Published Jun 29, 2026 4 Min Read

Introduction

An onshore fund invests primarily in Indian securities and is managed under Indian regulations. It gives you exposure to domestic markets through professionally managed portfolios while following the regulatory framework set by Indian authorities.

  • Onshore funds invest mainly in Indian stocks, bonds and other domestic securities.
  • You receive mutual fund units based on the applicable NAV, which is calculated after market close each business day.
  • You can invest through SIP or lumpsum, depending on the scheme.
  • SIP investments on the Bajaj Broking website can start from Rs. 100 per month, subject to scheme availability.
  • The Bajaj Broking website provides access to 4,000+ mutual fund schemes across equity, debt, hybrid, ELSS, thematic funds and NFOs.
  • Review the SEBI-mandated Riskometer before investing, as every mutual fund scheme carries a different level of risk.

Complete your KYC, compare suitable mutual fund categories and invest through SIP or lumpsum on the Bajaj Broking website according to your financial goals.

What is an onshore fund?

An onshore fund is an investment fund that invests mainly in assets located within India. These funds are governed by Indian laws and regulations and invest in domestic financial markets.

When you invest in an onshore mutual fund, you receive units based on the applicable NAV (Net Asset Value). The scheme is managed by professional fund managers at the respective AMC, while the Bajaj Broking website acts as a mutual fund distribution platform.

How does an onshore fund work?

An onshore fund pools money from multiple investors and invests it according to the scheme's investment objective.

Depending on the scheme, the fund may invest in equity shares, debt instruments or a combination of both. The value of your investment changes with market performance, and units are allotted at the applicable NAV calculated after market close.

The AMC manages the portfolio, while investors can track their investments through the Dashboard, Portfolio, Orders and MF Profile available on the Bajaj Broking website.

Which types of onshore funds are available in India?

There are different types of onshore mutual funds in India to suit different financial goals.

Fund TypeWhat it invests inRisk LevelSuitable for
Equity FundsShares of Indian companiesHigh to Very HighLong-term wealth creation
Debt FundsGovernment securities and debt instrumentsLow to ModerateRegular income and capital preservation
Hybrid FundsEquity and debtModerate to HighBalanced growth and stability
ELSS FundsEquity securitiesVery HighLong-term investing with tax benefits under applicable tax laws

Always check the SEBI Riskometer, which classifies schemes as Low, Low to Moderate, Moderate, Moderately High, High or Very High risk.

Onshore fund vs Offshore fund – Key differences

Onshore and offshore funds invest in different markets and follow different regulatory frameworks.

FeatureOnshore FundOffshore Fund
Investment locationPrimarily within IndiaPrimarily outside India
Currency exposureMainly Indian rupeesMay involve foreign currencies
RegulationGoverned by Indian regulationsSubject to regulations of the relevant overseas jurisdiction
Market exposureIndian financial marketsInternational financial markets
Currency riskGenerally lowerHigher due to exchange rate movements

The choice depends on your investment objectives, diversification needs and willingness to take additional risks.

How are onshore mutual funds taxed in India (2026)?

The tax treatment of onshore mutual funds in India depends on the fund category, holding period and the applicable tax laws at the time of redemption.

Consider these factors before investing:

Tax factorWhy it matters
Mutual fund categoryDifferent categories may have different tax treatment.
Holding periodTax implications can vary depending on how long you hold the investment.
Capital gainsGains may be taxed according to prevailing tax laws.
Dividend incomeTax treatment depends on the applicable income tax provisions.

Tax laws may change over time. Refer to the latest regulations or consult a qualified tax adviser before making investment decisions.

Who should invest in onshore funds?

Onshore funds may be suitable if you want to build wealth through investments focused on the Indian market.

They may suit you if you:

  • Prefer investing in Indian financial markets.
  • Want exposure to professionally managed mutual fund portfolios.
  • Are building long-term financial goals through SIP or lumpsum investments.
  • Want to diversify across equity, debt or hybrid mutual fund categories.
  • Are comfortable with market-linked returns and the associated risks.

Before investing, complete your KYC, which is mandatory under SEBI regulations. On the Bajaj Broking website, you can invest through SIP or lumpsum, with SIP investments starting from Rs. 100 per month, subject to scheme availability.



What regulates onshore funds in India?

Onshore mutual funds operate under a regulatory framework designed to protect investors and maintain transparency.

OrganisationRole
SEBIRegulates mutual funds in India and mandates the colour-coded Riskometer for every scheme.
AMFIPromotes ethical and professional standards within the mutual fund industry.
AMCManages the mutual fund scheme according to the Scheme Information Document (SID).
Mutual Fund DistributorFacilitates investments for investors. The Bajaj Broking website acts as a mutual fund distribution platform.

Understanding the roles of these organisations helps you make informed investment decisions.

