How can NRIs invest in mutual funds in India?

mutual funds growth or dividend or dividend reinvestment


As a non-resident, you may want to take exposure to Indian equity markets. Picking up stocks on their own is not everybody’s cup of team. Such non-resident investors may take exposure to equity markets through equity mutual funds.

In this post, I will discuss answer basic queries that an NRI investor may have about mutual fund investments in India. I will also discuss the procedure NRIs can follow to start investing in mutual funds in India.

Can NRIs invest in mutual funds in India?

Yes, NRIs can invest in mutual funds in India on both repatriable and non-repatriable basis.

No approval is required from RBI or any other body to invest in mutual funds in India. 

You need to be KYC compliant

Before you invest in mutual funds, you will have to go through KYC (Know your customer) procedure i.e. you must be KYC compliant.

Do note you do NOT need to repeat KYC exercise with every AMC (mutual fund). You need to go through this procedure just once. Your KYC is automatically updated in the central repository. You can check your KYC status here. If you are KYC compliant, you can invest in any mutual fund in India.

I am a new investor. How do I get my KYC done?

You will need to submit the following documents to the AMC (mutual fund house) or R&T agent:

  1. Self-attested copy of PAN
  2. Self-attested copy of Passport
  3. Address proof (both Indian and overseas)
  4. Passport size photograph
  5. KYC Form

You can check the complete set of instructions in the KYC form.

Apart from submitting the above documents, you also need to get in-person verification (IPV) done. During IPV, an authorized official confirms your presence and verifies the copies of aforesaid documents with the originals.

If you are on a visit to India, you can simply visit any CAMS, Karvy, AMC branch or distributor office in your city with the aforesaid documents and complete the process. Documents verification and IPV will be done at the same time and you are good to go.

How do I get In-person verification (IPV) done if I am not in India?

You 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 where you reside. Such individuals are permitted to do IPV along with verification of originals.

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

Any additional documents to send?

Along with KYC form and documents, you can send the purchase form (Common Application Form) along with a cheque for the purchase amount. Additionally, you must also send FATCA-CRS declaration form.  Typically, a common application form will automatically have FATCA-CRS declaration form.

Which bank account to use? NRE or NRO?

If you want to invest on non-repatriable basis, you can invest from your NRO account.

Alternatively, if you want to invest on repatriable basis, the funds for purchase must come from your NRE account or FCNR account or inward remittance from abroad.

Separate mutual fund folios will be created for NRO and NRE accounts so that it is easier to keep track.

An NRI cannot make an investment in foreign currency.

Mutual Fund for NRIs: How to set up SIP?

To set up SIP, you can send the filled-in SIP registration form to the AMC or through the distributor. Alternatively, you can set up SIPs online too.

However, since SIP require auto-debit of your bank account, you will have to provide a one-time bank mandate (OTM) to the AMC/RTA/intermediary (so that they can debit your bank account).

Residents can provide this mandate online through Aadhaar verification (an example). CAMS also provides a similar e-mandate facility but only for residents.

Non-residents can provide such a mandate in a paper form. Not a difficult thing to do but involves a physical step.

How should I start my investments (once I am KYC compliant)?

There are many ways:

  1. Invest through an aggregator portal like FundsIndia, ICICIDirect or Scripbox.
  2. Invest through a Mutual Fund distributor.

The above two options will get you invested in the regular plan of MF schemes.

If you want to invest in direct plans of MF schemes

  1. Directly approach the AMC or the mutual fund house.
  2. Register on the AMC website and start investing.
  3. Invest from CAMS/Karvy websites
  4. Register with MFUtility (submit CAN and PayEezz registration form). You can register with MFU online.
  5. Open your account with one of the mutual fund direct plan websites and invest in direct plans subsequently.

If you are confused about the difference between regular and direct mutual funds and are sure about the impact on returns, read this post.

If you want to invest in direct plans of MF schemes but cannot select funds on your own, you can approach a SEBI registered Investment Adviser, seek advice and subsequently invest in direct plans to MF schemes.

The key lies in KYC compliance. Once you are KYC compliant, you can do almost everything online. You can purchase, redeem, start and cancel SIPs online.

How are capital gains/dividends taxed for NRIs?

The tax treatment is no different as compared to a resident investor.

Equity Funds: Short-term capital gains (holding period < 1 year) are taxed at 15%. Long-term capital gains (holding period > 1 year) are taxed at 10% (applicable from FY2019). LTCG to the extent of Rs 1 lac is exempt per financial year. Tax is applicable only on LTCG in excess of Rs 1 lac.

Debt Funds: Short-term capital gains (holding period < 3 years) are taxed as per your income tax slab. Long-term capital gains (holding period > 3 years) are taxed at 20% less indexation.

Surcharge and cess are extra.

Dividends are tax-free in the hands of the investor. However, AMC pays(deducts) Dividend distribution tax (DDT) before paying you the dividend. In case of equity funds, the DDT is 10%  in the case of equity funds. Since DDT is charged on grossed up basis, the effective tax liability will be 11.46% (including cess and surcharge).

In the case of debt mutual funds, DDT is 25%. Therefore, the tax hit on dividends will be 27.97% (including cess and surcharge).

Here is the latest on capital gains tax on mutual funds for NRI.

NRI mutual fund taxation nri capital gains tax on mutual funds tds on mutual fund redemption

For more on NRI mutual fund taxation and TDS on redemption, refer to this post.

Is TDS deducted at the time of sale of mutual funds?

Yes, this can be a point of pain for many NRIs.

For NRIs, if there is a prospect of tax liability, the tax is deducted at the highest income tax rate.

TDS on short-term capital gains (STCG) on equity funds is 15%.

TDS on LTCG on equity funds will be 10%. Do note, even though LTCG on equity/equity funds is exempt to the extent of Rs 1 lac per year, AMC will still deduct TDS on the entire LTCG. This is because the AMC does not know about your other gains.

TDS on STCG on debt funds will be 30% (irrespective of your income tax slab).

TDS on LTCG on debt funds will be 20% (no indexation benefit).

If any excess tax has been deducted, you can claim it back at the time of filing income tax returns.

Dividends are not taxed in the hands of the investors. Hence, TDS is not applicable.

Must Read: Income Tax and TDS rates for NRIs

Where are the redemption proceeds credited?

Redemption proceeds can be directly credited to your bank account (NRO or NRE). You can also choose to receive redemption proceeds by cheque.

I am a US based NRI. Can I invest in mutual funds in India?

If you are an NRI based in US or Canada, following mutual fund houses have now started accepting investing in

  1. Birla Sun Life Mutual Fund
  2. UTI Mutual Fund
  3. SBI Mutual Fund
  4. Sundaram Mutual Fund
  5. L&T Mutual Fund
  6. DHFL Pramerica
  7. PPFAS mutual fund
  8. ICICI Prudential Mutual Fund

Hence, a decent choice is now available to even US-based NRIs. However, not all the AMCs are accepting online investments. You are advised to check with respective AMC about how to proceed. But yes, be prepared to slug it out. Setting up the investment account for US and Canada based NRIs may not be hassle-free.

US NRIs face an additional tax issue since MF investments in India qualify as PFIC (passive foreign investment company). Investing in Indian mutual funds will create additional tax and compliance problem for such investors.

Additional operational hassle because of FIRC

FIRC stands for Foreign Inward Remittance Certificate. It is a proof of making inward remittance to your NRE/NRO bank account.

Some AMCs insist on FIRC for purchase transactions.  The idea is that only those sales proceeds get credited to NRE accounts where the purchase was made through NRE account.

If you don’t provide FIRC, you face problems at the time of redemption. Instead of crediting your NRE account online, the bank sends a cheque to your correspondence address. So, you will have to first track the cheque and then deposit that in your NRE account. Getting a cheque credited to your NRE account is one big hassle.

