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Taxing International Funds

International funds are taxed like debt funds. The capital gains tax benefit is available only to domestic equities…

I have invested in JP Morgan Emerging Europe Middle East and Africa Equity Offshore and JP Morgan JF ASEAN Equity Offshore. I want to know if their capital gains will be taxed the same way as Indian equity funds or like Indian debt funds.
-Amit Pathak

The capital gains tax benefit available to equities is available only on domestic equity, whether through mutual funds or on direct equity investments. Hence, the two international funds that you have invested in will be taxed like a debt fund.
The short-term capital gains will be subject to 15 per cent tax, while the long-term capital gains will be taxed at 10 per cent flat or 20 per cent after indexation.

This article was originally published on December 24, 2012.

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