Key takeaway
NRIs and OCIs can invest in Indian mutual funds and listed shares after completing KYC, using NRE (repatriable) or NRO (non-repatriable) routes. Many fund houses restrict investors resident in the US and Canada because of overseas regulatory requirements. Gains are taxable in India and TDS is deducted on redemption for non-residents; your country of residence may tax the same income, with treaty relief.
Getting started
- KYC: passport, overseas address proof, PAN, photograph and FATCA/CRS declarations.
- Bank account: invest from an NRE account for repatriable investments, or NRO for non-repatriable.
- Demat and trading: for listed shares, open an NRI demat and trading account linked to the appropriate bank account; banks and brokers will guide on portfolio investment requirements.
US and Canada residents
Because of reporting and regulatory obligations in those countries, many Indian fund houses do not accept investments from residents of the US or Canada, or accept them only with additional declarations or physical presence in India. Check each fund house’s current policy. US residents should also consider how their home tax rules treat foreign mutual funds.
Tax in India
- Capital gains on equity-oriented funds and listed shares are taxed at concessional rates, with long-term gains above an annual exemption threshold taxed at a flat rate following the 2024 changes.
- Gains on debt-oriented funds acquired after 1 April 2023 are generally taxed at slab rates regardless of holding period.
- Dividends are taxable, with TDS.
- For non-residents, the fund house or broker deducts TDS on redemption gains, so the net amount credited is lower; claim any excess in your Indian return.
Rates and thresholds change; check the position for the tax year under the Income-tax Act, 2025.
Treaties
Some treaties give the country of residence the right to tax certain capital gains. Where applicable, submit a Tax Residency Certificate and Form 10F to the fund house or claim in your return. See DTAA for NRIs.
On return to India
Update your residential status with fund houses and brokers, and redesignate bank and demat accounts. See returning to India.
Related guides
- All NRI legal guides
- NRI tax and FEMA in India: the complete guide
- Investing in India from abroad
- NRI tax, banking and FEMA services
References
- FEM (Non-Debt Instruments) Rules, 2019 — RBI
- SEBI KYC requirements; fund house scheme documents
- Income-tax Act, 2025 (capital gains and TDS on payments to non-residents)
Last reviewed: November 2026.
The information provided is for general educational purposes only and does not constitute legal advice. Applicable laws and procedures may vary depending on the facts, jurisdiction, and circumstances of each matter. Consult a qualified legal professional before taking action.