Frankly, I have never been able to understand the utility of FIRC in MF transactions.

Since the investments are being made in Indian Rupees from NRE/NRO account, there can’t possibly be FIRC for a corresponding purchase transaction in rupees. FIRC can only be for crediting money to NRE or NRO account (inward remittance).

Moreover, there are separate folios for NRE and NRO investments. Therefore, if you are redeeming from an NRE mutual fund folio, the money for purchase should have come from NRE bank account. And you can always expect the bank (where the NRE account is held) to have checks that only eligible credits are made to NRE accounts. Therefore, for me, it makes little sense why an AMC should ask for FIRC at the time of redemption.

However, since I am not a FEMA expert, there may be greater issues than those I am aware of.

FIRC don’t come for free. You have to pay for these certificates. The charges will vary across banks.

The good part is that the AMCs are fine with bank statements that show corresponding purchase transactions. You don’t really have to submit FIRC to AMCs. Bank statements will suffice.

Risk you must be aware of

India may present a great opportunity in terms of returns but you must also consider exchange rate risk.

Though you expect to earn better returns in India, be mindful of the risk of rupee depreciation too. For instance, you invest USD 100,000 in India at exchange rate INR 65/USD. Total investment is Rs 65 lacs.  You corpus grows at 10% per annum to 1.05 crores in 5 years. Let’s assume rupee depreciates from INR 65/USD to INR 85/USD. So, Rs 1.05 crores is equivalent to USD 123,539. A return of 4.3% p.a. in dollar terms.

This post was first published in June 2016 and has been updated since.

175 thoughts on “How can NRIs invest in mutual funds in India?”

  1. No RTA or AMC allows KYC submission without an initial investment, I guess none of the advisor sites are aware of this.

    1. You can apply for CAN and KYC without making any investment to CAMS. After that you can invest in direct mutual funds if reqd through free online platform of mutual fund unity.

      1. Deepesh Raghaw

        Thanks Mr. Mathew. Completely missed that.
        Thanks for pointing out.
        CAN registration and KYC forms can also be mailed to MFU Thane office. MFU passes the KYC registation request to KRA.

  2. though there is long term capital gain exemption in India, gains are taxable in their resident country. At what rate, is there any clarity on that?

    1. Deepesh Raghaw

      Dear Ramana,
      That depends on your country of residence. This has nothing to do with Indian tax laws.
      You will be able to claim credit for taxes already paid if India has DTAA (double taxation avoidance treaty).
      Talk to a local tax consultant.

  3. Hi Deepesh, Can US base person invest in mutual fund by MFU platform?

    As per information available on internet, Except L&T MF all other AMC stopped accepting US base person investment due to FATCA reporting guide lines.

    1. Deepesh Raghaw

      Dear Jiten,
      You can register CAN with MFU.
      Just that you will be able to invest with AMCs which accept investments from US based persons.
      Earlier, the AMCs were not allowing. Now, a few AMC do.
      I have myself checked with these AMCs (mentioned in my post). These accept investments from US based person.

      1. Hi Deepesh,
        I have been in touch with an online startup distributor for investing in MFs as a US tax paying resident. Apparently, there were a few FATCA compliant AMCs ready to take investments from US NRIs, but turns out that in a very recent move there is a blanket level restrictions by all AMCs to invest via the online channel for all US/Canada based tax residents.

        As a matter of fact, this is what ICICI direct mentioned to my distributor – “With reference to your e-mail, this is to inform you that as per the business requirement (in light of the SEC regulation) and post approval from the compliance team, it has been decided that NRI investors residing in the countries like USA and Canada should be restricted from investing in all the Mutual Fund schemes across all Asset Management Companies(AMC) on our online portal.”

        Looks like there is a blanket level restriction for investments done on online portals, however, some AMCs might be ready to accept offline investments via cheques. What is frustrating is that no business journalists are covering this story and raising it as an issue in Indian media.

        Given your network in the industry, could you find out if this is really the case? and If so, does Demonitization have something to do with it?


        1. Dear TK,
          The problem is not due to FATCA and due to SEC regulation (which puts restrictions on soliciting investments from more than 15 US persons). FATCA comes into picture only if investments exceed 50K USD.
          AMCs have been trying to wriggle around this restriction by saying that they are not soliciting investments. And investors are investing on own. In fact, they ask for signed declaration too in this regard.
          Not sure when this loop hole will be plugged.
          Hence, everyone has own interpretation. A number of AMCs have started accepting investments from US persons.
          SBI and ICICI do not accept online investments for sure.
          Birla Sun Life has confirmed to me that they accept online investments. Quite possible you can do only from their website and not through any other portal.
          Hence, it is not blanket decision. It is at AMC level.
          The underlying theme is that everybody is looking for a workaround. If you read ICICI Pru statement, it is the decision of the compliance team. As I understand, there is no such directive (to not accept investments in offline mode) from SEC.

          Suggest you go through the following brilliant article from MoneyLife which explains all the issues quite clearly.

          As I understand, You need to subscribe to MoneyLife magazine to read this article. I am a subscriber myself. Not to expensive.
          If you want to learn about malpractices in financial services industry and investor activism, this is the magazine (or online subscription) to go for.

  4. Hi Deepesh,
    I have been investing INR 30,000 per month in 6 funds since 2010, another 30 000 since 2013 through SIPs. Additionally, another 18 lakh rupees was invested as lumpsum amount.

    Most of the funds are equity funds.

    My question is if I want to switch from regular to direct plans, is it advisable or not considering the parameters like LTCG, exit load etc.?

    Please reply.


    1. Deepesh Raghaw

      Hi Srinivas,
      Every installment of SIP (or the units purchased) is subject to fresh exit load and capital gains implication.
      For instance, units purchase through SIP installment on June 15, 2016 shall be subject to exit loan till June 15, 2017. Ditto for capital gains.
      Similarly units purchase through SIP installment on July 15, 2016 shall be subject to exit load till July 15, 2017.
      It makes perfect sense to switch from regular to direct. You will save a lot of money.
      You can switch units that you purchased before July 2015 right away. Remaining you can switch after 1 year.
      Do note exit load structure can vary across schemes.

  5. I was investing in regular funds through SIPs. I would like to switch to direct mode from now on for fresh investments.

    How does it help if I switch existing (regular)funds to direct mode?

    1. Deepesh Raghaw

      Stop SIP in regular plan. Start SIP in direct plan of the same scheme.

      It helps very much. Trail commission makes the biggest impact. So, the intermediary does not only make money when you invest but also when you stay invested. Second part affects compounding in a big way.
      The above post is an old post but will give you an idea.

      1. Thanks Deepesh!.
        Will the redemption of units, which is required to switch to direct mode, effect the profitability of the funds?

        1. Deepesh Raghaw

          You are welcome!!!
          If there is no exit load or capital gains tax to be paid, switch to direct is a win-win situation.

  6. Dear Deepesh,

    Thank you for highlighting new fund houses for US and Canada based NRIs.

    I have a question:

    Say, one investor has mutual funds in SIP way in ICICI, SBI, HDFC, UTI and IDFC. These SIPs were started while the investor was in India and the SIPs are still continuing. Now the investor’s status changes to NRI (US-Canada based). Can you please suggest what should he do with these existing funds so that he remains invested legally and also obey FATCA rule.

    As per my knowledge, he should stop ICICI, HDFC and IDFC investment. Am I right? Can he stop SIP in these three funds and invest them in UTI and SBI (as per your post UTI/SBI accepts NRI investor from USA/Canada).

    What should the investor do to update the resident status to NRI?

    Is there a better plan to reshuffle these investments for US/Canada NRI?


