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A Person of Indian Origin means a citizen of any country (other than Bangladesh or Pakistan), if:
An FII means an institution established or incorporated outside India, which proposes to make investment in Indian securities, and is registered with SEBI.
Yes. NRIs can maintain accounts in rupees as well as in foreign currency. Accounts in foreign currencies can, however be maintained in India with authorized dealers only.
The different kind of Bank Accounts and their characteristics are depicted in the following table:
The following summary outlines the various provisions related to investments by Non - Resident Indians (‘NRIs’), Persons of Indian Origin (‘PIOs’) and Foreign Institutional Investors (‘FIIs’) in the Schemes of the Mutual Fund and is based on the relevant provisions of the Income-tax Act, 1961 (the ‘Act'), regulations issued under the Foreign Exchange Management Act, 1999 and the Wealth-tax Act, 1957 (collectively called 'the relevant provisions'), as they stand on the date of this abridged Offer Document. The following information is provided for general information only. However, in view of the individual nature of the implications, each investor is advised to consult with his or her own tax advisors / authorized dealers with respect to the specific tax and other implications arising out of his or her participation in the schemes.
In case of NRIs, PIOs seeking to apply for purchase of units on a repatriable basis, payments may be made by way of inward remittances, or by way of cheques drawn on the NRE/FCNR Account of the investor [Clause 3(2) of the Regulations] payable at the city where the application form is accepted by any Deutsche Mutual Fund ISC.
n case of NRIs/PIOs seeking to apply for units on a non-repatriable basis, payments may be made by way of inward remittances, or by way of cheques/demand drafts drawn on the NRE/FCNR/NRO account of the investor [Clause 3(3) of the Regulations], payable at the city where the application form is accepted by any Deutsche Mutual Fund ISC.
FIIs may pay for their subscription amounts out of funds held in Foreign Currency Account or Non-resident Rupee Account maintained in a designated branch of an authorized dealer [Clause 3(1) of the Regulations]. Payments may be made by way of cheques payable at a city where the application is accepted by any Deutsche Mutual Fund ISC. Similarly, in case of an application made under a Power of Attorney or by an FII, the original Power of Attorney (or a duly notarized certified true copy thereof), or the relevant resolution/authority to make the application, along with a certified copy of the Memorandum and Articles of Association and/or bye laws and Certificate of Registration should be submitted to the nearest ISC. The officials should sign the application under their official designation. The NRIs/PIOs/FIIs shall also be required to furnish such other documents as may be desired by the Fund in connection with the investment in the Schemes.
No special approval is required. NRIs/PIOs/FIIs have been granted a general permission by RBI [Schedule 5 of the Foreign Exchange Management (Transfer or Issue of Security by a Person Resident Outside India) Regulations, 2000] for investing in /redeeming units of the schemes subject to conditions set out in the aforesaid regulations.
An NRI choosing to invest in Deutsche Mutual Fund cannot make the investment in foreign currency. (Any investment in India except in FCNR account is in rupees only) He needs to give us a Rupee cheque from his NRE, NRO, and bank account in India. He may also send a Rupee cheque from abroad payable in a bank in India.
NRIs/PIOs can invest in units of the schemes on a fully repatriable basis or on a non-repatriable basis where the principal is non-repatriable, but the Income distributed is repatriable.
The answer to both the questions is No.
The Foreign Exchange Management Act, 1999 (the “Act”) or the rules or regulations under the Act does not contain any specific provision, which prohibits an NRI from gifting the units of a mutual fund to another NRI. However the RBI may by regulations prohibit, restrict or regulate the transfer or issue of units by a person resident outside India. Currently there are no regulations issued by the RBI prohibiting an NRI from gifting units in a mutual fund.
If an application is received before the prescribed cut off timings on any business day, the allocation of units will be at the applicable NAV adjusted for entry load, if any on the particular scheme. All applications received after the prescribed time will be treated as having been received on the next business day and the units allotted accordingly.
All schemes Deutsche Mutual Fund are open-ended schemes, which means they can be purchased or redeemed at any point of time. In order to redeem funds the investor needs to submit the redemption request in original at the nearest Investor Service Centre. All the redemption request forms must contain the Investor’s folio number, the amount / unit he would like to redeem and should be duly signed by the Investors on record or their POA holders. Redemption requests by telephone, telegram, fax or email will not be accepted.
Redemption proceeds will be paid by a payable at par cheque and payments will be made in favour of the first Investor and the bank account number shall be mentioned on the cheque as well. Redemption proceeds/repurchase price and/or dividend or income earned (if any) will be payable in Indian Rupees only. The Deutsche Mutual Fund will not be liable for any loss on account of exchange fluctuations, while converting the rupee amount in US Dollar or any other currency.
