How does an NRI invest in Schemes of TATA Mutual Fund?
In order to invest in Tata Mutual Fund NRI Investors are requested to
- Complete the Common Application Form duly
- Attach a Rupee cheque or Rupee draft in favour of "Name of the Scheme" and crossed "A/c payee" only and payable at the location where the application is submitted i.e. the official point of acceptance. With regards
to the cheque/ draft given NRI investors should note:
- For purchases on Repatriation basis: Investor needs to give a cheque or draft in Indian rupee drafts purchased abroad or out of funds held in NRE/FCNR account payable at par and payable at the cities where
the Investor Service Centres are located. In case of Indian rupee drafts purchased through NRIs/FCNR account, an account debit certificate from the bank issuing the draft confirming the debit should
also be enclosed.
- For purchases on Non - Repatriation basis: NRIs investing on a non repatriable basis may do so by issuing cheques/demand drafts drawn on Non-Resident Ordinary (NRO) account payable at the cities where the
Investor Service Centres are located.
- However, for an NRI to invest it is mandatory that he/she maintains a bank account in India.
- Investments cannot be made in foreign currencies.
- Attach a photocopy of the PAN card duly attested by the distributor / agent (AMFI/NISM registered) through whom the application is effected or by Bank Manager of a scheduled commercial bank in India (The authorized
signatory stamp should clearly mention the name, designation, and name of the Bank Branch Manager) or Notary or Investor Service Centers of TATA Mutual Fund or Investor Services Center (ISCs) of Computer Age Management
Services (CAMS).
- Attach a self attested Know Your Customer (KYC) acknowledgement letter or the print out of the KRA site where the PAN reflects that KYC formalities are completed.
- PIO's need to attach a copy of the PIO card with the application form at the time of investing.
- Submit or mail the above to any of the Official Points of Acceptance of Transactions specified by Tata Mutual Fund. (For the list of our branches please click here: Locate Us)
Does Tata Mutual Fund have an option to “Transact online”?
Yes, Tata Mutual Fund has an option to Transact online for existing investor. For more details of this facility and FAQs please click here
How does an NRI investor redeem his/her funds?
In case the NRI investor has opted for the online facility he can apply for redemption online on the “Transact Online” section.
Alternatively the investor needs to submit the redemption request in original at the nearest official point of acceptance of transactions. All the redemption request forms must contain the investor's folio number, the amount,
name of the schemes, Units he/she would like to redeem and should be duly signed by the unit holders on record or their Power Of Attorney (POA) holders. Redemption requests that lack valid signatures will be rejected.
Payment to NRI/FII Unit holders will be subject to the relevant laws / guidelines of the RBI as are applicable from time to time (subject to deduction of tax at source as applicable. For more details please refer Question
refer the question what is the tax implication for NRI investors).
In the case of NRIs:
- Credited only to Non-Resident (Special) Rupee (NRSR) account of the NRI investor where the payment for purchase of Units redeemed was made out of funds held in NRSR account or
- Credited, at the NRI investor’s option, to his / her NRO or NRSR account, where the payment for the purchase of the Units redeemed was made out of funds held in NRO account or
- Remitted abroad or at the NRI investor’s option, credited to his / its NRE / FCNR / NRO / NRSR account, where the Units were purchased on repatriation basis and the payment for the purchase of Units redeemed
was made by inward remittance through normal banking channels or out of funds held in NRE / FCNR account.
The cheque or the DD for purchase / additional purchase should be payable or drawn on which location?
The cheque/DD should be payable or drawn on the location where the application is submitted and accepted i.e. at the official points of acceptance of transactions of Tata Mutual Fund. (For the list of our branches please
click here: Locate Us)
With a view to enhance compliance with Know Your Customer (KYC) norms under the Prevention of Money Laundering Act, 2002 (PMLA) and to mitigate the risks associated with acceptance of third party payment instruments (cheques,
demand drafts, pay orders etc.), Association of Mutual Funds in India (AMFI) issued best practice guidelines on ‘Risk mitigation process against third party cheques in mutual fund subscriptions’.
Accordingly, with effect from November 15, 2010 Tata Mutual Fund will not accept applications for subscriptions accompanied with third party payment instruments except in
exceptional situations.
Third Party Payment is defined as:
- Payment made through an instrument issued from an account other than that of the beneficiary investor.