    1. Deepesh Raghaw

      Dear Raju,
      You are welcome.
      As I understand, you will be asked to redeem. I am not sure of any latest development in this regard. You can call up respective AMCs and find out.
      Yes, you can start investments in fund houses which accept investments from US based NRIs.
      You will have to update your KYC status as non-resident. Additionally, you will have to link your NRE/NRO account with existing/new folios.
      The method of KYC updation is same (as for new KYC).
      KYC information is centralized. You can’t be resident with a few fund houses and non-resident with others. In any case, if you are NRI as per FEMA, you can’t invest as resident.

      1. Dear Deepesh,

        Thank you so much for your prompt answer.

        Any suggestion about FATCA. What do I need to do about FATCA if I continue to be invested in UTI and SBI?

        Also, do you have any information if any other fund house is getting ready for US/Canada investors?


        1. Dear Raju,
          You are welcome.
          It is better you check with the respective AMCs.
          You will required to provide your Tax residency details etc.
          If you check the CAN registration form, you will find the documents required on pages 3 and 4.
          However, suggest you check with AMCs. That is the best way.
          I have heard about other AMCs but it is not done till it’s done.
          Will update the post as and when that happens.

  7. hi deepesh , recently i started sips in SBI & HDFC and i gave residential status as local(india) & bank account is also normal indian local account.

    now i am an NRI and i want to purchase new funds (l& T) AXIS FUNDS through NRE account. is there any special documents needs to submit.

    and one more query is can i purchase funds trough local bank account(india) & NRE account.

    1. Dear Upendar,
      Once you become NRI, you can update your details and residential status with banks and fund houses.
      You shouldn’t own resident bank accounts. You can open NRE and NRO accounts.
      You will have to get these accounts linked to your MF accounts.
      You can talk to Axis MF. Typically, there is no specific requirement.
      I assume you didn’t move to US or Canada.

  8. Hi Deepesh , I started sips in SBI/Reliance/Sundaram & HDFC and I gave residential status as local(india) & bank account is also normal indian local account.

    Now, I am an NRI(Gulf) and still continued this sip with normal indian account. Now value of this fund around 8-9 lacs and I want to redeem this all investment. So can It is possible to redeem in Normal account or I have covert in NRI status. If I redeem in Normal indian account what will happen?????

    1. Dear Nilesh,
      Technically, you can redeem. AMC or the bank cannot guess your residential status. So, you won’t face any issues.
      You will get the money in your savings account.
      However, please understand it is not correct on your part to continue as resident with banks and AMCs after you have become NRI.
      It is violation of FEMA.
      If you need funds urgently, then you can redeem in your savings account. Subsequently,you can update residential status with bank ad AMC.
      If there is no emergency, you can update your status with AMC and the bank. Convert savings account to NRO. Link NRO account to the AMC account. Redeem units subsequently. Do it the right way.

  9. Thank you Deepesh for valuable information,
    My agent said it is very difficult and long process to change status from normal to NRI. Really it is true??.
    Also I want to know entry and exit load are same for normal account and NRI account
    I heard for NRI account, when anyone redeem investment 30% amount directly cut from account. Is it true??

    1. Hi Nileshh,
      The process may be difficult and long but it has to be done. If you are NRI, banks and AMCs must know that. You are in violation of FEMA if you hide this information from banks.
      Exit load and taxation is same for NRIs and residents.
      TDS is deducted at maximum possible rate for NRIs. For short term gains on equity, TDS will be at 15% while it will be 30% for short term gains on debt funds. Long term capital gains on equity funds are exempt from tax. Hence, no TDS deduction for such cases.
      Btw, if excess tax has been deducted, you can claim back at the time of filing income tax returns.

  10. Hi Deepesh,

    Thank you for the clarity in your article. I have a few questions which I would like to clarify. As an NRI residing in Netherlands, I am interested in starting SIP MF investments in India with a deposit of 10,000INR. Can you pls elaborate on-

    1. If the funds are deposited from both NRE & NRO account, am I still looking to pay TDS on investment amount?

    2. Is there tax liability on investments every year even if the investment is unrealised? (I am looking at long term investment scenario)

    3. Is there a benefit in having a local resident as joint account holder (my mother, for example) for tax purposes?

    4. Is it possible to open account with MFU while being abroad?

    5. Finally, are the online portals like regulated by SEBI/Indian financial authorities?

    Thank you in advance for your time.

    Best regards,

    1. Hi,
      1. TDS is a harsh reality for NRI investors. In case MF, TDS is deducted at the time of redemption of units. Does not matter that you are investing from NRE/NRO accounts.
      2. In India, tax liability is only on realised gains. You have to check tax laws in Netherlands.
      3. No
      4. Yes. Easier if you are already KYC compliant. Otherwise you will have to run around a bit.
      5. Can’t comment about specific websites. SEBI can question them. However, don’t expect SEBI to keep an eye on them. Btw, this site will get you invested in regular plans.

      1. Dear Deepesh,

        Thank you for your prompt reply. A further question in response to your reply on the TDS charge. Long term does the net gain on investment after TDS beat inflation and make a profit? If yes by how much?

        Thank you!


        1. Thanks Disha!!!
          Long term is subjective. For me, it is 10 years. Income Tax Act defines it quite crisply but that only pertains to taxation.
          What should matter more is the investment horizon.
          I believe equity investments should do well over the long term and beat inflation. Nothing is certain though.

  11. Dear Deepesh,

    I live in USA since 10 years and i am planing to Invest in Indian Stocks from Nov 2016 Onward and already had HDFC mutual fund growth option around 10 Lak using NRE Account.

    1. Can I invest Indian STOCK now instead of Mutual funds? ( Already submitted KYC forms in India and I informed US in the TAX file return also submitted FABR every year.)
    2. What are the forms need to submit India/USA ?

    3. Please list Mutual funds we can invest India ?

    Thanks in Advance !!!


    1. Dear Bala,
      I am not sure if HDFC MF is aware that you reside in US. HDFC MF does not accept investments from US persons.
      1. Yes, you can. Suggest you go through the following post.
      2. Please check with banks/brokerage house/AMCs. They will provide the exhaustive list.
      3. The list of funds for US persons is provided in the post. You can contact these AMCs.

  12. Dear Mr Deepesh,

    I am staying in Egypt for past 3 years. My KYC is registered in 2013 when I was in India,till date i have not made any investments in Mutual funds / stocks. Whether I can make investments in mutual fund SIP with my existing KYC complaint status (registered when I was in India) in the NRI category now with my NRO bank account? Is it legally allowed? Can you please clarify?

    Thanks in advance.



    1. Dear Sriram,
      As I understand, your KYC was done while you were resident.
      If that’s the case, you will have to update your KYC as non-resident.
      Only subsequently, you will be able to invest.
      You CANNOT invest as resident while you are a non-resident. That will be in violation of FEMA.

  13. Hi Deepesh,

    I am USA based NRI and wanna start SIP in above listed AMU funds. As far as I know, equity are not tax free in USA for foreign investments. My concern is what are the tax rate and does it need to be reported only when NAV units are sold or need to pay taxes on yearly basis ?


    1. Hi Rhushabh,
      Yes, you will have to pay tax in US even though you do not have to pay anything in India.
      Suggest you talk to a local tax advisor. He/she will be able to guide you better.
      Half-baked information in matters of taxation can land you in trouble.
      As I understand ( I am not sure though), even unrealized gains are taxed.
      You can go through the following article on TOI website. Will give you some idea.

  14. I am investing in several mutual funds through SIP in India.Recently i moved to Netherlands for my next job and plan to live here for long term. Can i continue the existing funds or I have to stop them all and reinvest as a NRI??

    1. You can change your status to KYC and continue investing.
      You can invest in the same funds. There is no need to exit existing investments.

