NRI Mutual Fund Investment: No Upper Limit, but Restrictions Apply Based on Country of Residence.
As an NRI residing in Oman, you are saving the following amounts:
- Rs 1.50 lakh in a PPF account.
- Rs 5,000 monthly SIP in a healthcare fund.
- Rs 1,000 monthly SIP in a consumption fund.
- Rs 5,000 monthly SIP in a gold fund.
As an NRI investing from Muscat, you are not required to file tax returns in India unless you have taxable income generated within India. The maximum limit for NRI investments in mutual funds in India typically has no specific upper bound, but it’s essential to check with individual mutual fund companies for any restrictions based on your residency or citizenship status. It’s recommended to continue investing regularly from your regular savings account to achieve your financial goals over your 15-year time horizon.
Balwant Jain, a tax and investment advisor, suggests refraining from investing in sectoral schemes due to their dependence on the performance of specific sectors. Instead, he recommends diversified equity funds, where fund managers allocate to various sectors based on market trends. He advises discontinuing SIPs in healthcare and consumption funds. Additionally, he suggests reducing the allocation to gold, as it may be too high compared to the overall portfolio.
Balwant Jain recommends considering Sovereign Gold Bonds (SGB) over gold funds due to their unique benefits. SGBs offer an annual interest rate of 2.50% on the investment amount, making them a more attractive option compared to gold funds, which incur annual expenses. He suggests purchasing SGBs from the market to ensure that the average investment in gold does not exceed 10%-15% of the overall average monthly investments.
Given your investment time horizon of around 15 years, Balwant Jain suggests adopting an aggressive equity investment approach, considering your ability to take on higher risk. He advises reviewing your investments periodically, preferably at least annually, to ensure they align with your financial goals and risk tolerance.
Balwant Jain’s recommendation for monthly investments totaling Rs. 21,000 is as follows:
- Nifty 50 Fund: Rs. 8,000
- Flexi Cap Fund: Rs. 6,000
- Small Cap Fund: Rs. 4,000
- Sovereign Gold Bonds (SGB): Rs. 3,000
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