# How NRIs can invest in Indian mutual funds

Non-resident Indians can invest in mutual funds much as residents do. The differences are the bank account, the KYC and the tax deducted when you redeem.

Full page: https://discovermf.com/guides/nri-mutual-funds
Last checked 23 Oct 2026, from DiscoverMF.

## What you need

- **An NRE or NRO account** with a bank in India. Purchases are paid from it and redemptions are paid back to it.
- **KYC as a non-resident**, with your passport, proof of your overseas address and a photo. The in-person verification can be done by video.
- **A FATCA and CRS declaration**, naming the countries where you are resident for tax and your tax identification number in each.
- **PAN**, as for any investor.

## Residents of the US and Canada

Because of rules in those two countries, some fund houses do not accept investments from residents of the US or Canada. Others accept them with an extra declaration, or only through forms submitted while the investor is in India. Check the fund house's terms before you apply.

## Buying

The steps are the same as for a resident: a distributor, the fund house's website or app, MF Central or MF Utilities, and payment from your NRE or NRO account. [How to buy a mutual fund](https://discovermf.com/guides/how-to-buy-a-mutual-fund) goes through them. A SIP is paid by a bank mandate on the same account.

## Tax deducted at source

No tax is deducted when a resident redeems. For an NRI, the fund house deducts tax (TDS) from the gain on every redemption, at the rate for that kind of gain plus surcharge and cess. On short-term gains from equity funds, for example, the rate before surcharge and cess is 20%.

If more is deducted than you owe, after any relief under India's tax treaty with your country of residence, you can claim the difference as a refund by filing an income tax return in India. [How mutual funds are taxed](https://discovermf.com/guides/mutual-fund-tax) has the rates.

## Taking the money abroad

| Paid from | Redemptions go to | Sending them abroad |
|---|---|---|
| NRE account | NRE account | Freely repatriable |
| NRO account | NRO account | Within the NRO limit of USD 1 million a financial year, with Forms 15CA and 15CB |

## If you become an NRI

Tell each fund house, or update through MF Central, your new status, overseas address and NRE or NRO bank account, and update your KYC with the KRA. You can keep the units you bought as a resident. They are held on a non-repatriable basis, and their redemptions are paid to an NRO account.

## Questions

### Do NRIs need a demat account to buy mutual funds?

No. Units bought from the fund house, MF Central or MF Utilities are held with the fund's registrar in your name, as for residents.

### Can an NRI start a SIP?

Yes, with a bank mandate on an NRE or NRO account.

### Can the tax deducted on redemption be lower?

The deduction follows Indian rates. If a tax treaty or your total income means you owe less, you claim the excess back in your Indian return. Some investors also apply in advance for a lower deduction certificate.