Can NRI Invest In SIP In India?

Can NRI Invest in SIP in India?

• NRIs are generally allowed to invest in mutual fund schemes in India, subject to certain guidelines issued by the Reserve Bank of India (RBI) and the Securities and Exchange Board of India (SEBI).
• Most mutual fund companies in India allow NRIs to invest in their schemes through the NRE (Non-Resident External), NRO (Non-Resident Ordinary), or FCNR (Foreign Currency Non-Repatriable) accounts.
• NRIs can invest in SIPs using funds held in their NRE, NRO, or FCNR accounts. The choice of account depends on whether the funds are repatriable (NRE) or non-repatriable (NRO) and the investor's specific requirements.
• Like resident investors, NRIs need to fulfil Know Your Customer (KYC) requirements by submitting certain documents such as passport, overseas address proof, and PAN (Permanent Account Number) card to the mutual fund company or its registrar and transfer agent (RTA) for completing the KYC process.
• NRIs investing in SIPs in India are subject to certain tax implications. Capital gains arising from mutual fund investments are taxed differently for NRIs compared to resident investors.
• Additionally, TDS (Tax Deducted at Source) may be applicable on capital gains and dividend income earned by NRIs, subject to Double Taxation Avoidance Agreements (DTAA) between India and the country of residence of the NRI.
• NRIs investing through NRE accounts can freely repatriate both the principal amount and the returns earned on SIP investments, subject to the prevailing exchange control regulations.
• However, investments made through NRO accounts have restrictions on repatriation.