Zerodha NRI account: Demat account for Indian Expats

NRIs do not lose their eligibility to participate in the Indian capital markets. While their existing demat and trading accounts can be converted to NRO demat/trading accounts, they must initiate the process afresh to open NRI demat/trading accounts. The benefit of an NRI demat/trading account is that the earnings out of this account are repatriable. This article discusses a comprehensive guide for NRIs to open a Zerodha Demat Account.

📋 Complete Guide to Zerodha Account for NRIs

Can NRIs open a demat account in Zerodha? Overview of Zerodha Demat Account for NRIs Features of the Zerodha Demat Account for NRIs Manage & Operate Zerodha account from abroad How to open demat account in Zerodha for NRIs Overview of the account opening process Documents required Minimum Investment Amount Zerodha NRI Demat account charges Brokerage charges International transfer fees Deposit funds to Zerodha Demat Account from abroad Withdrawing funds from Zerodha Demat Account Tax Consideration for NRIs investing in India Beyond Transfers: Simply your NRI financial life with Wise

Can NRIs open a demat account in Zerodha?

NRIs wishing to trade in the Indian capital markets can open a demat and trading account in Zerodha, one of India’s top depository participants. Zerodha does not offer banking services. Therefore, NRIs must open an NRE account with any of its partner banks and obtain a PIS permission letter before opening an NRE demat and trading account with Zerodha.¹

However, they can open a Non-PIS NRO demat and trading account by linking their NRO accounts in any bank. The primary difference between a PIS and a Non-PIS account is that the NON-PIS accounts only support NRO accounts, not NRE accounts. Secondly, a PIS account allows investments in Portfolio Investment Schemes. However, direct mutual fund investments are available in the Non-PIS accounts, not the PIS accounts.²

Since Zerodha does not offer banking services, NRIs must open their NRE accounts with one of their partner banks from HDFC Bank, IndusInd Bank, IDFC First Bank, Yes Bank, and Axis Bank. So, NRI investors must transfer funds from abroad using regular banking channels into these accounts to trade in the Indian capital markets through the Zerodha NRI demat and trading accounts. Alternatively, they can use Wise for sending money to India.

Overview of Zerodha Demat Account for NRIs

Zerodha offers facilities to NRIs to open demat and trading accounts on their platform. Since they do not offer banking services, NRIs must link their accounts with these demat accounts. NRIs desirous of opening NRE demat accounts must open their respective accounts with Zerodha’s partner banks and obtain the PIS permission letter from RBI.

Zerodha offers two types of demat/trading accounts for NRIs - NRE PIS and NRO Non-PIS. NRIs can open either or both of these accounts simultaneously. For an NRO Non-PIS account, the NRI can link any NRO account with any bank. There is no restriction on opening the NRO account with the partner banks. The advantage of a Non-PIS account is that it allows NRIs to invest in convertible preference shares, debentures, warrants, equity, and mutual funds.³

Features of the Zerodha Demat Account for NRIs

The Zerodha NRI demat account offers the following features and benefits.

• Zerodha brokerage charges are among the lowest in the industry.
• Zerodha is considered the largest stock broker in India in terms of active customers.
• Zerodha offers the most sophisticated trading software and tools.
• Zerodha offers AMO and GTC order facilities.
• While the Zerodha demat account supports NRO accounts with any bank, NRI customers must open their NRE accounts with HDFC Ban, IDFC First Bank, IndusInd Bank, Axis Bank, or Yes Bank.

Steps to manage and operate the Demat account from abroad

NRI customers can operate their demat and trading accounts from abroad. The Zerodha trading process for NRI accounts is detailed hereunder.⁴

PIS Accounts

• Add funds from the linked NRE or NRO accounts to the PIS account.
• The bank reports the PIS balance to Zerodha at the end of the day.
• The balance gets updated in the Zerodha account, allowing you to trade.
• You can place your order and purchase stocks.
• Zerodha sends the “Buy Contract” note to the bank at EOD.
• The bank debits the PIS account and credits Zerodha on T+1 day.
• When selling from the demat account, Zerodha sends a “Sell Contract” to the bank at EOD to calculate TDS.
• The bank account is credited on T+1 day with the sale proceeds less TDS.

Non-PIS Accounts

• You can transfer funds to the Zerodha account directly through payment gateways, NRFT, or RTGS from your accounts.
• The trading process is the same as that of the PIS accounts.

