Mutual Fund Switch Letter: Fill & Download for Free

Hi,Thanks for A to AI m assuming you are an NRI and my answer will have that focus in my attempt to help you. For foreign nationals, they can explore India specific mutual funds offered by their local asset management companies. Please note that these country specific funds have a minimum requirement in terms of amount invested. Please check with fund houses before investing:Most US-registered mutual fund companies which have India operations do not accept investments from Indians living in the US as they are bound by the cap on the number of non-resident investors they can take.Regulators in some countries require fund managers to be registered with them if they are handling more than a certain number of accounts of their residents. For example, the Dodd-Frank Act of the US requires fund managers handling over 15 US-based investors to be registered with the US regulators and follow their rules. To avoid dual regulators, many fund houses have stopped taking investors from these countries.For an NRI, one way to invest in the Indian market is to opt for India-specific funds launched by US mutual funds or go for Indian mutual fund houses that allow US-based NRIs to invest in their schemes. However, for millions of NRIs not residing in the US, investing in Indian stock markets or mutual funds is NOT a tough proposition.As an Indian staying overseas, if you want to take advantage of the high growth back home, you can do so by investing in stocks and mutual funds by following some simple steps. But before we go ahead with the procedures for investment, it is important to know who according to Indian law is considered a non-resident Indian.According to the Foreign Exchange Management Act (Fema), 1999, "an NRI is a person resident outside India who is either a citizen of India or a person of Indian origin (PIO)."FEMA further clarifies that a PIO is a foreign citizen of Indian origin residing outside India who has held an Indian passport at any time or who himself or his father or grandfather was a citizen of India.The Income Tax Act further identifies the criteria for availing tax exemptions extended to NRIs.HOW TO GET STARTED?All investments made by NRIs have to be in local currency, that is, the rupee. Mutual funds in India are not allowed to accept investments in foreign currency. For investing in Indian mutual funds, therefore, an NRI needs to open one of the three bank accounts-non-resident external rupee (NRE) account, non-resident ordinary rupee (NRO) account or foreign currency non-resident account (FCNR)-with an Indian bank.An NRE account is a rupee account from which money can be sent back to the country of your residence. The account can be opened with money from abroad or local funds. An NRO account is a non-repatriable rupee account. An FCNR account is similar to the NRE account, except for the fact that the funds are held in a foreign currency.The amount that is to be invested can be directly debited from an NRE/NRO account or received by inward remittances through normal banking channels. An NRI needs to give a rupee cheque or draft from his NRE/NRO account. He can also send a rupee cheque/draft issued by an exchange house abroad drawn on its correspondent bank in India.If the investment is made through cheques or drafts, the investor should attach with the application form a foreign inward remittance certificate (FIRC) or a letter issued by the bank confirming the source of funds.FIRC is a proof of payment received by the individual from outside the country in a foreign currency. It is issued by the bank where you have the account to receive the funds.Other know-your-customer documents such as Permanent Account Number and address proof are also to be submitted, just as in case of resident investors.POWER OF ATTORNEYAfter you have made the initial investments, is it possible for you to keep track of your money and react to market movements that at times may call for additional purchases, switches or redemptions even as you are away?Mutual funds allow a power of attorney (PoA) holder to take these decisions on your behalf. All that the PoA holder needs to do is to submit the original PoA or an attested copy of it to the fund house. The PoA should have signatures of both the NRI and the PoA holder. The PoA holders signature will be verified for processing any transaction.Similarly, an