Mutual Funds in India - Part 1

NRIs who live in US and are considering returning to India at some point, should give a serious thought to investing in India through Indian mutual funds:

-Why mutual funds in India vs. Indian mutual funds in US?
# Long term capital gains taxes in India on equity schemes are 0, thats right, nil. So, considering India's GDP growth, and the fact that this growth shows a promising future, it makes sense to invest in India and take advantage of this 0% long-term capital gains taxes. Long term capital gains tax in US is 15%. Long term refers to any investment over 12 months in both countries.

# Taking a bearish view on the dollar long-term vs. a bullish view on the rupee, you are probably better off investing in funds in India where your rupee will only grow, vs. investing in dollars which probably will fall. This will leave you with a bigger portfolio when you return to India vs. trying to convert all your assets into rupees when returning to India. Five year chart of US dollar converted to Indian rupees is shown below:



-How to buy mutual funds in India?
#The very first thing you will need is a savings account - you can easily open one through either ICICI or HDFC or any other bank offering this service. If you are considering buying mutual funds through your income here, then you need an NRE savings account. If you already have income in India through any source, you can open an NRO account.

#PAN cards are becoming increasingly mandatory for any kind of investment/tax payment in India. To apply for a PAN card, you can fill out an online application here.

# Once you have this savings account, you can buy mutual funds by issuing a check or demand draft from this account, some mutual funds also allow online payments

# You can buy mutual funds through a lot of places like ICICI Prudential, Tata, Birla, Reliance etc.

-NRI Resources
# Reliance has a good guide to NRI investing here