- It is clarified that in case of payments from a joint bank account, the first holder of the mutual fund folio has to be one of the joint holders of the bank account from which payment is made.
- Investments from the investor's account with a different bank i.e., the pay-in & payout banks are different, if the pay-in bank mandate could not be established to be that of the investor, it will also be treated
as third party investment.
The exceptional situations where the same will not be applicable are as follows:
- Payment by Parents/Grandparents/related persons on behalf of a minor in consideration of natural love and affection or as gift for a value not exceeding Rs. 50,000/- (each regular purchase or per SIP installment);
- Payment by employer on behalf of employee under Systematic Investment Plan (SIP) facility through payroll deductions;
- Custodian on behalf of an FII or a Client
In case of the exceptional situation as above, following would be mandatory requirements:
- KYC for investor and the person making the payment.
- Declaration from investor and person making payment (Person making payments declaration should carry the relationship with investor and the details of bank account from which funds are being received.)
- Proof for Source of funds being from the Drawers account only
Points to be taken care of by investors at the time of purchase:
- Investors need to provide the bank account details of the subscription cheque in the application form during the purchase.
- In case it cannot be established that the cheque belongs to the applicant i.e. if the name of the first unit holder is not present on the cheque, in that case addition documentation as follows can be provided:
- A copy of the bank passbook or a statement of bank account having the name and address and the account number
- A letter (in original) from the bank on its letterhead certifying that the investor maintains an account with the bank, along with information like bank account number, bank branch, account type, the
MICR code of the branch & IFSC Code (where available) (The letter should be certified by the bank manager with his / her full signature, name, employee code, bank seal and contact number.)
- In case where the bank account numbers have changed on account of the implementation of core banking system at the banks, any related communication from the bank towards a change in bank account number
is required.
- In case the subscription payment is made by the way of RTGS/NEFT/ECS/Bank Transfer, such requests should be accompanied with a copy of the instruction to the bank stating the account number debited. The bank A/c
should be a registered bank account or belonging to first unit holder.
- In case the subscription payment is made by the way of prefunded instruments like POs/DDs etc, such requests should carry a certificate from issuing banker stating Account holders name and Number.
- Prefunded instrument issued against Cash shall not be accepted for investments of Rs. 50,000/- or more. Also, this should be accompanied with Banker Certificate giving name, address and PAN of the person who has
requested for DD.
- Further to prevent frauds and misuse of payment instruments, Tata Mutual fund strongly recommends that investors must make the payment instrument favoring either of the following:
- “XYZ Scheme A/c Permanent Account Number of First Investor
- “XYZ Scheme A/c First Investor Name.”
- “XYZ Scheme A/c Folio No.”
Can an NRI have a joint account in a scheme of Tata Mutual Fund with a resident Indian?
Yes. An NRI investor can have a joint holding with a Resident Indian or a Non-Resident Indian in a scheme of Tata Mutual Fund.
Does TMF have a online tracking of the undelivered redemption / dividend cheques?
Yes. TMF offers a facility to track redemption / dividend cheques which have returned to us undelivered. Please click here to access the link.
All you have to do is simply key in your folio number and you will be updated if there are any redemption / dividend cheques that have been returned back to us undelivered.
In case there are any RUDs, kindly fill the IFSC (NEFT/RTGS) code Updation Form to have your proceeds directly credited to your bank account.
Communication for Existing NRI investors
New provisions for NRI TDS applicable w.e.f. April 1st 2010
In terms of Section 206AA of Income tax Act, 1961, introduced by Finance (No.2) Act, 2009, w.e.f. 1st April, 2010, notwithstanding anything contained in any other provisions of the mentioned act, any person (including NRI’s
) entitled to receive any sum or income or amount, on which tax is deductible under Chapter XVIIB shall furnish his Permanent Account Number (PAN) to the person responsible for deducting such tax failing which tax shall
be deducted at the higher of the following rates, namely:
- at the rate specified in the relevant provision of this Act or
- at the rate or rates in force or
- at the rate of twenty per cent.
