Certainly! However, there are distinct regulations for Non-Resident Indians (NRIs) residing in the US/Canada compared to those in the rest of the world.
Let's begin by discussing mutual fund investments for NRIs outside the US/Canada:
Non-Resident Indians from other countries can invest in any mutual fund. The initial step involves opening an NRE/NRO account and completing the KYC process.
Differentiating between an NRE and NRO account: An NRE account is tax-exempt, whereas an NRO account is subject to taxation. This implies that funds transferred from a foreign country to an NRE account are not taxed. However, if you earn income in India, you must open an NRO account, and the income will be taxed according to the standard tax slab.
Therefore, an NRE account is utilized for transferring money from abroad to an Indian account, while an NRO account is used for income earned in India.
(Note: Many NRIs mistakenly skip opening NRE/NRO accounts and directly transfer funds to their regular Indian accounts. It's crucial to note that funds transferred to a regular Indian account are considered income and are subject to taxation. This could result in double taxation in both the current country and India.)
Once the account is established and KYC is completed, you can begin investing directly without paying any commission. However, there are limitations for US/Canada NRIs.
They are only permitted to invest in specific mutual funds. Below is the list of eligible funds:
- Birla Sun Life Mutual Fund
- SBI Mutual Fund
- UTI Mutual Fund
- ICICI Prudential Mutual Fund
- DHFL Pramerica Mutual Fund
- L&T Mutual Fund
- PPFAS Mutual Fund
- Sundaram Mutual Fund
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