Under the exchange control regulations general permission is granted to authorised dealers to allow repatriation of proceeds of investments made under Repatriable Schemes. The investments shall carry the right of repatriation of capital invested and capital appreciation so long as the investor continues to be a resident outside India, after payment of tax, if any. In the case of an FII, the designated branch of the authorized dealer may allow remittance of net sale/maturity proceeds (after payment of taxes) or credit the amount of sale/ maturity proceeds to the Foreign Currency account or Non-resident Rupee Account of the FII investor maintained in accordance with the approval granted to it by the RBI [Clause 5(i) of the Regulations]. In any other case, where the investment is made out of inward remittance or from funds held in NRE/FCNR account of the investor, the maturity proceeds/repurchase price of units (after payment of taxes) may be credited to NRE/FCNR/NRO Account of the non-resident investor maintained with an authorized dealer in India [Clause 5(ii) of the Regulations]. For transfer to overseas account of the Investor Deutsche Mutual Fund will not be responsible and the Investor will have to contact the Authorized dealer for the same.
Where the purchase of units is made on a non-repatriable basis, the maturity proceeds/repurchase price of units (after payment of taxes) will not qualify for repatriation out of India and the same may be credited to the NRO account of the non-resident investor [Clause 5(ii) of the Regulations]. However the interest earned on an NRO Account is repatriable. Similarly, investments in units purchased in Rupees while the investor was resident of India and becomes non-resident subsequently will not qualify for repatriation of repurchase proceeds of units. The entire income distribution on investment will however qualify for full repatriation. Investors are advised to contact their banks/tax consultants if they desire remittance of the income distribution on units abroad.
As per the taxation laws in force as at the date of updating this document, the tax benefits that are available to the investors investing in the Units of the Scheme(s) are stated herein below. The tax benefits described in this Document are as available under the present taxation laws and are available subject to relevant conditions. The information given is included only for general purpose and is based on advice received by the AMC regarding the law and practice currently in force in India and the Investors/Investors should be aware that the relevant fiscal rules or their interpretation may change. As is the case with any investment, there can be no guarantee that the tax position or the proposed tax position prevailing at the time of an investment in the Scheme will endure indefinitely. In view of the individual nature of tax consequences, each Investor is advised to consult his/ her own professional tax advisor.
The Mutual Fund will receive all income without any deduction of tax at source under the provisions of Section 196(iv), of the Act. However, on income distribution, if any, made by the Mutual Fund, the Fund will be liable to pay additional income-tax under Section 115R of the Act, at 12.5% (plus surcharge as applicable from time to time) on the amount of income distributed by the Mutual Fund declared under the schemes on or after April 1, 2003
However, these provisions will not be applicable to any income distributed by an open-ended equity oriented fund (where more than 50 percent of total proceeds of the mutual fund are invested in equity shares of domestic companies as defined in Section 115T of the Act) for a period of one year commencing from April 1, 2003.
The following summary outlines the key tax implications applicable to an NRI / PIO / FII based on the relevant provisions under the Income-tax Act, 1961 ('Act'), Wealth-tax Act, 1957 (collectively called 'the relevant provisions'), subsequent to the amendments enacted by the Finance Act 2003.
As per the provisions of Section 10(35) of the Act, any income received in respect of units of a mutual fund specified under Section 10(23D) of the Act on or after 1.04.2003 is exempt from income tax in the hands of the recipient Investors.
Units of the scheme which are held as capital asset for a period of more than twelve months preceding the date of transfer, will be treated as a long-term capital asset as per the proviso to sub-section (1) to section 112 of Income tax Act. Also, sub-section (7) of section 94 of the Act provides that loss, if any, arising from the sale/transfer of units (including redemption) purchased up to 3 months prior to the record date and sold within 3 months after such date, will not be available for set off to the extent of income distribution (excluding redemptions) on such units claimed as tax exempt by the Investors.
Long-term capital gains on sale of Units, would be taxed at the rate of 10% under Section 115AD of the Act. Such gains, would be calculated without indexation of cost of acquisition. Short-term capital gains would be taxed at 30% and without conversion of cost of acquisition and full value of consideration in foreign currency, as the first proviso and second proviso to Section 48 do not apply to Foreign Institutional Investors by virtue of Section 115AD(3) of the Income Tax Act. The said rates would be subject to applicable tax treaty relief. The above tax rates would be increased by applicable surcharge. No tax would be deductible at source from the capital gains (whether long-term or short-term) arising to an FII on repurchase/redemption of units in view of the provisions of Section 196D(2) of the Act.
Long-term and short-term capital gains arising to NRIs/PIOs/ from the transfer of units of the Scheme, will be taxable at the following rates:
* plus surcharge as may be applicable (Refer Note 1).
* plus surcharge as may be applicable
Units held under the Schemes are not treated as assets under Section 2(ea) of the Wealth Tax Act, 1957 and are therefore not liable to wealth tax. Note 1: Surcharge is levied as under
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