When mutual funds are redeemed by NRIs, it can be done by them directly or they can also do it through a POA. When the fund is redeemed, the rules of capital gains will apply in the same way as in the case of resident Indians. We will look at the subject of capital gains in greater detail in the subsequent section. Your redemption credit will be based on whether the investment came on Repatriable basis or non-Repatriable basis.

For example, if you have invested from an NRO account, then the redemption will only be credited into the favour of that particular NRO account. If you invested by debit to your FCNR or NRE account then the redemption proceeds will also be credited to the same account.

However, in case of NRI / FCNR investments, you can opt for redemption into your NRO account.