  15. I am a NRI residing in UAE which has DTA with India but has has no income tax on Expats. While trying to invest in Indian Mutual funds I was trying to fill up the form and came across a declaration

    Are you a tax resident in any country other than India?*
    Yes No
    what do I say here in my case as I am in UAE with no income tax?

    then they ask to fill the tax id number as per above status?
    what does one do here?

    will appreciate you to throw some light on the same for all the countries who do not have a income tax?

    Thanks and Regards,

    1. Dear V.Phadte,

      I’m based in UAE and while investing in MF in India I had filled the following in the forms as part of FATCA

      Q1. Tax Resident : Yes
      Q2. Tax ID # : Not Applicable (Appended self declaration with form that Tax Identification Number(TIN) is not applicable as there is not tax in UAE)

      This was inline considering I was declaring in the form that I’m NRI based in UAE. SBI, Birla Sun Life (BSL) AMC’s have their offices in Dubai you can also check with them.


  16. Hi deepesh ji, one of my friends is working for Singapore based merchantile navy company as a chief officer. He had NRI status, but he didn’t had any address proof in abroad. He had both NRI & NRE bank accounts. Plz tell me what documentation he need to submit kyc and thru which account he need to invest

    1. Dear Arun ji,
      I am not verse with operational matters beyond a point.
      Suggest you get in touch with the AMC itself. You will get much better guidance.

        1. Dear Arun,
          US NRIs face many problems.
          As I understand, even AMCs that permit US persons to invest impose a few additional conditions.
          I suggest you directly approach AMCs (mentioned in the post) and seek clarity.
          At least a few of these will let you invest through SIP mode.

  17. Jainendra singh

    Hi Deepesh,I am using my NRE account for my SIP premium direct debit and would like to change that with my NRO account.Pls let me know if there is any disadvantage of doing that??

    1. Hi Jainendra,
      There is no disadvantage. Investment from NRO will make the money non-repatriable. You will have to transfer amount to NRE account (subject to USD 1 million) per financial year.
      AMC might ask you to open a separate folio to keep your repatriable and non-repatriable units separate.
      Check with respective AMCs. They are quite responsive in such matters.

      1. Jainendra singh

        If investement thru NRO is non repatriable then how would I transfer money to NRE account as mentioned by you.

        1. Dear Jainendra,
          You can repatriate up to USD 1 million per financial year from your NRO account.
          For the exact process, please contact your bank.

  18. Pl suggest me i am investing in mutual fund sip is it taxable for me in us ?or not .if i redeem it later or not redeem the amount.

    1. Dear Rahul,
      SIP is merely a way to invest in MF.
      Capital gains tax liability arises only at the time of sale (redemption) of MF units.

  19. Hi, i buy listed shares for long term (more than 1 yr). recently i hav changed my status to nri, there fore as far as i knw that i need to convert my resident savinga account to nro. my question is that does demat account is also needs to be convert to nro ? or only bank account needs to be converted ?

  20. Hi Deepesh et al,
    Thank for sharing valuable information. I am US based NRI and it seems too many complexities for US based NRI group.

    It would be really helpful if some one from USA NRI community explain how they file their taxes in USA after investing in mutual funds? What IRS forms were filled by them to include foreign investment?

    What was tax rate applied by IRS in unrealized mutual funds gains on yearly basis?

    If we are paying taxes in USA, do we need pay it again in India? If tax rate is high in US for mutual funds, is mutual fund still a good way for investment for long term?

    Kindly advise, thanks in advance.


    1. Dear Raunak,
      I understand your concern.
      Unfortunately, I do not know anyone based in US who can help in this matter.
      Suggest you contact a local tax consultant. He/she shall be able to guide you much better.
      About taxation in India, Indian Government does not tax foreign income of NRIs.

  21. Dear Sir,

    I am regularly investing in mutual fund through SIP from last two years.
    through Kotak securities treading account auto debit services.
    Can I continuously invest in the same fund through SIP or not.
    or I have to with drawn my earlier investment and start new SIP through NRI


  22. Hi,
    I am a US based NRI looking for online platforms to invest my money in indian markets through MFs. I have been in touch with an online startup distributor for investing in MFs as a US tax paying resident. Apparently, due to FATCA regulations there were some restrictions in investing in AMCs but a few FATCA compliant AMCs started to take investments from US NRIs, turns out that in a very recent move there is a blanket level restrictions by all AMCs to invest via the online channel for all US/Canada based tax residents.

    As a matter of fact, this is what ICICI direct mentioned to my distributor – “With reference to your e-mail, this is to inform you that as per the business requirement (in light of the SEC regulation) and post approval from the compliance team, it has been decided that NRI investors residing in the countries like USA and Canada should be restricted from investing in all the Mutual Fund schemes across all Asset Management Companies(AMC) on our online portal.”

    Looks like there is a blanket level restriction for investments done on online portals, however, some AMCs might be ready to accept offline investments via cheques. What is frustrating is that no business journalists are covering this story and raising it as an issue in Indian media.

    Given your network in the industry, could you find out if this is really the case? and If so, does Demonitization have something to do with it?


      1. So do you want to edit your article and mention about this blanket restriction that has been applied for US NRIs on online investments into MFs. I just want to make sure that the articles online provide correct information so that people like me are not running door to door figuring out a way to achieve this. Unless you disagree with me factually. If so, please let me know a way to invest online. Thanks!

        1. Dear TK,
          There is no blanket restriction. Each AMC has a different rule. And the rules are ever-changing.
          Drop e-mail to AMCs where you want to invest and clarify with them. Does not take much time.
          And yes, be prepared to fight it out a bit.

          1. Thanks for your prompt replies, much appreciated. I will research further, however, I don’t want to sound hostile but you might want to double check your facts unless you are absolutely sure about latest developments. Here is another reply I got from BharosaClub (started by ex pay pal founder) just a few hours ago.

            “Currently for an investor residing in US/Canada, the choice of AMCs in which you can invest is limited. In addition, the only way you can invest is by signing a paper declaration every time you do a transaction.

            US/Canadian citizens residing in India however do not have these restrictions.”

          2. Sure. Appreciate your input.
            I do not write unsubstantiated articles but please understand I have limited resources, which can be a constraint when the space is rapidly evolving.

  23. I am an UK Based NRI and would like to invest in Indian MF schemes through SIP.. through which type of bank account it is suitable to invest from NRE or NRO ??what is the difference in the two ?? secondly would also like to know if I can make by younger brother based in India as my 2nd applicant.on either or survivor basis.. ?

    1. Better you do it from NRE account. Funds will maintain repatriable status.
      Yes, you can invest with your brother as second holder.

      1. I understand that rupees can’t be deposited into NRE account. If I open SIP through NRE account and exit later, how will the reedemed INR amount go into NRE account? Will there be foreign conversion charges? If yes, is it not good to open SIP through NRO instead of NRE?

          1. Hi Deepesh,

            Above website & many other sites says we can’t deposit rupees in NRE account. If I invest in SIP in rupees through NRE account and when I redeem from SIP, how does the money in rupees come back to NRE account? Sorry, might be basic stuff but I’m confused. Please let me know.

          2. There are restrictions on what can be deposited in NRE accounts. In case of MF investments, the investments that you make from your NRE account can be deposited to your NRE account (on redemption).
            On redemption, the money will come to your NRE account.

  24. A NRI has an old savings account in India. He has certain amount in that account. Can he invest through savings bank account. His kyc is as an NRI

    1. Dear Gaurav,
      A NRI should not hold savings account. It has to be converted to NRO.
      The investments must be made from NRE/NRO accounts.

  25. Hi Deepesh,

    I have a question.

    For example, if I have invested in SIP for 20 years and from my NRO account and during the time of redemption I came back to India as an Indian resident status. Assume, that I have gained around 1 crore (more than my principal investment) and as TDS Indian IT has deducted 20 lakhs as TAX.

