Mutual Funds – Frequently Asked Questions
Mutual Fund & SIP Guide for NRIs & Residents
Short Answer: A mutual fund pools money from many investors to invest in a diversified portfolio of assets.
Long Answer: Mutual funds are managed by professional fund managers who allocate assets in stocks, bonds, or other securities according to the fund’s objective. They are a popular choice for NRI and resident investors due to ease of diversification, affordability, and professional management.
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Short Answer: Yes, with certain conditions.
Long Answer: NRIs can invest in Indian mutual funds on a repatriable or non-repatriable basis using NRE or NRO accounts. However, investments from certain countries may be restricted due to FATCA regulations, so checking with the fund house beforehand is essential.
Short Answer: PAN card, passport, and NRI bank account details.
Long Answer: You will typically need a valid PAN card, copy of your passport, proof of overseas address, and a completed KYC form. Some AMCs may request an in-person verification or video KYC for compliance.
Short Answer: Tax depends on the type of fund and holding period.
Long Answer: Equity fund gains held for less than 12 months are taxed at 15% (short-term), and those held longer are taxed at 10% for gains above ₹1 lakh (long-term). Debt funds have different tax rates. TDS is deducted at source for NRIs before redemption proceeds are paid.
Short Answer: SIP is usually better for regular investing.
Long Answer: Systematic Investment Plans (SIPs) allow NRIs to invest fixed amounts at regular intervals, reducing market timing risks and building wealth steadily. Lump sum investments may work better during market corrections or when you have surplus funds.
