1. Who is a Non-Resident Indian (NRI)?
A non-resident Indian (NRI) is an Indian citizen or a person of Indian origin who stays abroad for employment, business or vocation outside India, or stays abroad under circumstances indicating an uncertain duration.
2. Who is a Person of Indian Origin (PIO)?
A Person of Indian Origin means a citizen of any country (other than Bangladesh or Pakistan), if the person: (a) at any time held an Indian passport; or (b) or the person's parents or grandparents were citizens of India.
3. Who is a Foreign Institutional Investor (FII)?
An FII is an institution established or incorporated outside India, which proposes to invest in Indian securities and is registered with SEBI.
4. What are NRE/NRO Accounts?
Non-Resident (External) Rupee (NRE). This is a Rupee account from which funds are freely repatriable. It can be opened with funds remitted from abroad.
Non-Resident Ordinary Rupee (NRO). This is a Rupee account and can be opened with funds generated in India. These funds are non-repatriable.
5. Can an NRI, and FIIs invest in mutual funds in India?
6. Can an NRI invest in foreign currency?
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 accompanied by a bankers certificate indicating the source of Funds. However, for an NRI to invest, it is mandatory that he maintain an NRE/NRO bank account in India.
7. What is the mode of payment for Repatriation and Non-Repatriation Basis?
Repatriable Basis: Payments for the purchase of the units may be made by Indian Rupee drafts purchased abroad (accompanied by a bankers certificate), or by cheques drawn on the NRE Account of the investor, payable at the city where the application form is accepted by any Sundaram Mutual Branch/ SBNPFS TP/ISC
Non-Repatriable Basis: Payments for the purchase of the units may be made by Indian Rupee drafts purchased abroad (accompanied by a bankers certificate), or by cheques/demand drafts drawn on the NRO/account of the investor, payable at the city where the application form is accepted by Sundaram Mutual Branch /SBNPFS TP/ISC
FII Investors: FIIs may pay for their purchases with funds held in a Foreign Currency account or Non-resident Rupee account maintained in a designated branch of an authorised dealer [Clause 3(1) of the Regulations]. Payments may be made by cheques payable at a city where the application is accepted by any Sundaram Mutual Branch/SBNPFS TP/ISC
Applications from FIIs should be accompanied by appropriate documentation supporting the status of the investor and should be sent to the AMC/ISC Chennai, so as to reach them not later than 7 days after the date of the subscription.
The NRIs/PIOs/FIIs may also be required to furnish other documents needed to process their investments.
8. How does an NRI redeem funds?
In the open-end schemes of Sundaram Mutual units can be purchased or redeemed at any point in time. To redeem funds, submit the Common Transaction Form to the nearest Sundaram Mutual Branch/SBNPFS ISC TP. The form must contain the investor's folio number and the amount / units he would like to redeem. Redemption requests by telephone, telegram, fax or email will not be accepted.
If the investor has a H-Pin, he may redeem through the website, www.camsonline.com. The cheque for the redemption proceeds will be dispatched to the investor's registered address or in the case of a foreign address being registered, the proceeds would be sent to the investors bank address.
9. How will the redemption proceeds be paid?
Redemption proceeds will be paid by cheque. The cheque will be payable to the first unit holder and will include the bank account number/Bank name and Branch
Redemption proceeds/repurchase price and/or dividend or income earned (if any) will be payable in Indian Rupees only.
Tax Implications: (As per the laws currently in Force)
Tax Deducted at Source:
Resident Investors: No tax is required to be deducted at source from capital gains arising to resident investors at the time of repurchase or redemption of the units.
Non-Resident Investors: As per the provisions of Act (Section 195), tax is required to be deducted at source from the sale proceeds or redemption proceeds paid to non-resident investors. This withholding is in addition to the STT payable, if any, by the investor.
Foreign Institutional Investors: No tax has to be deducted (Section 196D(2)) on redemption/sale proceeds. Non-Resident Indian ('NRI')/Person of Indian Origin ('PIO'). Tax, on short-term capital gains arising out of redemption of units is deducted at the rate of 10% (plus surcharge) for equity oriented fund and at 30% (plus surcharge) for non-equity oriented fund. Tax, on long-term capital gains is deducted at the rate of 20% (plus surcharge). However, in case of long-term capital gains on redemption of units of an equity-oriented fund, no tax would be deducted.
All the above non-resident investors may also claim the tax treaty benefits available, if any. For details of applicability and eligibility of such benefits, the investors are requested to consult their tax advisors.
10. What is the proof of the Tax Deduction at Source?
A TDS certificate is issued in the name of the investor mentioning the details of the transaction and the tax deducted. The TDS certificate is commonly known as Form16 A.
11. When will the TDS certificate be issued?
A TDS certificate (Form 16A) will be dispatched to the investor at his or her registered address.
12. Is the indexation benefit available to NRIs?
Yes, if units are held for more than 12 months i.e. on long-term capital gains.
13. Can a Power of Attorney (POA) invest on behalf of the NRI investor?
Yes. Unlike banks where a POA holder cannot open an account on behalf of the NRI, in a mutual fund the POA has the authority to invest on behalf of the investor and sign documents for initial and additional purchases as well as redemptions.
While applying for purchase of units the POA holder needs to submit the original POA or a copy duly attested. The Power of attorney document should contain the signature of both the first holder and the POA holder. Only when the POA is registered does the POA holder have the right to transact on behalf of the NRI investor. His signature will be verified for processing any transaction/request.