Q.)Does an NRI / PIO require any approval from the RBI to invest in mutual fund schemes?

Answer-

No, NRIs and PIOs do not require RBI approval to invest in mutual fund schemes. They can directly invest through authorized mutual fund houses in India.

Q.) Can an NRI invest in foreign currency?

Answer-

Yes, NRIs can invest in foreign currency. They can do so through various instruments like foreign currency deposits, foreign currency bonds, and foreign currency mutual funds.

Q.) Will the fund accept an NRI application with an overseas bank account details?

Answer-

Yes, most mutual fund houses in India will accept NRI applications with overseas bank account details. This is usually required for repatriation of funds and tax reporting purposes.

Q.) How will the redemption proceeds be paid?

Answer-

Redemption proceeds from mutual fund investments will typically be paid to the NRI's overseas bank account. This ensures smooth repatriation of funds.

Q.) How can the redemption proceeds be repatriated?

Answer-

Redemption proceeds can be repatriated through authorized banks in India. The process typically involves providing necessary documentation and following the RBI guidelines for repatriation.

Q.) What about redemption proceeds where investments were made on a non-repatriable basis?

Answer-

If an NRI has invested in a mutual fund scheme on a non-repatriable basis, the redemption proceeds cannot be repatriated back to their overseas bank account. These funds will typically need to be utilized within India.

Q.) Can a Power of Attorney Holder (POA) invest on behalf of the NRI investor?

Answer-

Yes, a Power of Attorney Holder (POA) can invest on behalf of the NRI investor. The POA should have specific authorization to make investment decisions and manage the NRI's funds.

Q.) Can a resident Indian have an NRI as nominee?

Answer-

Yes, a resident Indian can have an NRI as nominee for their investments. The nominee will be entitled to receive the proceeds of the investment in case of the investor's demise.

Q.) What are the different types of rupee accounts that are permitted and can be maintained by NRIs?

Answer-

NRIs can open three main types of rupee accounts:

1. Non-Resident External (NRE) Account: For foreign earnings repatriated to India. Interest is tax-free and funds can be easily repatriated.  
2. Non-Resident Ordinary (NRO) Account: For Indian income or foreign income not repatriated. Interest is taxable and repatriation is subject to certain restrictions.  
3. Foreign Currency Non-Resident (FCNR) Account: For foreign currency deposits. Interest is tax-free and funds can be repatriated upon maturity.

Q.) NRE: Non-Resident (External) Rupee Account NRO : Non-Resident (Ordinary) Rupee Account FCNR B : Foreign Currency (Non Resident) Accounts (Banks) What are NRE and NRO accounts?

Answer-

NRE and NRO accounts are bank accounts designed for Non-Resident Indians (NRIs).

NRE (Non-Resident External) account: Used to hold foreign earnings in Indian rupees. Interest earned is tax-free, and the principal and interest are exempt from wealth tax and gift tax.

NRO (Non-Resident Ordinary) account: Used to hold income generated within India, like rental income or dividends. Interest earned is subject to income tax.