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Is there a taxation difference in investing in mutual funds via NRE and NRO accounts?

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Is there a taxation difference in investing in mutual funds via NRE and NRO accounts?
What’s the distinction in investing in mutual funds by way of NRE account vs NRO account? I imply at redemption time, is there a tax distinction between NRE and NRO?

— Jayakumar Selvi




Shifali Satsangee, Founder, Funds Ve’daa, a mutual fund advisory agency, based mostly in Agra responds:

The distinction in investing in MF by way of an NRE account vs NRO account is that when an funding is made by way of the NRE account, the redemption proceeds will be credited to the NRE account or NRO account(if investor chooses to), but when funding is comprised of an NRO account, the redemption proceeds will be credited solely in NRO account. TDS is relevant when redemption is being made both to NRE account or NRO account. Nevertheless it might be famous that in case of NRI who maintains the standing of Non Resident on the time of redemption falls underneath specified asset inside Chapter XIIA of Earnings Tax Act, 1961- Particular Provisions regarding sure earnings of non residents. He/she will be able to take good thing about concessional taxation and many others. topic to declaration filed offered in regulation. Additional on change of his/her residential standing he/she will be able to proceed to be ruled by the provisions of this Chapter of Earnings Tax Act.

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