Under the new provisions the tax will be charged at the higher of the rates mentioned above if the PAN number of the investor is not available / provided by the investor. (The said Tax Rate would be increased by an applicable
Surcharge, Education Cess and Secondary Higher Education Cess)
If your PAN is not updated in your folio, we request you to provide us a copy of your PAN along with a request letter mentioning the folio numbers to your nearest Investor Service Centre (ISC)
The copy of the PAN must be attested by any of the following:
- Your current distributor/Broker as reflected in your account statement, with the Distributor Name and ARN
- Manager of a Scheduled Commercial Bank (Name, Designation and Seal should be affixed on the copy).
- Official from the local office of the Indian Embassy / Consulate.
- Self Attestation - you can also carry the Original PAN Card along with self attested photo copies of your PAN Card to any of our Investor Service Centre (Originals will be returned over the counter after verification)
What is the mode of Redemption and Dividend payout offered by TMF?
TMF has tie up with various banks to credit the redemption/dividend payouts using electronic interface like Direct Debit and also utilizes the National Electronic Funds Transfer (NEFT) system and Electronic Clearing System
(ECS) offered by Reserve Bank of India (RBI). Further we issue payable at par cheques, Demand drafts drawn on the investor’s location in case electronic payouts are not possible.
NEFT facility is a
Nation Wide Funds Transfer System to facilitate transfer of funds from any bank branch to any other bank branch.
This service offers the following benefits over the current procedure for payout wherein a physical warrant is dispatched to you which in turn need to be deposited with your bank:
- Reduction in the cycle time to receive the payouts. The time for realization of credit is within 2 days of releasing the payout in other words you will receive a credit even before the statement of account reaches
you.
- You need not make frequent visits to you bank for depositing the physical paper instruments.
- You need not apprehend loss of instrument and fraudulent encashment.
- The delay in realization of proceeds after receipt of paper instrument is eliminated.
Investors can avail of this service by providing their Indian Financial System Code (IFSC) Code of their bank-branch and their account number in the application form along with the one cancelled cheque of that bank account.
What is the procedure to change the Tax Status from NRI to Resident Indian?
The investor needs to provide a Self declaration mention the change in the tax status and to request the change of bank details from NRE/NRO to Resident Indian. He needs to attach the Cancelled cheque leaf of the NRI (erstwhile)
bank accounts as well as the new bank account.
What are the KYC formalities that the NRI need to complete?
The investor needs to complete the KYC formalities with Point of Services (POS) offered by KYC Registration Agency (KRA). In order to complete the KYC formalities the investor needs to:
- Complete the KYC form for Individuals and sign on both the pages in case the print is not taken back to back.
- Provide the Proof of Identity: Self attested copy of the PAN card and self attested copy of the passport.
- Provide the Proof of Address: Any one of the self attested copy of the documents as mentioned on the application form for the correspondences as well as Overseas address. Please note that for NRIs the Proof of overseas
address is mandatory. If the address mentioned on the passports is same as one of the address in the KYC application form it serves as a valid proof.
- Complete the In person Verification Process (IPV): The new common KYC regulation mandates all intermediaries should complete In-Person Verification (IPV) for all clients. Mere submission of identity and address
proofs is not sufficient under the new regulations. IPV can be performed only by the distributor whose ARN code is mentioned on the investment application form accompanying the KYC application form.
- IPV can be performed by a banker only in case of "Direct" investors i.e. applications not routed through distributors. Additionally, IPV performed by a scheduled commercial banker will be accepted.
- The intermediary will provide an acknowledgement letter confirming that the investor has completed the KYC formalities and submitted the requisite documents for the same. Further, the KRA will also send a confirmation
letter to the investor, within 10 days of receipt of the documents from the intermediary.
Is nomination by NRIs allowed in the schemes of Tata Mutual Fund?
Can a Power of Attorney (POA) holder invest on behalf of the NRI investor?
Yes. In a mutual fund the POA holder has the authority to invest on behalf of the investor and sign documents for initial and additional purchases as well as request for redeeming units from the account. While applying
for purchase of units the POA holder needs to submit the original POA or an attested copy duly notarized. The POA should contain the signature of both the NRI investor and the POA holder. Only then the POA is registered
and the POA holder has the right to transact on behalf of the NRI investor. The POA holder's signature will be verified before and for processing any transaction/request.
Attestation of the photocopy of the POA can be done by:
- The Notary or
- The Branch Manager of the bank where the NRI has his NRE/NRO Bank account. The name and the designation/code of the Bank Manager should be clearly mentioned.
