement strategy without the loss of time and investor intervention or the Investor can make one of his known persons mandate holder who can execute documents and sign cheques on his behalf.
  • We monitor the performance and progress of the portfolio on a continuous basis and refine strategy if required and carry out portfolio rebalancing.
  • We provide regular updates of the portfolio to the investor. Investment in stocks and mutual funds is subject to market risks. Investors should read the offer documents carefully and consult their Mutual Fund Distributor before investing.
FAQs relating to NRI

Who is an NRI ?

According to the Foreign Exchange Management Act (FEMA), 1999, “an NRI is a person resident outside India who is either a citizen of India or a person of Indian origin (PIO).”

A person who has been in India for 182 days or more during a financial year and 265 days or more during the preceding four financial years qualifies as an NRI. NRIs can continue to enjoy non – resident status in India if their presence in India is more than 60 days but less than 182 days in a financial year, even if their stay in India during the past four financial years is 365 days or more.

Also, a person who has been deputed in a job overseas for more than 6 months, also qualifies for non-resident status.

However, those who stay abroad on business visits or medical treatment, study, or other purposes which do not indicate or mean an intention to stay there for an indefinite period are not considered NRI.

Who is a PIO?

A Person of Indian Origin (PIO) means a citizen of any country (other than Bangladesh or Pakistan), if he or she at any time has held an Indian passport or

He or she or either of his/her parents or grandparents was a citizen of India by virtue of the constitution of India

He or she is a spouse of an Indian citizen.

PIO Card

Person of Indian Origin (PIO) Cards are issued by Ministry of External Affairs, Government of India to persons of Indian origin through Indian missions abroad. Specific information on rules, forms, particular offices, missions is available here http://mha.nic.in/pioscheme

Types of A/cs for NRI’s

An NRI can maintain three types of rupee accounts in India as mentioned below –

NRE: Non-Resident (External) Rupee Account

NRO: Non-Resident (Ordinary) Rupee Account

FCNR- B: Foreign Currency (Non -Resident)

NRE & NRO A/cs

Non-Resident (External) Rupee (NRE) Account – NRE is a rupee bank account from which funds are freely repatriable. It can be opened with either funds remitted from abroad or local funds maintained in NRE/ FCNR accounts, which can be remitted abroad. The deposits can be used for all legitimate purposes. The balance in the account is freely repatriable. Interest credited to the NRE accounts is exempt from tax in the hands of the NRI

Non-Resident Ordinary Rupee (NRO) Account – NRO is a rupee bank account and can be opened with funds either remitted from abroad or generated in India. The amounts in such an account generally cannot be repatriable. However, funds in NRO accounts can be remitted abroad subject to/as per various directives in force at the time of repatriation. However, funds in the NRO bank account can be remitted abroad subject to/as per various directives in force at the time of repatriation.

Differences between an NRE & NRO a/c

Basis NRE Account NRO Account
Acronym Non-Resident External Account Non Resident Ordinary Account
Meaning It is an account of an NRI to transfer foreign earnings to India It is an account of an NRI to manage the income earned in India
Taxability Interest earned is tax-free Interest earned is taxable
Repatriability Can repatriate Can repatriate the interest amount, the principle amount can be repatriated within the set limits
Joint Account Can be opened by two NRIs Can be opened by an NRI along with an Indian citizen or another NRI
Deposits and Withdrawals Can deposit in foreign currency, and withdraw in Indian currency Can deposit in foreign as well as Indian currency, and withdraw in Indian currency
Exchange Rate Risk Prone to risk Not prone to risk

Which Mutual Fund Companies accept NRI investments?

All the Asset Management Companies (AMCs) in India don’t allow NRIs, especially from US and Canada because of the cumbersome compliance requirements under Foreign Account Tax Compliance Act (FATCA) in these countries. However following fund houses do accept investments from NRIs from US and Canada –

Aditya Birla Sun Life Mutual Fund ICICI Prudential Mutual Fund UTI Mutual Fund SBI Mutual Fund IDFC Mutual Fund Nippon India Mutual Fund Sundaram Mutual Fund L&T Mutual Fund  PPFAS mutual fund ICICI Prudential Mutual Fund Axis Mutual Fund

NRIs from other countries can invest in almost any scheme of any mutual fund in India. They are allowed to invest in mutual funds in India on a repatriable or non-repatriable basis subject to regulations prescribed under the Foreign Exchange Management Act (FEMA).

NRI/PIO can invest in ELSS (Equity Linked Savings Schemes) of Mutual Funds if he or she is willing to avail tax rebate under Section 80C of The Income Tax Act 1961. Currently the limit is Rs. 150,000 (Rupees One Lac Fifty Thousand only) per annum.

