General information only. Not investment, tax or legal advice. Naming a fund category is not a recommendation to buy, hold or sell anything. Prem Tax and Accounting Corp is a CPA firm, not a law firm. Rules differ by country and change often: confirm with the official source or a qualified adviser before you act. Read the full notice. Book a 10-minute call.

Mutual Funds in India

Who can invest, which account to use and how money goes back abroad

NRIs and OCI cardholders living abroad may buy Indian funds without a limit. The paying account decides how freely the money can leave. This page covers accounts, the USD 1 million route and Forms 145 and 146.

Prepared by Prem Tax and Accounting Corp. Last checked against official sources on November 5, 2026.

Under India's foreign exchange law (FEMA), an NRI (an Indian citizen living abroad) or an OCI cardholder living abroad may buy Indian fund units with no amount limit. The paying account decides how freely money can come back; our Paying-Account Label Lineup keeps that straight. Rules are cited by name: currently the NDI Rules, 2019, which a draft of 21 July 2026 would replace.

The short version

Money from abroad, NRE or FCNR(B) buys on a repatriation basis; NRO money, resident-era folios and units inherited from a resident are non-repatriation.
Non-repatriation proceeds land in NRO and may leave India up to USD 1 million per financial year (April to March).
Since 1 April 2026, Form 145 (once 15CA) comes before a taxable remittance, and usually a CA's Form 146 (once 15CB) above Rs 5 lakh a year.

Slide show: Who may invest, in four slides

Who may buy
NRIs and OCI cardholders living outside India. An OCI cardholder living in India invests as a resident.
Other foreign nationals
No direct route to fund units was found. The 12 June 2026 change opened listed shares only.
Three accounts
NRE: money from abroad, interest not taxed in India. NRO: India income, taxable interest. FCNR(B): foreign-currency deposits.
Limit and approval
NRO balances, sale proceeds and inheritance leave up to USD 1 million a financial year. More needs RBI approval.

Where redemption money goes

Paid from	Basis	Proceeds go to	Leaving India
NRE, FCNR(B) or money from abroad	Repatriation	Abroad, or an account you choose	No FEMA cap
NRO	Non-repatriation	NRO	USD 1 million a year
Resident-era folio, or inherited from a resident	Non-repatriation	NRO	USD 1 million a year, with proof

Indian tax comes first. Heirs and movers: see heirs and changing residence.

Rules that changed in 2026 FEMA, RBI and tax

1 Apr 2026Forms 145 and 146 replace Forms 15CA and 15CB
12 Jun 2026Listed shares open to any individual living abroad, not fund units
18 Jun 2026NRO to NRE transfers expressly allowed within the USD 1 million

Source: RBI, PIB, Income Tax Department

Invented example, at an invented Rs 88 per dollar: NRO redemption proceeds and an inherited flat's sale proceeds total Rs 8,55,00,000, about USD 971,591, leaving about USD 28,409. Another Rs 30,00,000 moved to NRE is about USD 34,091, so it waits for 1 April or needs RBI approval.

Not settled Whether the designated rupee account rule of 13 June 2026 reaches fund purchases. How banks apply Form 145 to an NRI's own, already-taxed NRO money. Whether the repatriation label survives a return to India.

Mistakes people make

Treating an OCI card as enough while living in India.
Paying from NRO and expecting money to flow back freely.
Filing Forms 15CA and 15CB for remittances after 31 March 2026.

Our checklist

The Paying-Account Label Lineup, for each purchase:

The account that paid: NRE, FCNR(B), NRO or remittance.
The folio's basis: repatriation, non-repatriation, resident-era or inherited.
A running total of NRO money sent abroad this April to March.
Forms 145 and 146 with the bank advice.

Common questions

Can a U.S. citizen without an OCI card buy Indian funds from the U.S.?

No direct route was found: the fund rules name NRIs and OCI cardholders, plus registered foreign portfolio investors. Fund houses add limits; see [fund-house limits](/indian-mutual-funds/india-rules/amcs-that-restrict-us-and-canada/).

Is NRE money free to send abroad?

Yes, with no FEMA cap, though Indian tax applies first.

Does the USD 1 million apply per account?

No, it is per person per financial year across NRO balances, sale proceeds and inheritance. KYC and a PAN come first: [KYC and buying from abroad](/indian-mutual-funds/india-rules/kyc-fatca-and-buying-from-abroad/). Our [Indian CPA page](/indian-cpa/) shows how we help.

Official sources

Keep reading

Please read: general information only

This page gives general information and education about Indian mutual funds and about the tax and reporting rules that may apply to people who hold them. It is not investment, legal, tax, accounting or other professional advice, and it is not a substitute for advice from a qualified adviser, attorney or CPA who knows your facts. Reading it does not create a CPA-client or any other professional relationship with Prem Tax and Accounting Corp. Prem Tax and Accounting Corp is a CPA firm, not a law firm. It does not recommend, rate, sell or manage any mutual fund or other investment, and naming a fund category or product here is not a recommendation to buy, hold or sell it.

Tax and reporting rules differ by country and by person, and they change often: thresholds, rates, forms and deadlines are revised, and agencies, courts and fund companies change how they apply them. We checked the figures against the official sources named on the page on the date shown (last reviewed November 5, 2026), but we do not promise that this page is complete, current or free of errors, and we do not update it the moment a rule changes. Where the rules are unsettled we say so. Fund companies set their own policies on who may invest, and those can change without notice. Past performance does not predict future results, and investments can lose value. Examples are invented and for illustration only.

To the fullest extent the law allows, Prem Tax and Accounting Corp and its owners and staff are not responsible for any loss or decision that results from using this page. Links to government and other websites are for convenience and we do not control them.

This content is copyrighted by Prem Tax and Accounting Corp. Copying it in bulk, scraping it, or using it to train artificial intelligence systems requires our written permission.

Questions about how your Indian funds are reported on a U.S. return? Keshav Agrawal is a U.S. CPA and a Chartered Accountant (CA) from India. We prepare the U.S. side (for example Form 8621, FBAR and Form 8938) and can work alongside your adviser in India, Canada or Europe. We do not sell, rate or recommend any investment. Book a 10-minute call or send us a message.

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Who can invest, which account to use and how money goes back abroad

Who may buy

Other foreign nationals

Three accounts

Limit and approval

Where redemption money goes

Mistakes people make

Our checklist

Common questions

Official sources

Keep reading

Let's talk about your taxes, your business, your plans.