Investments in India for NRIs
PIS, Mutual Funds, Real Estate, AIF & the Full FEMA Investment Framework

Investments in India for NRIs span every major asset class — equity, mutual funds, bonds, real estate, fixed deposits, National Pension System, gold, and Alternative Investment Funds. Therefore, the framework draws on the Foreign Exchange Management Act 1999, the Income Tax Act 1961, RBI Master Directions, and SEBI regulations. We deliver complete NRI investment advisory at N D Savla & Associates — covering FEMA permissibility, account-route selection, tax efficiency, and reporting compliance across every asset class.

Our qualified Chartered Accountants have handled NRI investment portfolios across every realistic profile. The list spans US-resident NRIs building equity SIPs through NRE-route mutual funds. We also handle UK-resident OCI card holders adding to fixed deposit portfolios in NRE FCNR accounts. Furthermore, our team supports Gulf-region NRIs investing in Indian residential real estate, Canada-resident NRIs subscribing to IPOs, Singapore-based NRIs accessing AIF Category II, and Australia-resident NRIs exploring National Pension System Tier I. Our investment advisory connects with the wider NRI tax filing framework. Furthermore, we coordinate with FEMA India rules for NRI, capital gain on sale, repatriation of assets, and residential status under the Income Tax Act 1961. As a result, every NRI client receives one consistent investment-plus-tax engagement.

NRI investment activity in India operates within a clear regulatory framework. Therefore, every asset class must clear FEMA permissibility, tax treatment, and SEBI access tests before any rupee gets deployed.

FEMA 1999 — The Foundation

The Foreign Exchange Management Act 1999 is the master statute for cross-border investment activity. Therefore, every NRI investment runs through FEMA permissibility. The Reserve Bank of India issues Master Directions on each asset category. Furthermore, FEMA defines who qualifies as an NRI for investment purposes — typically aligned with the residential status test under Section 6 of the Income Tax Act 1961. Hence, residential status determination is the first compliance step.

Income Tax Act 1961

The Income Tax Act 1961 governs the taxation of NRI investment income. Therefore, capital gains, interest, dividends, and rental income from Indian investments fall under specific Income Tax sections. Furthermore, Section 195 deducts tax at source on most NRI income at the prescribed rate. The India-US, India-UK, and other Double Taxation Avoidance Agreements coordinate with domestic rates. Hence, our team always layers DTAA relief over domestic TDS.

SEBI and Stock Exchange Access

The Securities and Exchange Board of India regulates capital market access for NRIs. Therefore, equity and mutual fund investments must follow SEBI rules. Furthermore, SEBI prescribes the F&O limits, the bond market entry routes, and the AIF eligibility framework. Hence, NRI capital market access combines RBI monetary control with SEBI market regulation.

The Portfolio Investment Scheme is the RBI-regulated framework that allows NRIs to invest in shares and convertible debentures of Indian companies through recognised stock exchanges. Therefore, every secondary-market equity purchase by an NRI must flow through PIS.

Schedule 3 of FEMA

Schedule 3 of FEMA defines the PIS framework. Therefore, the scheme operates as a permission regime — the NRI obtains permission from a designated Authorised Dealer Category I bank before commencing secondary-market equity transactions. Furthermore, the designated bank reports every PIS trade to the RBI on a daily basis. Hence, RBI monitors aggregate NRI holding in each Indian listed company in near real-time.

NRE PIS Versus NRO PIS

An NRI selects between NRE PIS and the NRO route based on funding source and repatriation goal. NRE PIS uses foreign-remitted funds and produces repatriable investment positions. The NRO route uses India-sourced funds and produces non-repatriable positions. Therefore, both routes can run in parallel — an NRI may hold both an NRE PIS account for repatriable equity and an NRO account for non-repatriable equity. Furthermore, only one PIS account per category is permitted across all designated banks.

Sectoral Cap and Aggregate Limit Monitoring

RBI monitors NRI holding limits in each Indian listed company. Therefore, an individual NRI can invest only up to the prescribed percentage of the paid-up capital of a single Indian company on a repatriation basis. The aggregate NRI holding cannot exceed the higher prescribed percentage of the company’s paid-up capital. Furthermore, the company’s general body can raise the aggregate cap to the sectoral ceiling through a special resolution. Hence, our team always checks the caution list and ban list before recommending fresh purchases.

Mutual funds are one of the most accessible asset classes for NRIs. Therefore, every NRI engagement typically begins with a mutual fund allocation analysis.

PIS Not Required

Mutual fund investments do not require a PIS account. Therefore, the NRI invests directly with the Asset Management Company through the NRE or NRO account. Furthermore, KYC compliance and FATCA declaration are the only initial formalities. Hence, mutual fund onboarding is significantly simpler than equity onboarding for NRIs.

SIP and Lump-Sum Both Permitted

NRIs can invest in mutual funds through Systematic Investment Plans (SIPs) and through lump-sum investments. Therefore, monthly SIPs out of NRE or NRO accounts work seamlessly. Furthermore, SIP suits long-term wealth creation across equity, hybrid, and debt categories. Hence, our team frequently recommends SIP-led portfolios for NRI clients building Indian wealth across decades.

US and Canada NRI Restrictions

Many Indian AMCs do not accept investments from US-resident and Canada-resident NRIs. Therefore, FATCA compliance complexity drives the restriction. Furthermore, our team coordinates with AMCs that do accept US and Canada NRI investments. Hence, US-resident and Canada-resident NRIs need a carefully selected fund-house list rather than the full Indian AMC universe.

Tax and PFIC Coordination for US NRIs

US-resident NRIs holding Indian mutual funds face PFIC (Passive Foreign Investment Company) treatment under the US Internal Revenue Code. Therefore, every Indian mutual fund folio creates a separate Form 8621 filing requirement on the US tax return. Furthermore, the default Section 1291 excess distribution regime can produce a punitive US tax outcome. Hence, US NRIs need coordinated India-US planning before committing significant capital to Indian mutual funds.

Real estate is one of the largest asset classes for NRI investment in India. Therefore, the FEMA framework on immovable property deserves close attention.

Our end-to-end capital gain on sale advisory covers the full sale transaction with Section 197 LDC, Form 27Q TDS return, Form 15CA, and Form 15CB.

Certain trading activities are restricted or prohibited for NRIs under FEMA and SEBI rules. Therefore, our team always sets clear expectations during NRI onboarding. Note that legacy holdings such as ESOP allotments received while resident in India can be retained on a non-repatriable basis after migration.

NRIs choose our investment advisory practice for five reasons rooted in real cross-border delivery. First, a qualified Chartered Accountant with specialised NRI investment and FEMA experience leads every engagement. Second, our team coordinates FEMA permissibility, RBI Master Directions, SEBI rules, and Income Tax Act 1961 treatment as one integrated analysis.

Third, we handle every asset class — equity through PIS, mutual funds through the AMC route, real estate under the FEMA Master Direction, fixed deposits, government securities through FAR, AIF subscriptions, gold ETFs, and the National Pension System. Fourth, we coordinate the entire investment lifecycle — KYC, FATCA, PIS opening, execution, Indian ITR-2 filing, and repatriation planning under the USD scheme — so the client receives end-to-end coverage in one engagement. Fifth, our practice is based in Mumbai but works fully remotely with NRI clients across the United States, United Kingdom, Canada, Australia, UAE, Singapore, and the Gulf region.