- The Front office Tata Mutual Fund post verification with the original.
- POA should contain a clause empowering the POA holder to invest in securities on behalf of the NRI. Please note that a POA holder cannot nominate on behalf of the NRI.
How can an NRI carry out transactions like additional purchase / redemption / switching?
Once an account is opened i.e. a folio is created, the NRI investor may transact by
- Using the online transaction facility.
- Filling up the Common Transaction Form or by simply filling the details in the transaction slip attached to the statement of the account or transaction slip downloaded from the website and mailing the same to any
of the official points of acceptance of transactions, along with the cheque or the bank draft in case of an additional purchase.
Can I perform the redemption of units and change the bank mandate simultaneously?
No, note that requests for change in bank details cannot be submitted along with redemption request. Redemption payments will be processed and the last registered bank account information will be used for such payments.
Further, if the Change/Updation of Bank Mandate/Multiple Bank registration has been updated within ten days, prior to the submission of redemption request, then the redemption payments will be made to the new bank mandate.
For such cases the payments will be made within the regulatory time limit and the normal scheme specific payment timelines will not be applicable.
What is the Tax implication for NRI investors?
Tax implications on Dividends:
| Equity Schemes | Nil |
| Debt Schemes | Nil |
Dividend Distribution Tax (Payable by the scheme):
| Equity Schemes** | NIL |
| Debt Schemes | 25% + 10% Surcharge + 3% Cess = 28.325% |
| Money Market and Liquid Schemes | 25% + 10% Surcharge + 3% Cess = 28.325% |
Capital Gain taxation
Long Term Capital Gain (Units held for more than 12 months)
| Equity Schemes** | NIL |
| Debt Schemes/other than equity oriented schemes | 10% without indexation or 20% with indexation whichever is lower+3% cess
|
| Without Indexation | 10.300% |
| With Indexation | 20.600% |
Short Term Capital Gain (Units held for 12 months or less)
| Equity Schemes ** | 15%+3% Cess = 15.450% |
| Debt Schemes | 30%^ +3 % Cess = 30.900% (^ Assuming that the investor falls in to the highest tax bracket) |
- The short term/long term capital gain tax will be deducted at the time of redemption of units in case of NRI investors only.
- ** STT@0.25% will be deducted on equity funds at the time of redemption and switch to the other schemes.( take a view from finance or from tax consultant )
- Mutual Fund would also pay securities transaction tax wherever applicable on the securities bought/sold.
TAX DEDUCTED AT SOURCE
| | Short Term | Long Term |
| Equity | 15.450% | NIL |
| Debt | 30.900% | 20.600% (After providing for indexation) |
After an application for investment when will the units be allotted to the NRI?
If an application is received at the official point of acceptance before the specified cut-off time on any business day, the allotment of units at the NAV of the business day shall be applicable, , as per the provisions
of the Statement of Additional Information (SAI)/ Scheme Information Document (SID) of the relevant scheme. All applications
received after the prescribed time will be treated as having been received on the next business day and the units shall be allotted accordingly.
TMF shall send confirmation to the investor whose application has been accepted by way of email and/or SMS’s to the investor’s registered email address and/or mobile number as soon as possible but not later
than five working days from the date of closure of the initial subscription list and/or from the date of receipt of the request from the investors.
AMC shall issue consolidated account statement for each calendar month to the investors in whose folios transaction (s) has/have taken place during the month.
Will TMF accept an NRI application with an overseas bank account detail?
No. Overseas bank account details are not accepted as the payment is in Indian rupees by way of cheque/direct credits.
Who cannot invest in Tata Mutual Fund?
- Overseas Corporate Bodies (OCBs) shall not be allowed to invest in the schemes of Tata Mutual Fund. These would be firms & societies which are held directly or indirectly but ultimately to the extent of atleast
60% by NRIs & trusts in which atleast 60% of the beneficial interest is similarly held irrevocably by such persons (OCBs)
- Residents of United States of America and Canada
Fresh subscription & additional subscription (including by way of switch-in, existing & new Systematic Investment Plan (SIP), Systematic Transfer Plan (STP)) from the above class of investors will not be accepted
from the effective date.
The Asset Management Company reserves the right to include/exclude new/existing categories of investors to invest in the scheme from time to time, subject to SEBI Regulations & other prevailing statutory regulations,
if any.