When Foreigners are Lining up to take advantage of top growing economy of India, Should NRIs not be part of it ?

Investments by NRIs can be made either on a repatriable or non-repatriable basis

As we all knoe foreign portfolio investors consider India as one of the best growing economies and hence attractive from an investment standpoint, NRIs too can benefit from a growing ‘home country economy’ by investing in India. Taking the mutual fund route is one of the best options.
As per the provisions of Foreign Exchange Management Regulations, 2000, NRIs can invest in mutual funds either on a repatriable or non-repatriable basis.
If the amount is invested by inward remittance from overseas through normal banking channels or from NRE/FCNR account of the non-resident investor, then the investments can be repatriated.
Mutual fund schemes can be offered on a non-repatriation basis, if funds for investment are provided by debit to the NRO account of the investor. Funds may also be invested on a non-repatriable basis by inward remittance or by debit to NRE/FCNR account.
An NRI cannot make investments in foreign currency.

Application

A common application form duly completed together with cheques or bank drafts should be submitted at the investor service centres of the fund or the registrar. The NRI can either post or send this form through the approved distributor of the fund with whom they/he/she has been coordinating.

All cheques/demand drafts accompanying the application form must be made in favour of the scheme names and payable at the Indian city where the application is accepted.
The investor may, alternatively, apply for units online if he has completed the KYC, including FATCA. The facility of applying online is available with all the major mutual fund houses.
Local laws in some countries such as the US and Canada restrict investment by their residents. Birla Sunlife, DHFL Pramerica, L&T, PPFAS, SBI, Sundaram and UTI are the only mutual fund houses that have approval to accept investments from people in the US and Canada. It is to be noted that the application process is the same for direct or indirect plans.

Redemption

Redemption proceeds are paid by cheque or credited to the investor’s bank account. The amount is paid to the first unit holder and will be credited to the bank account mentioned in the application.

Redemption proceeds/repurchase price and/or dividend or income earned (if any) will be payable in rupees only.
The investor bears any loss or enjoys gains due to exchange fluctuations, while converting the rupee into any other currency.
The investments shall carry the right of repatriation of capital invested and capital appreciation so long as the investor continues to be a resident outside India.
Transfer of money to the overseas account is done by authorised dealers and banks, not the mutual fund.
The tax liability of the NRI is the same as an Indian Resident. Equity funds are tax-free if sold after one year, while debt funds enjoy long-term capital gains tax if held for at least three years.
 
Adapted from Hindustan Times Article…

1 thought on “Seizing India’s Growth: Why NRIs Shouldn’t Miss Out”

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