VR Logo

How are returns from international funds taxed?

International funds are taxed like debt funds, tells Dhirendra Kumar

What kind of taxation is applicable on international mutual fund schemes? Is it better to invest in international mutual fund scheme or should we go for schemes like PPFAS Long Term Equity, which invest some part of their portfolios in the international market?
- Sandeep

International funds are taxed like debt funds. Capital gains are added to your income if the holding period is three years or less. They are taxed after providing for indexation if you sell them after three years. That is the minimum period for which, you should actually hold them. But don't worry about the taxation front.

Parag Parikh Long Term Equity has turned out to be a very impressive fund and it gets you a very focussed international allocation. It looks like a good fund and it should be bought entirely for that reason. But if you are looking to have meaningful international exposure, you will have to take some other route. We have plenty of options to choose from.