NRI FAQ's

Can NRIs invest in Mutual Funds? Do they require any special permission from the RBI?

Non Resident Indians and Persons of Indian Origin residing abroad (NRIs) / Foreign Institutional Investors (FIIs) have been granted a general permission by Reserve Bank of India Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000 for investing in / redeeming units of the mutual funds subject to conditions set out in the aforesaid regulations

Are there any specific procedures to be followed for making the investment on a repartiable/non repartiable basis?

PURCHASES BY NRIs/FIIs

Repatriation basis:

Payments by NRIs/FIIs may be made by way of Indian rupee drafts purchased abroad or out of funds held in NRE/FCNR account or by way of cheques drawn on non-resident external accounts payable at par and payable at the cities where the Investor Service Centres are located.

In case of Indian rupee drafts purchased and subscriptions through NRIs/FCNR account, an account debit certificate from the bank issuing the draft confirming the debit should also be enclosed.

Non Repatriation basis:

NRIs investing on a non repatriable basis may do so by issuing cheques/demand drafts drawn on Non-Resident Ordinary (NRO) account payable at the cities where the Investor Service Centres are located.

REDEMPTIONS BY NRIs/FIIs

Payment to NRI/FII Unit holders will be subject to the relevant laws / guidelines of the RBI as are applicable from time to time (subject to deduction of tax at source as applicable).

In the case of NRIs :

1.	Credited only to NRSR account of the NRI investor where the payment for purchase of Units redeemed was made out of funds held in NRSR account or
2.	Credited, at the NRI investor’s option, to his / her NRO or NRSR account, where the payment for the purchase of the Units redeemed was made out of funds held in NRO account or
3.	Remitted abroad or at the NRI investor’s option, credited to his / its NRE / FCNR / NRO / NRSR account, where the Units were purchased on repatriation basis and the payment for the purchase of Units redeemed was made by inward remittance through normal banking channels or out of funds held in NRE / FCNR account.

What are the taxes applicable for income from Mutual Funds for NRIs?

Dividends

Dividends	NRI
Equity schemes	Tax free
Debt schemes	Tax free

Dividend Distribution Tax

Dividend Distribution Tax	NRI
Equity schemes	Nil
Debt schemes	14.163%
With Indexetion	11.33% (10% Tax + 10% Surcharge + 3% Cess)
Without Indexetion	22.66% (20% Tax + 10% Surcharge + 3% Cess)

Short Term Capital Gains Tax	NRI
Equity schemes	17% (15% Tax + 10% Surcharge + 3% Cess)
Debt schemes	33.99% (30% Tax + 10% Surcharge + 3% Cess)

Tax Deducted At Source (Applicable only to NRI Investors)

Tax Deducted At Source	Short term	Long term
Equity	11.33%	NIL
Debt	33.99%	22.66%

Tax Benefits u/s 80 C

The introduction of section 80C, in the Union Budget 2005, has allowed investors to save tax by investing in Equity Linked Savings Scheme (ELSS) schemes on investments upto Rs.1 Lac. and at the same time avail the growth potential of equity markets.

The following table draws a comparison of the investment avenues available under Section 80C

Investment Options	Lock-in Time Period (In Years)	Max Investment for Sec 80C Benefits (Rs.)	% Return (CAGR)	Tax Treatment of interest
ELSS (Mutual Fund Schemes under Equity: Tax Planning Category)	3	1,00,000	49.83 ^*	Dividend and Capital Gains Tax Free
Public Providend Fund (PPF)	15	70,000	8 ^#	Tax Free
National Savings Certificate (NSC)	6	1,00,000	8 ^#	Taxable

* Equity Tax Planning Category average for 3 yrs, Source: Value Research Mutual Fund Performance Report 31 Oct , 2007
# Source: www.indiapost.gov.in/banking.html

Are there any additional services offered by the Mutual Fund?

Yes. NRI’s are allowed access to Birla Sun Life’s Online Portfolio Management System.

This free and 24/7 service allows investors to:

	Track and manage their investment portfolio online
	Transact Online – Additional Purchases, Switches and Redemptions
	Download Account Statement
	Post your queries & requests on email to a relationship manager