NRI can make a resident Indian his/her nominee in the mutual fund scheme. An NRI can also be the nominee for investments made by a local resident. Fund houses also allow an NRI to have a joint holding with a resident Indian or another NRI in a scheme.HOW TO REDEEM?Redemption proceeds are either paid through cheques or directly credited to the investor's bank account. All earnings will be payable in rupees.As mentioned earlier, investments made through inward remittances or from NRE/FCNR accounts are fully repatriable. Hence, earnings made by redeeming the units or through dividends are fully repatriable.However, in case of investments made through NRO accounts, only the capital appreciation is repatriable, not the principal amount.TAX LIABILITIESWhile tax liabilities of an NRI investing in India are the same as that of a resident investor, tax is deducted at source in case of the former."The key difference between investment rules for NRIs and those for resident Indians in case of both MFs and stocks is tax deduction at source (TDS)," says Rajmohan Krishnan, executive vice president, regional head, North & South, Kotak Wealth Management.But are NRIs subject to double taxation-once in India and again in the country of their residence? It depends on the country of residence. If the Indian government has a avoidance of double taxation treaty (ADTT) with that country, the NRI will be spared from paying tax twice.According to Kavitha Menon, vice president, Wealth Management Group, Parag Parikh Financial Advisory Services, a number of countries have an ADTT with India."To give an example, India has an ADTT with the US. If an NRI based in the US makes short-term capital gains from equity investments in India, he pays 15% tax. However, the rate for such gains is 30% in the US. The investor will need to pay tax only for the difference in rate. This means he gets a deduction on the tax paid in India from his tax payable in the US.EQUITY INVESTMENTSNRIs can invest in Indian stock markets under the portfolio investment scheme (PIS) of the Reserve Bank of India (RBI). Under this scheme, an NRI has to open an NRE/NRO account with an RBI-authorised Indian bank. An individual open only one PIS account for buying and selling stocks.Aggregate investment by NRIs/PIOs cannot exceed 10% of the paid-up capital in an Indian company and a PIS account helps the RBI ensure that the NRI holding in an Indian company does not cross that limit. Each transaction through a PIS account is reported to the RBI.The next step is to open a demat account and a trading account with a Sebi-registered brokerage firm. An NRI cannot transact in India except through a stock broker.NRIs cannot trade shares in India on a non-delivery basis, that is, they can neither do day trading nor short-sell in India. If they buy a stock today, they can only sell it after two days.Short-selling is selling stocks that one doesn't own in expectation that their prices will drop, and buy them back at lower prices.SUBSCRIPTION TO IPOsShares issued through initial public offerings (IPOs) are not covered under he PIS. In case of IPOs, it is the responsibility of the issuing company to inform the RBI the number of shares it is allotting to NRIs.However, NRIs need NRE/NRO accounts to subscribe to IPOs. The shares acquired through IPOs can also be sold without a PIS account. However, NRIs must furnish their bank details, besides the date of allotment and cost of acquisition of the shares to calculate the tax on any gains they may have made.Investing in India's long-term success story is not all that tough after all. All an NRI needs is a right bank account and other documents which even a resident investor will require to submit.As for the avenues where you can invest, please note that some of the things I would like to suggest are as follows:1. Do not invest in sector specific funds. Fluctuations and risk are higher.2. Decide on a fund that has credible past performance and a single asset manager.3. Research on companies which form the portfolio of each of these funds. Study these companies and see their past. How old are the companies in the folio and what does the local consumer think of these companies is crucial to your fund's performance.4. Direct equity trading is not suggested unless you can trust your asset manager since you can't always be available for approvals.5. Fixed deposits and recurring