An Individual is said to be Resident in India in any previous Year if he satisfies any one of the following basic conditions.

Basic Conditions:
a). Person was in India in the previous year for a period of 182 days or more.
b). Stays in India for at least 365 days during 4 preceding years and 60 days or more in the relevant financial year.

Beside the basic conditions there are two additional conditions.

Additional Conditions:
c). Person has been Resident in India for at least two out of the ten previous years preceding the relevant previous year.
d). Person has been in India for at least 730 days in all during the seven previous years preceding the relevant previous year

Yes, Non-Resident Indians (NRI) and Persons of Indian Origin (PIO) can invest in Indian Mutual Funds on a full repatriation as well as non-repatriation basis.

NRIs need to fulfill all KYC and regulatory requirements before investing in Mutual Funds

A few countries such as US and Canada have restricted investments by NRIs in Mutual Funds without relevant disclosures. Some AMCs do not accept mutual fund applications from NRIs in Canada and the USA.

Yes, NRIs can invest through SIP & opt for both Growth & Dividend options while investing in Mutual Funds in India.

NRIs can choose from three major types of accounts. As an NRI in India, you can open an NRE (Non-Resident External) Account, NRO (Non-Resident Ordinary) Account and FCNR (Foreign Currency Non-Resident) Deposit Account.

An NRE account can be opened by an NRI, Person of Indian Origin (PIO) or a person who has become a non-resident under FEMA. “Important is the redemption proceeds received in NRE/FCNR A/c can be repatriated back to their foreign country.

A Non-Resident Ordinary (NRO) Account is a popular way for many Non-Resident Indians (NRIs) to manage their deposits or income earned in India such as dividends, pension, rent, etc. This account allows you to receive funds in either Indian or foreign currency but cannot be repatriated from NRO A/c.

The Foreign Exchange Management Act (FEMA) is legislation which regulates the inflow and outflow of foreign exchange. The Central Government of India formulated the same to encourage external payments and across the border trades in India.

No

FCNR stands for Foreign Currency Non-Resident Account. This is a kind of fixed deposit account opened for depositing income earned overseas. The account is held in foreign currency.

The account can be opened by Non-Resident Indians (NRI) and Overseas Corporate Bodies (OCB).

a). NRIs need to open NRE, NRO or FCNR A/c with Indian Bank.

b). NRIs need to submit a Mutual Fund Application along with the KYC Documents.

c). KYC documents include latest Photo, attested photocopy of Pan card,Passport, Address proof of Outside India and Bank Statement.

d). NRI investors can select a POA holder to invest in his/her behalf. Signature of Investor and POA holder should be present in the document.

a). NRI investors need to complete the KYC process along with investment proposals.

b). If payment is made by a Cheque or Demand Draft, then Foreign inward remittance certificate or letter from the bank is required.

c). At the time of Redemption TDS is applicable as per highest tax bracket and remaining sale procedure gets credit in Bank A/c. If the investment is non-repatriable investment, then proceeds gets credited to NRO A/c only.

d). NRI can submit an income tax return and get a refund of the excess TDS amount paid.

a). Equity Taxation - 15% on short term and 10% on long term above Rs 1lakh without any indexation.

b). Debt Taxation - Short term gains are as per tax slab of the investor and in the long term for listed schemes is 20% with indexation and for unlisted schemes is 10% without indexation.

For Equity oriented Mutual Fund TDS is deducted at 10% for LTCG and 15% for STCG.

Other than Equity oriented Mutual Fund TDS rate is 30% STCG and for Long Term 20% with indexation and 10% without indexation.

If total Income exceeds 2.5 lakhs, then income tax return needed in India.

India has Double Taxation Avoidance Agreement (DTAA) with more than 90 countries across the globe. So, if NRI residing in a country which has signed DTAA with India, investors can avoid double taxation.

Resident and Ordinarily Resident in India (ROR).

Resident but not Ordinarily Resident in India (RNOR).

Non-Resident (NRI).

An HUF can become NRI provided all the members of coparceners become NRI.

a). Life insurance premium payment.

b). Children’s tuition fee payment.

c). Principal repayments on loan to purchase house property.

d). Unit-Linked Insurance Plan (ULIP).

e). Investments in ELSS

Interest earned in NRE & FCNR A/c is tax-free but interest in NRO A/c is fully taxable in India.

Interest in NRO A/c is subject to TDS without any threshold limit.

NRIs are Indian citizens but residing abroad.

On the other hand, PIOs are foreign citizens (Other than Bangladesh or Pakistan) but once held an Indian passport. If they were born abroad to Indian parents or parents who once held an Indian passport, they would qualify for PIO status, but not for NRI status.