VR Logo

How are NRI MF investors taxed?

In the case of NRI investors the short-term and long-term capital gain taxes will be deducted at the time of redemption

I would like to get an idea on the taxability of the investments made by overseas Indians? Will there be any benefits to them under DTAA between India and the resident country?
- Anubhav Bansal

The short-term and long-term capital gains taxes on mutual funds are the same for Non Resident Indians (NRIs) and Indian investors. The only difference is that in the case of NRI investors the short-term and long-term capital gain taxes will be deducted at the time of redemption. The Double Taxation Avoidance Agreement (DTAA) should help NRI investors to avoid double taxation of the same income in India and their resident country.

Short-term capital gains

Debt: If investments are sold before three years, gains are added to the income and taxed at Income Tax slab applicable to the investor.

Equity: If investments are sold before a year, gains are taxed at 15 per cent

Long-term capital gains

Debt: If investments are sold after three years, gains are taxed at 20 per cent with indexation benefit.

Equity: If investments are sold after a year, nil tax on gains.

Post Your Query