A Non Resident Indian (NRI) is a person resident outside India, who is a citizen of India or is a person of Indian origin.
A Person of Indian Origin means a citizen of any country (other than Bangladesh or Pakistan), if:
I. He at any time held an Indian passport; or
II. He or either of his parents or grand parents was a citizen of India; or
III. He is a spouse of an Indian citizen, or of a person referred to in (I) or (II) above.
The three types of rupee accounts permitted, that can be maintained by NRIs are as follows
I. NRE: Non-resident (External) Rupee Accounts,
II. NRO: Non-resident Rupee (Ordinary) Accounts
III. FCNR – B: Foreign Currency (Non –Resident) Accounts (Banks)
Non-Resident (External) Rupee (NRE) account is a rupee account from which funds are freely repatriable. It can be opened with either fund remitted from abroad or local funds maintained in NRE/ FCNR accounts, which can be remitted abroad. The deposits can be used for all legitimate purposes. The balance in the account is freely repatriable.
Non-Resident Ordinary Rupee (NRO) account is a rupee account and can be opened with funds either remitted from abroad or generated in India. The amounts in such an account are non-repatriable. However, funds in NRO accounts can be remitted abroad subject to/as per various directives in force at the time of repatriation.
No approval is required.
Note: With effect 08 Dec 2008 “U S Persons and Persons of Canada” will not be allowed to make any fresh purchase/additional purchase/switches in any scheme of ICICI Prudential Mutual Fund (Please refer addendum dated 04-December 2008 for more details).
An NRI cannot make the investment in foreign currency. He needs to give us a Rupee cheque from his NRE/NRO bank account in India. He may also send a Rupee cheque from abroad payable in a bank in India. However, for an NRI to invest, it is mandatory that he maintains a bank account in India.
As per Section 10(35) of the Income Tax Act, 1961, income received from mutual fund units specified under Section 10(23D) is exempt from income tax in India and the mutual funds are subject to deduction of distribution tax in debt oriented schemes. Hence all dividends are tax-free in the hands of non-resident investors and no TDS is applicable on the same. We request you to consult your investment advisor and/or Tax consultant for further details/ clarification.
TDS Certificates (Form 16A) are dispatched to the investors once in a quarter.
In the case of NRIs, where the investment is made out of inward remittance or from funds held in the NRE/FCNR account of the investor, the maturity proceeds/repurchase price of units (after payment of taxes) may be credited to the NRE/FCNR/NRO account of the non-resident investor.
Where the purchase of units is made on a non-repatriable basis, the maturity proceeds/repurchase price of units (after payment of taxes) will not qualify for repatriation and may be credited to the NRO account of the non-resident investor.
Investments in units purchased in Rupees, where the investor was a resident of India and subsequently becomes a non-resident, will not qualify for repatriation of repurchase proceeds of units.
Investors are advised to contact their banks/tax consultants if they desire remittance of the income distribution on units abroad.
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