How are Dividends treated for NRIs?

Normally, dividends and redemptions are paid through direct credit to the designated bank account provided by the NRI in the scheme.

Is Indexation available?

Yes, the indexation benefit is allowed to NRIs. Generally, indexation benefit is required to be taken into account, in context to a mutual fund, while calculating long term capital gains taxes for debt mutual funds.

Mutual fund taxation for NRI’s

Equity or Equity oriented Mutual Funds: Short term capital gains (holding period < 1 year) are taxed at 15%. Apart from tax @ 15%, 15% surcharge + 3% Cess is also payable. Thus, making it a total of 17.7675%.

Long-term capital gains (investments held for more than 1 year) are however completely exempt from capital gains taxes.

Tax is deducted at source (TDS) @17.7675% in case of short term capital gains.

Debt Funds: Short-term capital gains (holding period < 3 years) are taxed as per the income tax slab of the NRI investor. A 15% surcharge + 3% Cess is also payable. For example – If an NRI is in 30% tax bracket, he or she will have to pay 35.535% of taxes.

Tax is deducted at source (TDS) @35.535% in case of short term capital gains (in case of 30% tax bracket).

Long term capital gains (holding period > 3 years) are taxed (provided the funds are listed) at 20% after indexation. Surcharge and cess are also payable @15% + 3% respectively. Thus, the total tax is 23.69%.

Tax is deducted at source (TDS) @23.69% in case of long term capital gains in case of debt funds.

Dividends for NRI’s

Dividends are tax-free in the hands of the NRI investors. However, in the case of dividends received from debt or hybrid debt-oriented mutual funds (MIPs), the mutual fund houses pay dividend distribution tax (DDT) @ rate of 28.84% before distributing dividends.

TDS for NRI’s

Tax is deducted at source (TDS) @17.7675% in case of short term capital gains arising out of equity or equity-oriented mutual funds.

Tax is deducted at source (TDS) @35.535% in case of short term capital gains (Example – If the NRI is in 30% tax bracket).

Tax is deducted at source (TDS) @23.69% in case of long term capital gains in case of debt funds. No TDS is done in case of long term capital gains arising out of equity mutual fund investments.

Like resident individuals, TDS certificates (Form 16A) are issued on a quarterly basis to NRIs and emailed to their registered email ID with the AMC or sent through the post. The same can also be viewed online after registering with TRACES (TDS Reconciliation Analysis and Correction Enabling System) https://nriservices.tdscpc.gov.in/nriapp/login.xhtml

FATCA & KYC

NRIs will need to submit following documents to the AMC (mutual fund house) or the R&T agent for fulfilling the mutual funds KYC requirements –

Self-attested copy of PAN Self attested copy of Passport/ PIO Card Address proof (both Indian and overseas) Passport size photograph Duly filled in KYC Form along with color passport size photograph

Additional information required for FATCA (Foreign Account Tax Compliance Act) –

Tax number of country of residency (Other than India) Income Slab Occupation Total net worth Declaration if you are politically exposed

In Personal Verification for NRI's

NRI can approach authorized officials of overseas branches of Scheduled Commercial Banks registered in India, notary public, Court Magistrate, Judge, Indian Embassy/Consulate General in the country of their residency. Such individuals are permitted to do IPV along with verification of originals.

Once IPV and mandatory document verification is completed, you can send the KYC form along with the aforementioned documents to their mutual fund distributor or the fund house (AMC) or the mutual fund R&T agents (CAMS or Karvy). On submission, the KYC information will be updated in the system in a few weeks.

The KYC details can be viewed by entering the PAN number here – https://www.cvlkra.com/kycpaninquiry.aspx

Power of Attorney for NRI’s

After the NRI has made the initial investments, it may not be possible for him to keep track of his money and take investment decisions based on market movements that at times may call for additional purchases, switches or redemptions, etc. even when he is away.

Mutual funds allow a power of attorney (POA) holder to take these decisions on the behalf of the NRI investor. All that the POA holder needs to do is to submit the original POA or an attested copy of it to the fund house (AMC). The POA should have the signatures of both the NRI and the POA holder. The POA holder’s signature will be verified for processing any such transaction.

Nomination

An NRI can make a resident Indian or NRI/PIO his nominee in the mutual fund schemes in which he has invested. An NRI can also be the nominee for investments made by a local resident Indian individual. Fund houses also allow an NRI to have a joint holding with a resident Indian or another NRI / PIO in a scheme.