Is the tax deducted at source for NRI investments?
As per the Finance Act 1999, tax will not be deducted from income distribution in the form of dividends to unit holders. However, tax will be deducted on any capital gains. In respect to short-term capital gains, that is gain on sale of investments held for less than twelve months, tax is required to be deducted at source at the rate of 30% if the unit holder is a non-resident non-corporate and at the rate of 48% if the unit holder is a foreign company as per the provisions of Section 195 of the Indian Income Tax Act, 1961. Under Section 2(42A) of the Act, a unit of a mutual fund is treated as long-term capital asset if the same is held for more than twelve months. Tax is deductible at source @ 20% on capital gains arising from transfer of a long-term capital asset. The benefit of indexation is available in respect of long-term capital gains. As per the judicial decisions of courts, in case of remittance to a non-resident of a country with which a Double Taxation Avoidance Agreement (D
As per the the Finance Act 1999, tax will not be deducted from income distribution in the form of dividends to unitholders. However, tax will be deducted on any capital gains. In respect to short-term capital gains, that is gain on sale of investments held for less than twelve months, tax is required to be deducted at source at the rate of 30% if the unitholder is a non-resident non-corporate and at the rate of 48% if the unitholder is a foreign company as per the provisions of Section 195 of the Indian Income Tax Act, 1961. Under Section 2(42A) of the Act, a unit of a mutual fund is treated as long-term capital asset if the same is held for more than twleve months. Tax is deductible at source @ 20% on capital gains arising from transfer of a long-term capital asset. The benefit of indexation is available in respect of long-term capital gains. As per the judicial decisions of courts, in case of remittance to a non-resident of a country with which a Double Taxation Avoidance Agreement (
