If you are a USA-based NRI and you want to invest in mutual funds in India, this article will give you a clear process on what exactly you will need to follow.
How to invest in mutual funds, will the gains you make be taxable, will I be assured that my investments are done at the right bank, we are here to answer all your questions.
Several Indian fund houses have quit accepting applications from NRI (Non-residential Indians) based out of the United States and Canada- both states, owing to strict and particular protocols and provisions of the Foreign Account Tax Compliance Act (FACTA). Under this act, it aims to prevent tax evasion by both USA citizens and residents who are of Indian origin. This also applies to financial institutions, including mutual funds which must share specific transaction details of the US citizens and residents with their relations with the United States government.
However, if you still not want to invest in a fund house which accepts investments from fund houses which accept investments from Indian citizens across the USA, your main document that you will be needing is to be KYC( Know your customer)- compliant in India and be in India whenever you are interested in investing.
To put this in simpler and understandable terms, investing online is usually prohibited, frowned upon and sometimes even illegal. Nevertheless, while the USA citizens and residents are usually taxed according to their global income, often on rather accrual basis they will still get some sort of relief as the USA has signed a double taxation avoidance treaty with India. This means that Indian citizens will not be double taxed for their incomes based on their race and ethnicity.
Have you purchased an endowment plan for your retirement and now you want to close this policy and invest in premium amount in equity mutual funds instead? First of all, once I gain equity, is this even possible?
Insurance and mutual funds are segments with two whole different objectives. The ideal way to buy a term insurance policy is too also invest in mutual funds. If you close existing plans that you have invested in, there are chances that you will loose all the property of-what you even owned in the first place.
When it comes to retirement, your best option will be to switch from an endowment plan (if that is your current plan which is usually what the common public choose) to mutual funds as mutual funds help build a better groundwork for investments. This will also help increase your investments to build a corpus which is up till your desire.
Keeping all these important advice in mind, it is also important that you are reviewing your portfolio regularly to increase investments.
By Meena Atmakuri