    Now, in your replies to others, you mentioned that the deducted TAX can be claimed at the time of returns. Can you give a small glimpse of investments which can be done during the year of redemption or during the duration of SIP investment which could allow us to claim the returns of worth 20 lakh?

    Here, the number 20 lakh is not important, but as we are investing for a long duration in SIP, the taxable gain at that time of redemption will be very high. How one can be able to maximize the tax returns at that time?

    1. Hi Raghu,
      TDS will be deducted if there is potential tax liability.
      And if excess TDS has been deducted, you can claim it back.
      If TDS is in line with what you have to pay, you wouldn’t get anything back.
      Additional aspect to consider is tax laws in your country of residence. That can really complicate matters.
      Suggest you consult a Chartered Accountant.

  26. Hi, I am NRI based in Australia. I am KYC compliant and keen to invest in mutual funds cost effectively and online. Can you please advise what is my best option. Thanks in advance! Sandeep

    1. You can invest through AMC website or through various MF websites such as MF Utility that let you invest in direct plans.
      By the way, MFU is not the only portal through which you can invest online. There are many more.

  27. I already haven a PAN card, but my PAN card is not KYC approved. I got the PAN card online. How can I get it KYC approved so I can then get other formalities completed. I have a Bank of Baroda NRE and NRO account. I live in Thailand.

    1. Deepesh Raghaw

      Hi Nikhil,
      You need to complete KYC before investing.
      The process is described in the post. Just that KYC forms have changed. You can download CKYC form and follow the same process.
      You will have to run around a bit.
      If you plan to visit India in the near future, you can complete KYC here too.

      1. So, if I understand it right, even if my PAN card is not KYC approved, I only need to fill the CKYC form and follow the steps you’ve mentioned above? I will be in India for 10 days in April. Will 10 days be enough for me to get CKYC registered? Also, after getting CKYC registered, will I be able to invest directly with any AMC? Thank you.

  28. Hi Deepesh, i recently came across your post and i am finding it very helpful. thanks for sharing. Can you help with below query –

    I already bought few MFs being an NRI living in India, which do not allow NRIs to purchase their funds. I also bought one Stock which i think i am not allowed to buy.

    I am worried now as i was not aware that an NRI cannot buy any Indian MF/stock. And it is a FEMA violation. Please provide information on what can i do now. thanks a lot in advance.

  29. Sorry for the typo earlier.

    I already bought few MFs being an NRI living in USA, which do not allow NRIs to purchase their funds. I also bought one Stock which i think i am not allowed to buy(per RBI site).

    I am worried now that i was not aware that an NRI cannot buy any Indian MF/stock. And what i did is a FEMA violation. Please provide information on what can i do now. thanks a lot in advance.

    1. Deepesh Raghaw

      Dear Arijit,
      There are a few limitations. However, that does not mean US based NRIs can’t invest in mutual funds or stocks in India.
      Not sure if it is a FEMA violation.
      If you are sure you can’t own those investments, sell the investments.

  30. Dear Deepesh,

    I have an existing Demat account with Resident Status and I do have stocks and MFs in the same.

    Recently I opened another demat account with NRE status.

    Do I need to convert my resident demat to NRO status??

    Is there any problem if I continue investing in both resident as well as NRE demat accounts?

    1. Dear Rajnikant,
      You can’t own resident and non-resident accounts at the same time.
      If you are NRI as per FEMA, convert resident accounts to non-resident accounts.

      1. Dear Deepesh

        Thanks for your reply…

        If I convert my resident demat account into NRO then I will be having two demat accounts (One is NRE PIS & NRO NON PIS) and both will have different brokerage houses

        Can I hold two Demat account simultaneously (NRE PIS & NRO NON PIS)?

  31. Vasundhara Patil

    My daughter in laws has only pan card has new name..Rest everything in maiden name. She is an NRI. How she can invest in MF in India.


    Hello Sir.

    I am a 29 years old based in Dubai living with my wife. I have realized after your articles that I have not been very wise with my investment till now and seek your advice.

    I have a property in Mumbai with loan paid off, have a sufficient term life cover and health insurance. I have approx. 30L invested in FD as it is tax free for NRI. I would like to invest approx..60000 INR per month into equity/MFs which I may have to decrease later as family expands or I return back to India.
    I do not have specific goal as of now but want to build wealth over the next 15 years with moderate risks. My plans are to create a portfolio with 50% in large cap, 30% in Mid cap and 20% in debt funds. Is this good approach? Please guide on below options:

    • Large Cap: Icici Top 100 Or Birla Sunlife Frontline Equity
    • MidCap/Small Cap: DSP BR Micro Cap fund OR Mirae Bluechip funds

    I also want to move some of my FD money into capital market as well, please guide.
    Do you give personal advice as ell, if yes, how to get in touch with you and what are your charges and interests?


  33. Dear Sir,
    I am an NRI for the last 15 years and i am an active sip mutual fund investor from my NRE account. I have some fixed investment in primary cooperative societies and i would like reduce those investment gradually by cancel those investment not more than 2.5 Lack in a year due to income tax issue may occur in future.
    Now i want to deposit these amount, not more than 20,000 to 30000 in a month, in my NRO account and then start Mutual fund sip from my NRO account.
    By doing this, i dont have to use my NRE fund for mutual fund investment and at the same time i can convert my resident amount into mutual fund legally that eventually reduce my liabilty to pay income tax for resident amount.

    What is ur opinion about aforesaid investment idea. Will it workout ?

    I am a longterm investor (more than one year) and so i dont think any problem even if i make sip from NRO account.

    Is there any Tax liablity if do investment from NRO account instead of NRE ?

    I look forward to hear from you soon,

    Thanks in advance.


  34. 1.Is it true that buying mutual fund from a NRE account is costlier than normal savings account?
    2.If I wanna invest direct in AMC site(mannual SIP;MSIP),can I have any bank savings account or only some saving account do the purpose.

    1. Deepesh Raghaw

      Hi Siddhartha,
      Please understand if you are a NRI, you cannot hold resident savings account. Therefore, it is not a question of choice.
      If you want to invest in MFs as NRI, you need NRO or NRE account.
      1. No. That is for stock trading. There is no difference for mutual funds
      2. I am not sure if I got your question right. What are other types of savings accounts?

  35. I am an NRI living in USA since 2010. I had mutual funds and shares investments before I became NRI. I continued the SIPs through my normal savings account linked to these Mutual Funds.
    1. Should I redeem the same or transfer the normal savings accounts to NRE/NRO account and inform the mutual funds of my NRI status?
    2. Should I convert the same to NRE account or NRO account. The redemption amount can be deposited in NRE or NRO account? As your article stated income in inr cannot be deposited in NRE account, please confirm which account to open.
    3. As FATCA declaration is to be given by 30th April , what should be the steps I should take immediately.

    1. Deepesh Raghaw

      Dear Sayali,
      You shouldn’t holding a resident savings account after you became NRI. It is not permitted under FEMA.
      Clearly, you need to inform mutual fund houses of your status.
      You need to give declaration. Contact AMCs. They will guide you better.
      Most AMCs don’t accept investments from US based NRIs. So, that will be a problem too.

  36. Hi, I am a USA based NRI and I have my KYC registered with CDSL (CVL KRA). Is this KYC enough or do I need to register my KYC at more places (NDML KRA, DOTEX KRA etc.) if I want to invest in multiple mutual funds from different fund houses like ICICI, HDFC etc?

    1. Deepesh Raghaw

      Hi Sridhar,
      Single with a single entity is enough.
      Being a US based NRI, you will face other problems. Do find out about PFIC reporting too.

  37. Chetan Sharma

    Hi Deepesh,

    Thank you for the informative article.

    I have moved to a Gulf country around 4 months back. Before moving, I was investing in monthly sip in India for a fund having 3 year lock in. (And I still continue to)

    My bank account through which amount is regularly deducted has been changed to NRO status and I have around 1 and half years lock in period left.

