The NRIs are entitled to enjoy tax relief from paying double tax, in India & in the country of residence if India has signed the Double Taxation Avoidance Treaty (DTAA) with the respective country. India has signed this Agreement with the United States so the US-based NRIs need not to pay any taxes if they have already paid taxes in India.
As per the holding period and the asset classes of the mutual fund, it is classified as a LTCG (long-term capital gain) & STCG (short-term Capital gain) for Equity & Debt Mutual Funds.
Please find the Taxation Details below.
- Debt mutual funds-
- Long-term Capital Gain – where period of holding is more than 36 months-
- Long-term capital gains with indexation benefit is liable to 20% tax;
- A long-term capital gain without indexation benefit is liable to 10% tax.
- Short-term Capital Gain- Where period of holding is less than 36 months
- Short-term capital gains are liable to tax @ 30%
- Equity Mutual Funds–
- Long-term Capital Gain – Where period of holding is more than 12 months.
- Long-term capital gains, exceeding Rs 1 lakh are liable to 10% tax.
- Short-term Capital Gain– Where period of holding is less than 12 months
- Short-term capital gains are liable to tax @ 15%.
“Mutual Fund investments are subject to market risks, read all scheme related documents carefully before investing”.