I had invested in Birla Sunlife Income Plus Growth fund, which I redeemed after 3 years. Fund house deducted TDS at 10% without any indexation benefit stating that this fund is unlisted. What determines this and how to check whether a fund is listed or unlisted?
-Abhay Chauhan
In case of unlisted mutual funds, TDS is applicable for NRIs at the rate of 10% without indexation benefit. Birla Sunlife Income Plus is a debt fund, which means that if you redeem it after 3 years, long-term capital gains tax at the rate of 20% (with indexation benefit) will apply. Therefore, you will still need to pay the balance tax after deducting the TDS which you have already paid.
All open-end funds are unlisted as they do not trade on an exchange. Closed-end funds and ETFs are usually listed and can be traded on a stock exchange.
This article was originally published on September 21, 2016.
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