What is the taxation for Outbound GIFT City MFs?

What is the taxation for Outbound GIFT City MFs?

For the Outbound funds capital gains tax is payable at the fund’s level when they buy and sell foreign stocks based on their holding period. So the NAV is based on the taxes paid by the fund.

Capital Gains Tax that are paid by the fund:

  • Short-term capital gains tax (STCG): 42.74%
     Applicable for stocks held by the fund for < 24 months.

  • Long-term capital gains tax (LTCG): 14.95%
     Applicable for stocks held by the fund for ≥ 24 months.

  • Dividends paid by stocks
    Taxed at 35.88%

The daily NAV is after adjusting for ongoing fund management fees and taxes. Any taxes incurred at fund level specifically on account of investor’s redemption will be further deducted and balance will be credited back.

Info
For more details on outbound MFs, please check out this video. 

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