NRI Mutual Fund Guide: How to Invest in Indian Mutual Funds
Indian mutual funds offer NRIs a professionally managed, diversified exposure to India's growth story with relatively low minimum investments (₹500/month via SIP). But the compliance landscape has some important nuances — especially for US and Canada-based NRIs.
KYC requirements for NRI mutual fund investors
NRIs must complete KYC through a SEBI-registered KYC Registration Agency (CDSL, Karvy). Required documents: copy of passport, overseas address proof (utility bill or bank statement), Indian PAN card, and a recent photograph. KYC can be completed through platforms like MFCentral, Kuvera, or INDmoney (if they support NRI KYC) or directly with a fund house.
US and Canada NRI restriction
Taxation of NRI mutual fund gains
Equity mutual funds (held 12+ months): LTCG at 12.5% (above ₹1.25 lakh/year). Debt mutual funds (held 36+ months prior to March 2023 amendment): now taxed at slab rate regardless of holding period. TDS is deducted by the fund house at the time of redemption for NRI investors: 12.5% for equity LTCG, 30% for debt gains. File an ITR to reclaim excess TDS.
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