NRI (UK) mutual fund investment advice

#11
When you sign up with AMCs, ask them if they will send you an email intimation before every SIP and also if its possible to change the SIP amount. In my understanding, the amount is fixed and you cannot change it on the go. If you have extra cash, just dump it in a liquid fund or a MIP fund. Read about HDFC's Flex STP also.

An alternative: I know a round about way to go about it. For eg., lets suppose you can put down 7500Rs per month into a fund for sure and sometimes 10000Rs per month. In that case, set up a 4 individual SIPs of 2500Rs, 1 week apart from each other, say on every 5th, 12th, 19th and 26th of each month (BTW, you can get a slightly better cost averaging). Whenever you have the entire 10000Rs in your account, let all 4 SIPs trigger that month. But if you have only 7500Rs that month, either add extra 2500Rs before the 4th SIP could trigger or cancel it altogether. One drawback is that you have to set up the 4th SIP once it stands canceled. Don't do it for more than 1 fund because you might forget it and it might trigger without sufficient funds in your account.
Thank you Yodlee.

I understand what you means. My problem is "variable surplus amount", what I mean by this is that one month I can send Rs 10,000 and the next month in could be 2 lacs. The variability is too high and too often and I really want to take the advantage of SIP.

So far what I have thought is, I will dump my money in NRE account and make sure that I can run at least 3 to 4 SIPs without any problem.... is there any better way to do this?
 
#12
In that case, I would suggest you to move the money into your NRE account, transfer it into a few debt funds and do monthly/weekly STP into actively managed diversified mutual funds.
Can u mention the mutual funds that you have in mind.
 
#13
In that case, I would suggest you to move the money into your NRE account, transfer it into a few debt funds and do monthly/weekly STP into actively managed diversified mutual funds.
Can u mention the mutual funds that you have in mind.
But if I have STP from a debt fund to equity fund.... the tax is too high for NRI's, isn't it? and also it will be short-term tax..... on the debt fund.... isn't it?

I have four in mind Yodlee to start with. I got these from Mint50's (http://www.livemint.com/sectionpages...aspx?NavId=127)

Birla Sun Life Frontline Equity A Gr
DSP BlackRock Top 100 Equity Gr

Birla Sun Life Mid Cap A Gr
DSP BlackRock Small Midcap Gr 3

I would like to see some criticisms and/or feedbacks, to filter my choice....
 
#14
I am not sure about the tax aspect for NRIs investing in indian market. From my understanding, if capital gains (interest from FDs + dividends + profit from proceeds etc) come above the tax limit within a single financial year, you may have to shell out taxes. I think the tax now is 10% for income < 1.6 lakh and might shoot upto 2 lakh from next fin year due to the new DTC guidelines.
Do you really think your interest income would come over 1.6 lakh in 1 year ? If so, you can split investment with other family members, to reduce taxes. Please check with more credible sources on NRI taxation investing in Indian market.

Regd fund choices, you can start with Birla SL Frontline Equity plan A (growth); HDFC Equity (growth); DSPBR Top 100 (growth); Reliance Regular savings equity fund. Read more in www.valueresearchonline.com. Good luck.
 
#15
I am not sure about the tax aspect for NRIs investing in indian market. From my understanding, if capital gains (interest from FDs + dividends + profit from proceeds etc) come above the tax limit within a single financial year, you may have to shell out taxes. I think the tax now is 10% for income < 1.6 lakh and might shoot upto 2 lakh from next fin year due to the new DTC guidelines.
Do you really think your interest income would come over 1.6 lakh in 1 year ? If so, you can split investment with other family members, to reduce taxes. Please check with more credible sources on NRI taxation investing in Indian market.

Regd fund choices, you can start with Birla SL Frontline Equity plan A (growth); HDFC Equity (growth); DSPBR Top 100 (growth); Reliance Regular savings equity fund. Read more in www.valueresearchonline.com. Good luck.
Hey Yodley

Thanks for this.

