Sale of mutual funds by an NRI

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An Indian resident who became an NRI in 2020 inherited mutual funds from her late husband. She transferred and redeemed these funds in 2023. The query concerns whether she needs to pay capital gains tax in India and if she can use a savings account or must open an NRO account for the sale proceeds. The advice given is that as an NRI, she can only maintain NRO and/or NRE accounts for such transactions.

DIVYESH JAIN

DIVYESH JAIN (Querist)
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03 June 2023 Dear Sir,

One of my client who is an Indian resident has become an NRI in the year 2020 after shifting to USA. Her husband who was an Indian resident expired few years back and was having mutual funds in his name.

The wife transferred all the mutual funds of her husband in her name in 2023 as she was the nominee and redeem the funds.

My query is since the wife has earned income in India she has to pay capital gain tax in India. Is it ok for her to maintain a saving bank account or she has to open NRO account to take the sale proceeds of mutual funds.

Please help me in this matter.