How to open demat account in Zerodha for NRIs

Unlike resident demat accounts, NRI accounts cannot be opened online in Zerodha. However, the NRI can download the application form, fill it out, get it validated, and courier it to Zerodha with the necessary documents. Here is an overview of the account opening process.⁵

Overview of the account opening process, its basic requirements, and application procedure for NRIs

• Visit the Zerodha Official Signup web page.
• Sign up for your demat account by providing your email ID and password.
• Select your residence country and NRI category.
• Enter your name and mobile number with country code.
• Pay the account opening fee - ₹500
• Upload the passport-size photo and PAN, followed by KYC details.
• Enter your bank account details. You must link a PIS bank account to open an NRE-PIS account. Produce the PIS permission letter.
• Submit the FACTA declaration.
• Complete the In-Person Verification process.
• Provide info on the nominee/guardian.
• Submit the form for review.
• Zerodha will review your application within 48 hours. Rectify the errors if pointed out by Zerodha.
• Upon completing the verification process, print the application form, sign it, and courier it with the supporting documents to Zerodha for opening the demat/trading accounts.

Documents required

Submit self-attested photocopies of the following documents with your application form to Zerodha for opening your NRI demat account.⁶

• Account opening form completed in all respects and signed at the relevant places
• Demat Debit and Pledge Instruction form
• FACTA Declaration with Tax Identification Number details
• Declaration of PO Box of your resident country
• FEMA Declaration
• Passport-size photograph
• Client details and declaration form
• Self-attested, notarized photocopy of your passport, PAN card, and address proof (foreign and local, if available)
• Immigration copy if the NRI is in India and submitting the documents in person
• Income proof
• Bank statement, latest salary slip, IT return, Net Worth certificate
• Statement of demat holdings
• Copy of PIS letter if opening an NRE/NRO-PIS account

Minimum Investment Amount

Zerodha has no minimum investment stipulation when opening a demat/trading account. You can transfer funds to the PIS or Zerodha trading accounts whenever you wish to trade in the Indian capital markets.

Small note about FATCA declaration for NRIs based in USA
NRIs must submit the FACTA declaration when opening demat accounts in India. The FACTA declaration prevents US-based NRIs from parking their funds outside the US and avoiding tax compliance.

Zerodha NRI Demat account charges

NRIs must pay the following charges for a Zerodha NRI demat account.⁷

• Account Opening Fees - ₹500
• Account Maintenance Charges - ₹500 + GST @ 18%

Brokerage charges

Zerodha brokerage charges depend on the transaction amount. Here is the complete breakup of brokerage charges. All transaction fees attract GST @ 18%. The details are also available on the application form.

International transfer fees

Zerodha does not charge any international transfer fee from its NRI customers. The NRI customer can transfer funds from abroad to the NRE/NRO account through regular banking channels. The international transfer fee varies from bank to bank. Similarly, the outward remittance fee also varies from bank to bank.

Deposit funds to Zerodha Demat Account from abroad

Using regular banking channels, NRIs can transfer funds from their overseas bank accounts to their NRE/NRO accounts in India. Subsequently, they can transfer money to their PIS accounts by internal transfer. They can also credit their Zerodha trading accounts directly by NEFT/RTGS/payment gateways for their non-PIS transactions.

Alternatively, NRIs can use Wise to transfer funds to their Indian accounts at competitive rates.

Withdrawing funds from Zerodha Demat Account

Similarly, NRI investors can withdraw funds from their Zerodha demat/trading accounts and credit the proceeds to their NRE/NRO accounts. Subsequently, they can transfer the funds abroad using their regular banking channels.

Tax Consideration for NRIs investing in India

Income earned from the Indian capital markets is taxable. So, NRIs must pay income tax on the income earned in India. They can file their returns and claim refunds if eligible. Concessions under various sections of the IT Act 1961 are available if you file your returns under the Old Tax Regime. The New Tax Regime does not offer these concessions.

However, NRIs must be mindful of their tax compliance in their resident country. Many countries have entered a DTAA arrangement with India to avoid double taxation. NRIs can benefit from DTAA. A Chartered Accountant or a tax professional is better qualified to explain the provisions and benefits of DTAA.

You can refer to one of our articles on NRI taxation in India.

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This article is not intended to provide financial, investment or tax advice. Speak to professionals to get the appropriate recommendations for you and your money.

Sources used for this article:

1. Can an NRI open a demat account in Zerodha?
2. Difference between PIS and Non-PIS accounts
3. Overview of the Zerodha NRI demat account
4. Steps to operate the Zerodha demat account from abroad
5. Overview of the Zerodha NRI demat account opening process
6. Documents required for opening Zerodha NRI demat account
7. Zerodha NRI Demat Account Charges

Sources verified on 8 February 2024.