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How can an NRI from Japan invest in Indian mutual funds? | NRI investments in India

nri from Japan

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I have recently moved to Japan with my husband. I have been planning to invest in mutual funds for a long time. Which are the best SIPs and for how long should I invest? What will be the tax benefits of investing in mutual funds? Also, How can I invest? How will I get who are the best advisors available in the market? I have little knowledge about mutual funds. I read read ET articles on daily basis and want to invest in balanced funds and one or two multicap funds.
--Roshni S. Patil

Rishab Parakh, Founder, Money Plant Consultancy, responds:

Since you have moved to Japan, you will be an NRI and your KYC has to be done in the non-resident category. Only then, you will be able to invest in Indian mutual funds easily. With equity investments whether stocks or mutual funds, one has to have a long-term horizon to expect these investments to create wealth for them. So, you need to invest for a period of minimum 10 or 15 years to optimise returns, though you can invest for short term also but that is always subject to market volatility.
The tax treatment doesn’t change for an NRI except the fact that you need to check double taxation rule with respect to gains from your mutual funds and its taxability in Japan. The long-term capital gains i.e. selling any equity mutual funds after holding it for one year or more is taxable at the rate of 10% and short term gains are taxable at the rate of 15%. You can invest in the following well diversified mix of funds to suit your long-term wealth creation goal:

  • Canara Robeco Emerging Equities Fund
  • Mirae Asset Emerging Bluechip Fund
  • SBI Multicap fund
  • L&T Mid Cap fund
  • Kotak Emerging Equity fund
  • ICICI Focused Bluechip fund
  • SBI Bluechip fund
  • Invesco Contra fund

I suggest you to do your comprehensive financial planning first and then only decide the fund allocation and mix, you may use available online tools like ET money or take the help of a good financial advisor to help you with your financial planning.

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