    Please advice if I should continue by sip installments through the same account or whether I should stop the current folio and start the same from NRE account. Is there any tax effect on NRO account in these circumstances.

    Thank you in advance.


    1. Deepesh Raghaw

      Hi Chetan,
      You need to update your status with AMCs too.
      Essentially, you need to redo KYC as non-resident.
      You folios etc. will be same as before. No action required on that front.
      Lock-in is with the investment (and not the process i.e. SIP).
      As NRI, there can be TDS implication at the time of redemption.
      Suggest you go through the following posts.

  38. HI Deepesh,
    I seek your advise. I am New zealand resident holding NRE account in India.I want to invest both in mutual funds and share trading in India.My questions are:
    1. What is the simple way to start buying mutual funds if I have NRE account with Axis bank in India.
    2. About the profit, but confused, that is taxable or non taxable?
    3. Can I direct buy mutual funds from SBIMF or any company mutual fund website?

    Looking forward to your reply.

    1. Hi Simran,
      Are you KYC compliant? You will need to finish KYC before investing in MFs in India.
      Are you an Indian citizen?
      2. Tax laws are same for residents and non-residents (including foreign nationals and that includes OCIs).
      There will be additional TDS implications for you.
      Additionally, there may be some liability due to tax laws in New Zealand (I can’t comment on that).
      3. Yes, once you are KYC compliant. You can do that.

  39. Hi Dipesh
    I was working in KSA for 3 yrs and now I am Resident Indian my mutual funds subscription is through the NRE account so is it required to change from NRE to normal savings account ?? And what are the disadvantages in terms of tax subject while changing the account status

    1. Hi Hitesh,
      It is not a question of choice. If you are a resident now, convert your NRE accounts to resident.
      Mutual fund investments should also be as resident.

  40. Rambabu Munjuluri

    Hello Deepesh,

    I want to invest in Mutual Funds in India. However, I am trying to figure out the right way, proper channels to do this.

    The reason being, I am an Overseas Citizen of India (OCI), holding a US passport, but have relocated to Bangalore over 3 years ago. I do file my taxes in India and the US and have a job in India. I do have a PAN card and an Aadhaar Card for proof of address. And have updated my e-KYC. with the details.

    I cannot seem to get a Mutual Fund company tell be the right documentation/procedure to go through so that I can invest the right way. I do have a salary account with a Bank and had to close my NRE account as I cannot have that account due to my tax resident status. My other savings account appears to be flagged as NRO acccount on the label/name.

    So, do I need to file my FATCA with every mutual fund house I would like to open an account with?
    Can I link my NRO account AND my Salary account to a mutual fund?
    Can I setup SIP with my account?

    I really appreciate your assistance here.

    1. Hi Rambabu,
      Very few AMCs will accept investments from you since you are a US Citizen.
      You can contact ICICI Pru MF for the right procedure (since they accept investments). Do proper KYC.
      Since you have moved back to India, shouldn’t you not be holding NRO accounts?
      FATCA, you can do with CAMS and Karvy and you should be good.
      Yes, you can set up SIPs.
      Btw, whether you can hold NRE or NRO accounts is not decided as per Income Tax Act (tax resident status) but as per FEMA.

  41. My son and Daughter in Law are Australian citizens and want to start SIP in Indian mutual funds. What to do as KYC will require Adhar and PAN card which is not available as they are NRI. What to do for SIP from NRE a/c.?

  42. Sir,I am a UK customer and want to invest in mf in India so we’re can I find my tin number for fatca nino acceptable instead of tin

    1. Hi Amit,
      TIN stands for tax identification number (just like PAN in India).
      Don’t you have such a number in UK?

  43. hi,
    I am looking for some information on Mutual Funds purchase on re-patriable basis.

    I am an NRI and hold NRE and NRO accounts. I already have many mutual funds purchased with my Demat account linked to NRO bank account and I understand those will be non-repatriable basis.

    However I want to purchase MF direct plans from my NRE bank account so that they are repatriable.
    I understand one way of doing that is to open a new demat account linked to my NRE account but I don’t want to open another demat account due to multiple charges related to it and no option for direct plan purchase.

    In one of your blogs, you have described the process of getting CAN via

    I have few queries related to it.

    1. Is MF folio linked to bank account so that redeem amount gets credited to the same account?
    2. After automatic consolidation of all folios under CAN, will it redeem amount for MF to respective bank accounts?

    Basically I want separation of folios based on repatriable and non-repatriable basis and facility to purchase Direct plans from my NRE bank account while continuing purchase from NRO demat account.

    1. Hi Upendra,
      Thanks for posting your query as a comment.
      Think there is absolutely no need to worry.
      Your repatriable and non-repatriable MF investments are never mixed. This is to avoid any kind of confusion later.
      Banks face a much bigger compliance problem if they credit the wrong account.

      For instance, you have NRO and NRE demat accounts.
      Similarly, in MFU, you have to open two CANs (one for NRO investments, one for NRE). Of course you can choose to open just one depending upon your need.
      NRO-CAN is linked to your NRO account and NRE-CAN is linked to your NRE account.
      You can choose the account where your redemption proceeds should go.
      Clearly, proceeds from NRO-CAN can go to only NRO accounts(and NRE-CAN to NRE).

      The accounts that you link with CAN automatically get linked to MF folios.


    Dear Deepesh ,

    I ‘m holding an NRI status and my wife moved to India as resident due to kids education. We are deciding to put around 20 lakh money in mutual fund. She is house wife and we have no other source of income in India. Does it make sense to transfer the money in her account and buy the mutual fund on her name due to tax implication on NRI? or should I use my NRE account for purchase ? Which option you advise?

    1. Hi Avanish,
      Tax treatment for residents and NRIs is similar. Just that NRIs are subject to TDS implications.
      Set off against the tax exemption limit may not be available in some cases.
      Suggest you go through the following posts.
      Therefore, if the intent is to invest for the long term in equities, it does not matter.
      However, technically, you can do that. There is no issue.
      Just that clubbing provisions will apply since you are the source of income. Therefore, you don’t really avoid any tax. You just avoid TDS complications.
      Suggest you go through the following post.


        I understand clubbing provision would be applicable in case of spouse but I can invest by transferring in name of my mother.
        Dear Deepesh,
        My mother is 70 years . What if I open a demat and trading account and invest in direct mutual funds /shares through her and suppose she does not survive after 3-4 years can I continue to invest in her investment if I am the nominee or should I have to close the accounts.

        Similarly if gift my mother money and she does 5 year FD with me as nominee . Will the FD break when in case of her demise or it will expire only on maturity.

        1. Dear Avanish,
          Since the passage of Benami Transactions Amendment Act in 2016, things have become a bit murky when it comes to investing in the name of parents.
          Such transactions can be challenged.
          Investments can’t be continued in the name of the deceased.

  45. hII Deepesh,

    I am NRE holder as live in Saudi Arabia. I would like to invest in MF i.e. Axis MF in new NFO.
    Saudi arabia is non-taxable country .

    question :
    1) Can i invest through my NRE account ?
    2) what should i have to fill in column of Taxable ID / Country / Taxation number ?
    3) Is i need to open PIS account. As i read many blog say if u want to invest in indian stock market- you need to open PIS account> is it applicable to MF buying as well >
    4) Return must be in NRE i belive which is non taxable for LTCG, right ? justs invest and forget for 10 yrs.
    5) is any limit for NRE exempt from Tax during redemption.

    wait for your reply,

    1. Hi Rocky,
      One of the readers “Pranav” addressed this query in a comment last year.
      Suggest you search for Pranav on this page.
      Copying his response.
      Resident : Yes
      Tax ID # : Not Applicable (Appended self declaration with form that Tax Identification Number(TIN) is not applicable as there is not tax in UAE)

      1. Yes, you can invest from NRE accounts.
      2. As answered by Pranav.
      3. LTCG on equity funds is exempt from tax. It is same for residents and non-residents.
      4. No such restriction

  46. hi

    Why axis mutual fund euin certified person is not allowed to sell mutual fund to US nri customers.

