Although international equity funds invest in equity, they are treated as non-equity funds for taxation purposes
10-Apr-2017 •Research Desk
Birla Sun Life has charged a Capital Gains tax at 30 percent on Global Real Estate Fund. I held this fund for more than 1 year and the long term capital gains tax is nil, isn't it?
The beneficial tax treatment on equity funds is only available to the ones investing in domestic equity stocks. Funds that invest in stocks abroad do not carry that advantage and are taxed like a debt fund. We put such funds under the category Equity: International. If you hold them for over three years, long-term capital gains tax at the rate of 20% (with the inflation indexation benefit) is applicable. For a holding period of less than 3 years, you'll have to pay a short-term capital gains tax as per the income tax slab system. The tax applicable on Birla Sun Life Global Real Estate is in line with these provisions.