deposits offer barely inflation beating returns. However, you must invest part of your portfolio (depending on your age, the younger you are the more risky investments you can explore). I personally suggest atleast 30% of your folio in safe investments to act as a back up, if the markets were to crash. Trust me, market crashes happen before you can realize they have happened!6. Currently, India is arguably the most lucrative overseas investment options owing to the political stability and the positive market sentiment. A popular leader at the helm has given confidence to investors, domestic and international, retail and institutional, alike.I hope I could help solve your queries.Regards.Source of information: http://www.businesstoday.in/moneytoday/investment/tips-for-nris-to-invest-in-indian-mutual-funds-stock-market/story/18846.html

This post will be a little longer, read till end.No its too less!!! You should sit and cry at corner in house, as you are getting way less than an above average engineer from top institute.Following 3 points validates above statement -1- An engineer who pass out from top IIT/IIM and is ABOVE AVERAGE gets package of 22–23 lakhs considering his age as 22.Considering a hike of 14–15% every year at age of 26 his package should be 42 lakhs and if he switches firm in between it can go to 45+So you are not doing well in your life.2- Now coming to your 36 lakhs, consider average 25% tax you get 27 lakhs or 2.25 lakhs per month. Since you are living in metro for sure you spend 30k in rent, 10k in basic living(telephone/electricity/broadband/petrol expense/insurance/gas bill etc) , remaining 20–30k in monthly shopping like grocery, food, restaurants, clothes , home shopping, cleaning maid, cooking maid etc.Definitely you might be investing in a small 1200sq ft 2bhk house now or later considering 1cr Avg value for 20years loan with downpayment of 20 lakhs you will be paying 80k per month emi. No doubt the possession will be 4-5 years after your booking date.And of course some policies/mutual fund/ you might be investing let's say 30–40kA basic sedan car emi around 15kTravelling to your home by flight 20–30k, 2–3 times in a year average 3k per month.So total expense 30+10+30+80+40 +3k + 15k= 2.08 lakhs per monthAlso your whole savings in mutual fund will go in house downplayent now or laterEffectively you are living a normal life and left with nothing much.There is no luxury in life, just roti/kapda/makaan.3- No money for lavish life :) even though you have no responsibility of your family as of now.A comparison for you, Now just think a life of a 26 year postman who earns 10–15k per month works 7-8 hours a day, lives with his parents, sisters and dada/dadi in his ancestral 4bhk house of about 4000 sq ft in a small village.His father is a farmer who grow crops like wheat, rice etc in his small land.He wakes up at 4am, do some yoga and then go for gardening in his bageecha, ready for job by 8am, takes blessings of his parents, picks lunchbox of delicious food cooked by his mother and delivers letters, riding his non-geared bicycle, to people visiting so many places, meeting new people.He comes back at 4pm , and plays cricket with his locality friends then talks to his family, specially dada/dadi and sleeps at 9pm on the terrace under a sky full of stars.He gets no year end bonus, hike is almost 3–4%On the salary day he bought a sari for his mother and a dhoti for his father and some more plants for his bageecha,rest he gave to some poor people of his village and school.He hardly saves anything as he already has roti/kapda/makaan.He is very fit and healthy guy who has no loans, breathe in fresh air, eats hand picked organic fresh Vegatables from his bageecha, sleeps in his mother's lap,drinks fresh milk of his own cows and everybody in his surrounding knows him and respects him.He has no worry about his retirement as has pension.His life is not driven by lakhs of money but inner peace and satisfaction.Money is just a way to get his basic living which you are also ultimately doing but he is in every way living a better, real and happy life than your materlistic world who wants to quantify how much money is good for a person knowing that there is no limit.So here also, i consider him better than you with an earning of 5% of your salary.I hope by now you might have understood how many lakhs are good enough for a person in life.

