In this video on questions by our NRI viewers on their finances. Chhavi Prabhakar, CEO, Global Indian Solutions which helps NRIs manage finances will answer questions on NRI investments in FDs and mutual funds
Kenneth Kotabagi asks how can a Seafarer invest in mutual funds
The next question is by by S.H.Vishal who has been investing through the GrowApp using his NRO account to pay the SIP amount. He wants to know whether he can get redemption in his NRO account or he needs an Indian savings account
Sunshine says that her husband has an NRE account and has fixed deposits (FD) which has been earning interest all these years . The interest wasn't taxable but if he returns to India and can't retain NRE status , will the income from the NRE deposit taxable?
As a Seafarer you need to ascertain your residential status . Both NRIs and resident Indians can invest in mutual funds
The SIP route can be used and it can be done through your NRO account or NRE account wherever you have funds lying
Do set up a SIP for the appropriate mutual funds with help from your advisors
Vishal's question is that he has invested in mutual funds and whether he can redeem it in the NRO account
The answer is yes. You can use the same account through which you would have done your investment. Or, this can be done in a different account
You can also change the bank account with the mutual fund house
The redemption proceeds can come directly into that account
Please keep in mind that NRO account in non-repartiable. So, if you had done your investments through your NRE account. it is better that you get it redeemed through the NRE account
There is no need to have a separate residence status account
Sunshine had asked whether on changing the status of non resident Indian, whether the returning NRI can hold the NRE FD and what is the tax implication of the funds from maturity proceeds
or if you were to break the deposit
First and foremost, once your residence status changes and you have an intention of returning to India permanently
Ideally, your NRO account needs to converted back to a resident savings account. Your NRE FD as well as FCNR (B) deposit, which is in foreign currency, can be held till maturity
Tax implication of a returning NRI is that you get the status of RNOR i.e. Resident But Not Ordinary Resident in India. In that case you can actually convert and hold your NRE deposit on maturity. You can convert it as well as your FCNR (B) deposit
The maturity amount can be held in a Resident Foreign Currency (RFC) deposit
The criteria for RNOR status is that of the previous 10 years prior to the return of the NRI, 9 years are required to be with NRI status
Or, in the 7 preceding financial years before return to India, the person shouldn't have lived in India for more than 729 days
Always take help from an advisor so that you get credible guidance