Is taxation same for International ETF and International FoF?
For example Mirae Asset NYSE FANG+ ETF and Mirae Asset NYSE FANG+ETF FoF.
Hi @rahul8
International ETFs and FoFs are taxed in the same manner as debt funds @ applicable slab rates without any indexation benefit
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Hi @Meher_Smaran , is there a buy limit on the international funds and the FOFs considering that the new tax law limits the outward remittance to 7L? Or is this taken care already by the ETF or the FoF as the expense ratio?
Thanks.
Is MON100 classified as debt fund or equity fundfor taxation?
I sold my position in it after holding for an year and zerodha has classified the profits as long term gain in its console reports. Ideally debt fund should be classsifed as short term at slab rate. Is that a bug in zerodha or MON100 is classified as equity fund for taxation,
They are treated as debt funds.
Taxation would depend on whether the investment was made before April 1st, 2023. But as you rightly pointed out, Short terms are taxed at slab rates in both cases while Long term gains tax for investments before April 1st, 2023 would be at 20% with indexation.
Will check this once with team
LRS and TDS don’t apply to international funds. You can invest the amount of your choice subject to restrictions from the AMC.
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Hello everyone,
I have a query regarding the taxation of unrealized gains on International ETFs. Currently, I have 1.5L of unrealized gains on an International ETF (MAFANG). I understand that International ETFs are taxed as debt funds in India, which means the gains are subject to the applicable slab rate.
However, I have no other income this year. My question is: if I book the 1.5L profit this year, will I still have to pay tax on it? Since my total income (including the booked gains) will be within the basic exemption limit, do I still need to worry about taxes, or will this gain be exempt?
Looking forward to your advice and insights!
Thanks in advance!
Hey @rahul8,
If this is your only source of income and the total income falls below the basic exemption limit which is ₹2.5L, there will be no tax liability on these gains.
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Interesting tax planning idea here:
For those who have a lower slab rate than capital gains rate (15 STCG or 10 LTCG), it will make more sense to invest in international and debt funds rather than good old equity funds, right?