Are you an NRI residing in the US or Canada and facing challenges in investing in Indian Mutual Funds?Many Asset Management Companies (AMCs) in India restrict investments from US and Canada-based NRIs unless they are physically present in India at the time of the investment. But don’t worry—there’s good news for you!
At ProStocks, we’ve empanelled with select Mutual Fund AMCs that accept online investments from NRIs based in the USA and Canada. These AMCs include:
- Motilal Oswal Mutual Fund
- Nippon India Mutual Fund
- UTI Mutual Fund
NRIs can use both NRE PIS as well as NRO NON PIS Trading & DEMAT account to invest in Mutual Funds.
Are these Mutual Funds Direct or Regular in nature?
You have access to both Direct as well as Regular mutual funds through our platform.
What are the charges collected by ProStocks?
Investing in Mutual funds through ProStocks is completely online and free – we do not even collect a platform fee or AMC!
How are Gains/Dividends from these Mutual Funds taxed in India?
Mutual fund taxation in India depends on two factors:
- Type of fund (Equity, Debt, etc)
- Duration of investment (whether short term or long term)
| Category |
Holding Period |
Type of Gain |
Tax Rate |
| Equity oriented |
<12 months |
Short Term |
20% (plus surcharge & cess) |
| >12 months |
Long Term |
12.5% (plus surcharge & cess) |
| Debt oriented |
<24 months |
Short Term |
Taxed as per slab rates |
| >24 months |
Long Term |
20% with indexation (plus surcharge & cess) |
The above mentioned tax rates are effective from 23rd July 2024 onwards.
For debt-oriented mutual funds, with effect from 23rd July 2024, the holding period for determining whether the gains are short-term or long-term has been reduced from 36 months to 24 months.
Long Term Capital Gains of up to Rs 1,25,000 are exempt upon filing of Income Tax Return.
Is TDS applicable on dividend/capital gains income from Mutual Funds?
For NRIs, TDS provisions are applicable on every rupee of income whether it’s dividend or capital gains. If the actual tax liability is less than the TDS, a refund can be claimed by filing returns in India.
Will my income be taxed in both India and USA/Canada?
The USA and Canada tax the global income of their residents, meaning that income earned through Mutual Funds in India is taxable in both countries—India as well as the USA/Canada. However, India has a Double Taxation Avoidance Agreement (DTAA) with both countries, which ensures that the same income is not taxed twice. While the India-USA and India-Canada DTAAs do not provide for a lower capital gains tax rate, they allow NRIs to claim a Foreign Tax Credit for the taxes paid in India, which can be set off against the tax payable in the USA and Canada.
Example:
Tax paid in India: Rs 20,000
Foreign Tax Credit (FTC): Rs 20,000
Tax payable in USA/Canada: Rs 35,000
Tax to be paid in USA/Canada: Rs 35,000 – Rs 20,000 = Rs 15,000
Existing USA & Canada ProStocks clients can reach out to enable their Mutual Funds segment:
Don’t miss this opportunity to grow your wealth and stay connected to India’s booming financial markets. With ProStocks, investing in Mutual Funds has never been easier for NRIs in the US and Canada!
