US NRIs investing through parents

Most mutual fund houses in India have stopped accepting investments from US-based NRIs. In such a scenario, can an NRI invest through his/her parents? Are there any legal issues that one needs to be concerned about?
- Partha

We can only offer you a general response on this issue. Theoretically it is possible to invest through your parents. If the parents have a source of income and they pay taxes regularly, they can invest without facing any trouble in India. However, you should be extremely careful and check the US laws before taking a final decision. This especially important because Foreign Account Tax Compliance Act (FATCA) requires US taxpayers with foreign accounts and offshore assets above a certain value to report their assets with their income tax returns. Make sure that everything is legal and maintain a proper record of all your money transactions.

This article was originally published on January 19, 2016.