    Even other amc funds to

    Please tell what was the reason behind axis amc related to us and canada

    1. If Axis is not accepting investments from US based NRI, then intermediaries can’t do anything.
      Not accepting due FATCA and SEC compliance issues.

  47. Hi Deepesh,
    I am curious to invest in MF via SIP. I am an NRI in Europe. First I want to do eKYC. For this I just need to fill the ‘KYC Application Form for individual’ of CAMSKRA and get it signed (in section 9 of form) by Notray in Europe. I think getting sign by Notray is IPV and KYC verification carried out by and IPV. So this form together with attested (by same Notray) copy of Passport, PAN, Aadhaar, Europe address proof should be send to the office in Chennai (No.178/10 Kodambakkam High Road Ground floor, Opp. Hotel Palmgrove, Nungambakkam,). Also is it necessary to send also FATCA CRS form.? I just want to know what ever I said above is correct? Is that okay? Did I miss anything here? So after submitting what will happen? Will get any details letters, to my address in Europe/Germany?
    Thanks ,Raj.

    1. Hi Raj,
      Seems fine to me.
      Suggest you talk to CAMS once and see if they want other documents too.
      Frankly, it is better that you contact a fund house and then provide them these documents.
      These guys have greater incentive to collect and chase your application.

      1. Hi Deepesh,
        Thanks for your speedy reply. In the FATCA CRS form what should I mention in ‘Is your Country of Tax Residency other than India’…. Is it Yes or No?. I am working in Germany, and still holds Indian nationality.
        Cheers, Raj.

          1. Hello Deepesh,
            Thanks..I think I also have to write the eTIN number (tax number provided in Germany)..Do you think that submitting my kyc application via post from Germany will workout? I dont have any indian mobile number.

          2. Hi Deeesh,
            I just found where I can submit eKYC and waiting for the result. It is very convenient. No need of any paper, and everything was paperless. One should have every document self attested.. or a laptop with a webcam.
            Regards, Raj

          3. Thanks Raj for this information.
            AM sure many readers will benefit from this information.
            As I understand, this facility is only available for residents, right?
            Did you do eKYC as an NRI?

          4. Hi Deepesh,
            E-KYC through self IPV facility is for all including NRIs (not for US/Canada NRI I guess). But more information are there in that site. Yes, I am NRI in Germany and I completed E-KYC. It is absolutely paperless. No self attestation also. I just need to show my original PAN, passport (address & photo page), my face (selfie), NRI address proof in front of the laptop camera and click capture. Aadhaar is not required, but I submitted that too. For signature, just sign and show to camera. I should also upload a 30 second video of me (funny). It takes 30 days to know the result. Till that time one can invest less than 50k,
            Cheers, Raj

          5. Thanks Raj!!!
            Really appreciate this piece of information.
            I am sure many others will benefit from your experience.

  48. Hi deepesh,

    I am highly intrested on your artical.

    Please latme know bellow things

    I am investing in MF SIP last 4 years and using saving account as an residense indian but i am holding indian passport and working in UAE i have also NRE Acount.

    I was tryed to invest throu NRE account but PFA said it is not accepted by AMC so go thru normle saving acount and till it is countinue.

    I planing to invest direct mutual funds becous i lose tomuch money as A PFA commission. Last 4 years i invested almost 30Lakh.

    My gole is almost till 12 years

    Please late me know what i have to do and how.

    And it is possible to invest direct MF Throu PFA (PERSONAL FINANCIAL ADDVISOR) if he is agrre with this.

    And sujggest me if any good MF for SIP investment for long term gole

    I am waiting for your fevorable reply.

    Thanks and regards

    1. Hi Masani,
      Typically, personal financial advisors don’t let you invest in direct plans. But yes, if he/she is fine, then you can go ahead.
      IF he does not, you can invest on your own.
      Since you are an NRI, you must invest as a non-resident (and not as a resident).
      You can redo KYC as NRI when you visit India next and update this information in all your folios.

  49. Santhosh Donthula

    Hello Deepesh,

    Thanks a lot for your post as it is very informative. However I still have some questions.
    I am a NRI and holding NRE and NRO savings accounts from ICICI bank. I am new to investments and would like to invest only in mutual funds as of now. If I understand correctly, my understanding was following.

    1) I do not need trading account and also demat account if I want to invest in mutual funds. Am I right?
    2) I need to be KYC compliant before I start as I am new to investments.
    3) I can invest from my NRE or NRO funds. But what is the difference in case of mutual funds?
    4) I would like to invest my 75% of investment amount for long term (more than e years) and I can bear some risk as well. Which category of funds (debts, equities, growth etc.) do you suggest in my case as I am first time investor?
    5) In future if I would like to start with equity markets, I would need demand and trading account. But what happens to mutual funds NAV purchased in above steps?
    Can I see them in my demat account?
    6) Do you recommend any alternatives now itself as I surely have some plans to invest in equities or shares as well? I mean what type of accounts are needed in my case.

    Sorry for some basic questions, but i would like to get clear understanding for better start in my case.

    Can you please clarify and thanks in advance.


    1. You are welcome, Santhosh.
      1. You don’t need a demat or trading account to invest in MF.
      2. Yes
      3. You can invest from both. Investments made through NRO will be non-repatriable (limit of repatriation from NRO account will apply). NRE investments are repatriable.
      4. For long term investments, go for equity heavy portfolio. For short term, stick to debt. For NRIs, debt fund investments can be a bit tricky due to TDS implications. You can do with NRE FDs. Suggest you work with a SEBI RIA (please appreciate the conflict of interest in my suggestion).
      5. Direct equity investments require PINS trading and demat account.
      6. Please go through the following post.

  50. Hi Deepesh
    My son has been living in the USA for the past 3 years under H1 B visa (Non Immigrant status).

    He has recently made some Mutual fund investments in India . all the funds are either Equity based or Balanced funds.
    1 is it necessary for him to declare these investments in his tax returns of USA ?
    2. If he is going to keep these investments for 3 years (beyond the lock in period) and redeem, the redemption amount is not taxable in India as it is long term capital gain. Will these gains be taxed in USA as per US law? I understand there is double taxation agreement and he does not have to pay. Kindly clarify

    1. Dear Shivashankar,
      I am not a tax expert.
      However, as I understand, US taxes global income.
      1. Yes
      2. Yes, LTCG in India will be taxed in US. DTAA is to get credit for tax paid in one country. Since India does not tax dividend or LT capital gains from equity, there is no question of tax credit. Taxes will have to be paid in US.
      For US based NRI investing in MF, there is also an issue of PFIC regulations.
      Suggest you ask your son to contact local tax consultant in US.

  51. Hi Deepesh; I am a US based NRI with an NRE account with HDFC. I have invested in equity MF in 2007 via this account. At this time, I would like to redeem the MF and reinvest in another MF. My question is: 1) Can I deposit the INR cheque from the MF in my NRE account (assume not) 2) I can open an NRO account and deposit the MF redemption cheque in there, will there be any TDS implication of this deposit since the MF investment was made 5+ years ago.

    1. Hi Faiyaz,
      HDFC AMC does not accept any fresh investments from US based NRI. As I understand, they will ask to take out the money.
      Did you make the investment through NRE or NRO account?

  52. hi , I am working on the ship and have the NRE account , I had my SIP started before working abroad and it is still going from my normal saving account from india . Now I want to invest lump sum or SIP from my NRE account . Is I can go for that or I be eligible to add the money in the existence plan

    1. Hi Rajesh,
      You can invest in the same scheme. However, now you need to invest as an NRI.
      So, you will have to update KYC and invest.
      Existing folios will be earmarked as NRO folios.
      For new folios, you can invest from your NRE bank accounts.