No, I don't think my income will be over 1.6 lakh. But my taxation concern was related to this table below

Short Term (Less thean one Year) Capital Gains Tax NRI
Equity schemes 17% (15% Tax + 10% Surcharge + 3% Cess)
Debt schemes 33.99% (30% Tax + 10% Surcharge + 3% Cess)

http://mutualfund.birlasunlife.com/ServiceHelpdesk/NRIFAQs/tabid/432/Default.aspx (Source)

You are not telling me that the above tax on Debt Schemes is only when the income is more than 1.6 lakhs, are you?
 
#16
Hi H,



Coming to your questions, here is what I would suggest.

1. Apply for PAN, if you don't have it already.
2. Take care of KYC requirements. cvlindia has information about how to do it.
3. Have an NRE account
4. Select the MFs you want to invest in. Select those who allow online access e.g. HDFC, Reliance, Sundaram etc. Refer to valueresearch if needed.
5. Do initial investment in chosen fund(s) by filling up the paper form, attaching your check and PAN/KYC proof and give it directly to the AMC office. Provide your bank details on the form so that funds deposit/withdraw is seamless.
6. After you have the folio(s) created, fill up respective PIN agreement forms and submit to the AMC.
7. When PIN is received - you are all set.

You don't need any middlemen like ICICIDIrect or SBI to buy MFs. You do not need DEMAT or PINS (this is the one required to invest in equities, right?) to invest in MFs. Money invested through NRE accounts is repatriable.

Hope it helps.

-- Milind
There is an alternative idea to buy MFS through online. You can open account with Fundsindia .com( its free account only) and buy any MF through SIP.....
https://www.fundsindia.com/
 
#17
I think these are the current rules. Note that Short term means <1year from the date of purchase. Short term capital gains tax come into picture if you sell mutual fund units within 1 year of purchase. For equity schemes, Long term rates apply for >1yr timegap between purchase and redemption and these are 0!
Debt schemes always attract higher taxes for some weird reasoning.
If you donot want to be taxed at the source, you got to fill out a TDS form when you sign up for a SIP with the AMC, i think.
 
#18
I think these are the current rules. Note that Short term means <1year from the date of purchase. Short term capital gains tax come into picture if you sell mutual fund units within 1 year of purchase. For equity schemes, Long term rates apply for >1yr timegap between purchase and redemption and these are 0!
Debt schemes always attract higher taxes for some weird reasoning.
If you donot want to be taxed at the source, you got to fill out a TDS form when you sign up for a SIP with the AMC, i think.
But the very logic of STP means short term, isn't it?

for example, I deposit Rs 1,00,000 in a debt fund with Rs, 10,000 coming out of it every month for SIP in equity fund with the same AMC. So I am selling every month Rs 10,000 worth assets in the fund.... do you understand what I am trying to say here?
 
#19
STP = Systematic transfer plan.

Boss, take some time and read previous posts in this forum as well as valueresearchonline. Also read similar member forum at other websites like moneycontrol. If I were you, I would take about 1 full month and learn some more. It is more important that you start it right knowing completely what you are getting into.
I would also suggest not to invest now plus the market is due for a correction soon. I knew of some one in my friend's circle who had burnt his finger in 2007 and has never returned back to the market. Remember that the first impression of the market is the best one. Also, this is all about taking calculated risk.
 
#20
STP = Systematic transfer plan.

Boss, take some time and read previous posts in this forum as well as valueresearchonline. Also read similar member forum at other websites like moneycontrol. If I were you, I would take about 1 full month and learn some more. It is more important that you start it right knowing completely what you are getting into.
I would also suggest not to invest now plus the market is due for a correction soon. I knew of some one in my friend's circle who had burnt his finger in 2007 and has never returned back to the market. Remember that the first impression of the market is the best one. Also, this is all about taking calculated risk.
Thanks buddy, but I think you got be all wrong. I didn't mean stp's full form is short term but the idea behind it, in context to short term tax. Lol, it is funny though how we can interprete the same thing in a different way. But may be it is my fault, I should have rephrased my sentence.

I agree research is very important and this is what I am doing. I didn't get the answer of my question in old post so I asked here.
 

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