Greetings,Certainly, NRIs can invest in mutual funds in India – as long as they adhere to the Foreign Exchange Management Act (FEMA). A mutual fund in your home country can give you a diversified portfolio with the desired mix of debt and equity securities. Even if you are risk-averse and want a fixed income investment avenue, the Indian debt market comes with higher interest rates. You may start with equity funds, debt funds or hybrid funds.How can NRIs benefit from mutual fund investments?As one of the fastest growing economies in the world, Indian economy attracts thousands of investors from abroad. Given below are some of the benefits NRIs can enjoy by investing in Indian mutual funds.a. Easy to manage funds online from anywhereWith the option of investing online, it is easier to track and manage your mutual fund from the residence country too. Investors can buy, redeem, switch as well as opt for systematic transfer or withdrawals online. No need to give cheques, make DDs, fill in physical forms or even be in the same country! You will receive regular account statements (CAS) via email. Asset Management Companies also post portfolio disclosures online to keep investors informed.b. Scope for more profits from rupee appreciationIf the INR value has hiked on the resident country’s currency, it means more profits for the investor. For instance, if an NRI from the UK invests 1000 pounds in a mutual fund in India at an exchange rate of Rs. 100 to 1 pound. Even with possible depreciation, the investor can reap good returns. NRIs and PIOs can also get the same benefits by investing in India-based mutual funds in their own country of residence.3. What is the investment procedure for NRIs in India?Asset Management Companies in India cannot accept investment in foreign currency. For this, the first step is to open an NRO account, NRE account or a Foreign Currency Non-Resident (FCNR) account with an Indian bank. You can invest by any of the below methods.a. Self/DirectOne can carry out transactions, debiting or crediting through normal banking channels. Your application with the required KYC details must indicate that the investment is on a repatriable or non-repatriable basis. KYC documents include a recent photograph, certified copies of PAN card, passport, residence proof (outside India), and bank statement. The bank may require an in-person verification which you can comply by visiting the Indian Embassy in your resident country.b. Via Power of AttorneyAnother easier but common method is to have someone else invest on your behalf. Mutual fund companies allow Power of Attorney (PoA) holders to invest on your behalf and take other decisions pertaining to your investments. However, signatures of both the NRI investor and PoA should be present on the KYC documents to make the investment.Mutual fund regulations for NRIsa. KYC for NRIsTo complete the KYC process, submit a copy of your passport – relevant pages with name, date of birth, photo and address. The current residential proof too is must, whether temporary or permanent. Some fund houses may insist on In-Person Verification too.b. FIRC (Remittance Certificate)If you have made the payment via a cheque or a draft, you must attach a Foreign Inward Remittance Certificate (FIRC) with it. In case, that is not possible, a letter from the bank would also do. This confirms the source of funds.c. RedemptionThe AMC will credit the corpus (investment + gains) you get after fund redemption to your account after deducting taxes. They can also write a cheque for the same. Some banks allow to credit the redemption amount directly to the NRO/NRE account. If you have opted for non-repatriable investment, they can credit the proceeds only to an NRO account.How are NRI mutual fund investors taxed?NRI investors often fear that they will have to pay double tax when they invest in India. Well, that is certainly not the case if India has signed the Double Taxation Avoidance Treaty (DTAA) with the respective country. For instance, India has signed this treaty with the US. Hence, you can claim tax relief in the US, if you have already paid taxes in India.The gains from equity mutual funds are taxable based on the holding period. Short term capital gains attract tax at the rate of 15%. However, Long Term Capital Gains (LTCG), in excess of Rs 1 Lakh, are taxable at the rate of 10%.In case of debt funds, Short Term Capital Gains are taxable at the rate of 30%. Holding the fund for more than three years will result in 20% tax on the gains with indexation benefit. LTCG on non-listed funds will be taxed at 10% without indexation.Which fund houses accept NRI investments?a. SBI Mutual Fundb. Birla Sun Life Mutual Fundc. ICICI Prudential Mutual Fundd. UTI Mutual Funde. HDFC Mutual Fundf. Sundaram Mutual Fundg. DHFL Pramerica Mutual Fundh. PPFAS Mutual Fundi. L&T Mutual FundPoints to remember when investing in Indiaa. Your investment carries the right of repatriation of the amount invested and amount earned, only until you remain an NRI.b. Residential address in the resident country is a mandatory field. Hence, you must also attach an attested proof along with application.c. The compliance requirement is the US and Canada are more stringent as compared to other nations. According to FATCA guidelines, all financial institutions must share the details of financial transactions involving a US person with the US Government.d. Are you a resident of any of the 90 countries that have signed Common Reporting Standard? CRS is a global reporting system to combat tax evasion.In short, NRIs can choose to invest in his/her home country. The process may have some initial hassles. However, in the long run, the return on investment would be worth it. Currently, only eight fund houses accept mutual fund investment from NRIs residing in the US & Canada. So, there is certainly no reason for you to be left out of investing in one of the fastest growing economies.Hope this helps you!!