Frequently asked questions

What is an onshore fund?

An onshore fund is an investment fund that primarily invests in securities within India and is regulated under Indian laws. When you invest, you receive mutual fund units based on the applicable NAV. On the Bajaj Broking website, you can explore 4,000+ mutual fund schemes across multiple fund categories.

What is the difference between onshore and offshore funds?

An onshore fund invests mainly in Indian securities and is governed by Indian regulations. An offshore fund invests primarily in overseas markets and may be affected by foreign exchange movements and overseas regulations. The choice depends on your investment goals and preferred market exposure.

What is the meaning of onshore fund in mutual funds?

In mutual funds, an onshore fund refers to a scheme that invests primarily in domestic securities and operates within India's regulatory framework. The portfolio is managed by the respective AMC, while investors receive units based on the applicable NAV calculated after market close.

How do onshore mutual funds work in India?

Onshore mutual funds pool money from multiple investors and invest it in Indian securities according to the scheme's objective. Professional fund managers at the respective AMC manage the portfolio, while investors can invest through SIP or lumpsum. The Bajaj Broking website provides access to 4,000+ mutual fund schemes across different categories.

Are NRIs allowed to invest in onshore funds in India?

Yes. Many NRIs can invest in onshore mutual funds in India, subject to the applicable SEBI regulations, FEMA guidelines, AMC policies and completion of the required KYC process. Eligibility and documentation requirements may vary depending on your country of residence and the chosen mutual fund scheme.

What taxes apply to onshore mutual fund gains in India in 2026?

The tax treatment of onshore mutual fund gains depends on the mutual fund category, the holding period and the applicable tax laws in force at the time of redemption. Since tax regulations may change, you should refer to the latest provisions or consult a qualified tax adviser before investing.

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Disclaimer

Bajaj Finance Limited (“BFL”) is an NBFC offering loans, deposits and third-party wealth management products.

The information contained in this article is for general informational purposes only and does not constitute any financial advice. The content herein has been prepared by BFL on the basis of publicly available information, internal sources and other third-party sources believed to be reliable. However, BFL cannot guarantee the accuracy of such information, assure its completeness, or warrant such information will not be changed.

This information should not be relied upon as the sole basis for any investment decisions. Hence, User is advised to independently exercise diligence by verifying complete information, including by consulting independent financial experts, if any, and the investor shall be the sole owner of the decision taken, if any, about suitability of the same.

Disclaimer

Bajaj Finance Limited ("BFL") is registered with the Association of Mutual Funds in India ("AMFI") as a distributor of third party Mutual Funds (shortly referred as 'Mutual Funds) with ARN No. 90319

BFL does NOT:

(i) provide investment advisory services in any manner or form.

(ii) carry customized/personalized suitability assessment.

(iii) carry independent research or analysis, including on any Mutual Fund schemes or other investments; and provide any guarantee of return on investment.

In addition to displaying the Mutual fund products of Asset Management Companies, some general information is sourced from third parties, is also displayed on As-is basis, which should NOT be construed as any solicitation or attempt to effect transactions in securities or the rendering any investment advice. Mutual Funds are subject to market risks, including loss of principal amount and Investor should read all Scheme/Offer related documents carefully. The NAV of units issued under the Schemes of mutual funds can go up or down depending on the factors and forces affecting capital markets and may also be affected by changes in the general level of interest rates. The NAV of the units issued under the scheme may be affected, inter-alia by changes in the interest rates, trading volumes, settlement periods, transfer procedures and performance of individual securities forming part of the Mutual Fund. The NAV will inter-alia be exposed to Price/Interest Rate Risk and Credit Risk. Past performance of any scheme of the Mutual fund do not indicate the future performance of the Schemes of the Mutual Fund. BFL shall not be responsible or liable for any loss or shortfall incurred by the investors. There may be other/better alternatives to the investment avenues displayed by BFL. Hence, the final investment decision shall at all times exclusively remain with the investor alone and BFL shall not be liable or responsible for any consequences thereof.

Investment by a person residing outside the territorial jurisdiction of India is not acceptable nor permitted.

Disclaimer on Risk-O-Meter:

Investors are advised before investing to evaluate a scheme not only on the basis of the Product labeling (including the Riskometer) but also on other quantitative and qualitative factors such as performance, portfolio, fund managers, asset manager, etc, and shall also consult their Professional advisors, if they are unsure about the suitability of the scheme before investing.


Disclosure
: Bajaj Finance Limited (BFL) is a distributor of Mutual Funds with ARN - 90319 and distributes mutual funds of Bajaj Finserv Asset Management Limited (BFSAMC). BFL receives commission towards distribution of mutual fund products. BFSAMC is a group company of BFL, carrying business on arm’s length basis without any conflict of interest and in accordance with the prevailing law / regulation.