  53. Hi Deepesh,
    I was working in India , in a PSU. Now I am NRI. My Total annual income in India as follows
    Pension Rs 264000/-
    Interest Income on FDs Rs 290000/-
    My querries
    1. Bank is deductining TDS becoz interest income exceeds Rs 2.5 lacs. Whether I can claim refund for the TDs deducted?
    2. Is there any benefit,If I invest in SIP of Rs 15000/- per year

    1. Hi Mr. Thomas,
      If the total TDS deducted is higher than your tax liability (which looks like the case), you can file for refund.
      Not sure if I got your second question right. Yes, it helps to invest.

  54. sandeep dhillon

    Good day Sir
    I am seafarer having nri status with Nre/Nro bank account in India…how can I apply for mutual fund online…when I am applying as status as Nri then AMC asking overseas address but as seafarer we are not having any address overseas. So I can’t apply for mutual fund. Or I apply as resident Indian?

    1. Hi Sandeep,
      Not too sure of this.
      But I think, for overseas address, you can provide CDC (continuous discharge certificate) card. As I understand, a self-attested photocopy is accepted in lieu of overseas address proof.

  55. Hello Deepesh,

    If a US based NRI, invest in Indian Mutual Funds, where he/she needs to pay taxes, in India or in US ? What if the investment is made directly from US (remittance) vs. via India (NRE account) ?


    1. Deepesh Raghaw

      Hi Vipul,
      This is one serious mess.
      You have to pay taxes at both places. you will get credit for taxes paid in India.
      And this is not it.
      Under US regulations, MF investments in India qualify as PFIC. That makes taxation even more complex in US.
      Do check with your CPA (local tax consultant) before you decide to invest in India via MF route.
      Remittance or NRE investment… does not change anything.

  56. Nallepilli Ramkrishnan

    Hi Deepesh
    I am resident of Canada holding Indian Passport.. Based on the information that some mutual fund allow NRI to invest ,I had a long discussion with SBI mf and all necessary documents were sent for opening a new account. The new account was opened and I started investing on line. . All of a sudden since last 3 months, they do not allow purchase of any further mutual fund scheme and only redeem option was given to me.This is as good as not allowing to open the account. I talked to every one and i was told that i can not do any on line transaction..Similarly, ICICI prudential also confirmed to me that as a canadian resident i am not allowed to open any new folio in ICIC prudential.
    If you have any suggestion regarding this, please let me know.

    Thanks and regards

    1. Dear Mr. Ramkrishnan,
      This is a problem that US and Canada based investors face with MF investments.
      Many AMCs don’t accept investments from such NRIs.
      Even for those AMCs which do, most accept only physical application (along with a declaration).
      As I understand, only Sundaram and L&T accept online.

  57. Hi Deepesh,

    I am a Canadian permanent resident holding Indian nationality. I would like to invest in Indian mutual funds in my mother’s name( mother is an Indian citizen and residing in India)

    1) Can I transfer funds to my mothers savings bank account in India as gift whenever I want?
    2) Can She invest the money I gifted her in mutual funds in her name?
    3) Can she redeem the mutual funds say after 10 years and transfer the proceeds to my a count as gift?

    As a Canadian PR holder most AMCs in India do not accept investments.

    Kindly explain what Can I do to invest in any Amc of my. Voice.

    Thanks & Regards,

  58. Hi Deepesh,

    I am a Canadian permanent resident holding Indian nationality. I would like to invest in Indian mutual funds in my mother’s name( mother is an Indian citizen and residing in India)

    1) Can I transfer funds to my mothers savings bank account in India as gift whenever I want?
    2) Can she invest the money I gifted her in mutual funds in her name?
    3) Can she redeem the mutual funds say after 5-10 years and transfer the proceeds to my account as gift?
    4) Will there be any legal complications in doing so?

    As a Canadian PR holder most AMCs in India do not accept investments and it’s really difficult for us to invest in the funds of our choice due to these limitations.

    Thanks & Regards,

    1. Hi Ajay,
      You can invest in the name of your mother.
      You will have to gift the money to her and then she can invest.
      1. Yes
      2. Yes
      3. Yes (there won’t be any problem in India)
      4. Not in India
      I understand the problems you face.
      Just a couple of points.
      1. Maintain proper documentation (say a gift deed).
      2. Request your mother to file income tax return every year and show gift from you in ITR.
      3. Once you gift the money to your mother, the money belongs to her. She can do whatever she wants with the money. You have no control. In case of a family dispute, you will not get any beneficial treatment in sharing of assets.
      4. Gift from mother to son (or vice versa) is tax-free in India. Since you reside in Canada, you may have to check the local tax laws about receiving gift from your mother.
      Hope this answers your query. Let me know if you have further doubts.

    2. Hi Ajay,

      How are you? Do you mind getting in touch? Actually, I am going through similar string of questions. I would appreciate if I could speak to you on this matter.


  59. N R Ramkrishnan

    Hi Deepesh
    This is Ramkrishnan from Canada. I am NRI. You have mentioned that NRI from Canada can invest in ICICI mutual fund. . I have talked to ICICI number of times but they still they say that Canadian resident and citizens are not allowed to invest.

    The same situation was with SBI mutual fund with little difference. I was informed that i can invest by sending all the documents intially by post. once the folio is created and KYC is done. I can do online transaction.. I did as per their guidance. I also invested and started transacting on line. Just after few transaction on line. it was stopped and now i can not do any transaction on line

    Your guidance will be of great help.


    1. Hi Ramkrishnan,
      This is a constant hassle.
      My latest understanding: ICICI permits only US investors. SBI permits both US and Canada investors.
      Many AMC don’t accept online invests from US based investors.
      Please try L&T.

  60. One can get this done easily via It is quite easy and need minimal effort to get the KYC done as well as through this plat form you can buy direct funds online with no hassle. So far I am able to buy from UTI, L&T, BIRLA, SUNDARM

    1. Hi Rajesh,
      That is one channel that has gone unnoticed till now. Can be plugged anytime.
      L&T and Sundaram anyways allow online.

  61. I called SBI and ICIC both are not accepting online transaction from USA/Canada based NRIs. ICICI told me that I need to be physically present to make Mutual Fund transaction .. Which doesn’t make any sense. SBI simply said they are not accepting.

    1. To be honest, it is a complete mess for US NRIs. Rules are everchanging.
      As far as I know, physical presence is not required but you have to fill paper forms.

  62. Hi Deepesh,
    Thanks a lot for your tremendous help and I am really follower of your knowledge and advisory.
    Question – If a person had been investing in mutual funds through CAN MFU in India while being resident Indian lets say in 6 fund houses for 5 years and becomes NRI for 3 years post which he will return to India. For those 3 years what can be done to hold those mutual funds so that they can grow without any further investment. For this 1a) Does Mutual Fund companies had to be updated to update the resident status in existing folio and 1b) if certain country is not allowed by fund company then holding will also not be allowed and it needs to be redeemed 2) Link existing folios after changing the resident status to new NRI MFU CAN which has NRE/NRO indian bank account linked. 3) Once person comes back folios needs to be changed back to resident indian status and linked to new resident MFU CAN with normal indian bank account.

    Please advise.

    1. Hi Rahul,
      1a) Yes (you need to redo KYC and then update status in MF folios)
      1b) Yes (this is mostly a problem with US and Canada based investors)
      2) Yes. You need to update residential status in the existing portfolios. Once you update residential status, your NRI (or resident) CAN will map those folios too.

  63. Hello sir im serving in defence in india for 10 years resident of nepal and looking for mutul fund investments but how can i invest as nri or indian by govt job holder pls reply

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