Capital beneficial properties tax relevant on any redemption request

NEW DELHI :

I’m a non-resident Indian (NRI) planning to modify from a debt mutual fund to an fairness MF inside an AMC in India (invested a yr in the past). How a lot tax (TDS and capital beneficial properties tax and so on.) is relevant within the case? I’ve no taxable revenue from India and by no means filed ITR in India. Do I have to file ITR in India as soon as switching or redemption is finished? Can I get a refund on tax if deducted?.

—Name withheld on request

Switching inside the similar AMC from a debt fund to an fairness fund is successfully a redemption request. Therefore, though you’ve gotten reinvested the funds, it’s important to pay capital beneficial properties tax on the redemption of your debt mutual fund. Gains from sale of a debt mutual fund which is held for lower than three years are taxed as per regular revenue tax slab charges relevant to the person.

Capital beneficial properties of NRIs are subjected to TDS, due to this fact the AMC will deduct TDS earlier than making a fee to you in the direction of redemption. In case your whole revenue is under the minimal exemption restrict you may select to submit a declaration to the AMC together with a certificates out of your revenue tax officer {that a} decrease or nil fee of TDS needs to be utilized. Else you may file an revenue tax return in India and search a refund of TDS in case your whole revenue is under the minimal exemption restrict. Income tax return is filed when a monetary yr ends for the sale/redemption made by you in the course of the yr which begins on 1 April of 1 yr and ends on 31 March of the next yr.

Is dividend on shares for NRI, which is 20% and deducted by the corporate granting, refundable by the IT division or not?

—Name withheld on request

Dividend paid by an Indian firm is taxable in India within the arms of the shareholders. Where the shareholder is non-resident in India for tax functions, dividend revenue is taxable at 20% (further cess and surcharge as relevant). Therefore, earlier than making a fee to you an organization shall deduct TDS on the fee specified above. In case a double taxation avoidance settlement exists between the nation of your residence and India, TDS could also be deducted at a decrease fee. If your whole revenue in India is under exemption restrict, you could file an revenue tax return and search refund of the TDS deducted.

Archit Gupta is founder and chief govt officer, ClearTax. Queries and views at mintmoney@livemint.com

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