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NRI in UAE: Claiming Capital Gains Exemption on Mutual Funds Bought in India

Vipul

Vipul Bhavsar  |22 Answers  |Ask -

Tax Expert - Answered on Feb 20, 2025

Vipul Bhavsar is a chartered accountant from The Institute of Chartered Accountants of India. He has over 16 years of experience in corporate advisory, taxation and financial reporting.
His interest areas are consulting, income tax, GST and due diligence.
He founded his CA firm, V J Bhavsar and Associates, in 2010 through which he offers services like virtual CFO, trademark registrations, company /LLP formation, MIS reporting, audit, tax and TDS compliances, accounts receivable/payable management and payroll processing.... more
Tarun Question by Tarun on Dec 29, 2024Hindi
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Hi I am an NRI in UAE for last 4 financial years. Can I claim capital gains exemption for Mutual Funds bought in India earlier when I was resident Indian under UAE India DTAA by furnishing UAE TRC and filling form 10F? I intend to sell the funds in current FY when I am a tax resident of UAE

Ans: Since the MFs are being held and sold in India, you are liable to pay tax on the capital gain @ 12.5% (On exceeding Rs 1,25,000 gains)
DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Users are advised to pursue the information provided by the rediffGURU only as a source of information to be as a point of reference and to rely on their own judgement when making a decision.
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Ramalingam

Ramalingam Kalirajan  |8027 Answers  |Ask -

Mutual Funds, Financial Planning Expert - Answered on May 12, 2024

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Thanks a lot for your quick reply. Few queries: 1) If I understood correctly, I will have no additional taxation if I am selling the Shares and Mutual fund, once I am in Resident Indian status and a LTCG of 10% will be cal calculated. But I was planning to invest in ETF in which I will be doing Swing trading, I wanted to know what is the tax implication on that being an NRI? 2) NRE FD is good option with tax free investement , but I came across the term that if your NRI status changes to resident , the resident interest rate and taxation will be calculated. This becomes a loss for me if I change my status in 1-2 years. I was thinking to invest in FD of small finavlce banks with 9% interest. Anyways taxation is 10% above 40000 interest earned. Your suggestions please. Thanks
Ans: Tax Implications on ETFs and Swing Trading: As an NRI, any income earned from securities transactions in India, including ETFs and swing trading, is subject to taxation. Short-term capital gains (STCG) from equity investments held for less than one year are taxed at 15% plus applicable surcharge and cess. However, if you become a resident Indian again, you'll be taxed as per the resident Indian tax laws, which include LTCG tax of 10% on equity investments held for over one year. It's essential to consult with a tax advisor to understand the specific implications of swing trading on your tax liability as an NRI.

NRE FDs vs. Small Finance Banks FDs: NRE fixed deposits offer the advantage of tax-free interest income and full repatriation of funds, making them an attractive option for NRIs. However, you rightly pointed out that if your residential status changes to resident Indian within 1-2 years, the interest rate and taxation will be recalculated based on resident rates. In such cases, investing in FDs of small finance banks with higher interest rates can be a viable alternative. While the interest earned above ?40,000 is subject to a 10% TDS, it's essential to consider factors like liquidity, safety, and the bank's credit rating before investing. Evaluate the interest rate differential and potential tax implications to make an informed decision based on your financial goals and risk tolerance.

Considering your investment horizon and financial objectives, it's advisable to consult with a financial advisor or tax consultant who can provide personalized guidance based on your specific situation and help optimize your investment strategy.

Best Regards,

K. Ramalingam, MBA, CFP,
Chief Financial Planner,
www.holisticinvestment.in

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Ravi

Ravi Mittal  |536 Answers  |Ask -

Dating, Relationships Expert - Answered on Feb 21, 2025

Asked by Anonymous - Feb 01, 2025Hindi
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I (30M) have been in the process of Arranged Marriage, screening prospective matches. Out of all the Women I'd met, there's this one Woman (28F) with whom I'm able to get along quite well. She's quite good in almost all aspects such as Appearance, Personality, Education, Career, Social & Emotional Intelligence etc. and our Interests & aspirations for Future, also align to a great extent. It seems Feasible that we build a Life together. Even she seems to be interested in me. But there's one major problem. She doesn't seem to be Trusting me well enough to open up to me, completely. We've interacting with each other since a Few Months, over Social Media, WhatsApp Messages, Phone Calls & even met each other personally on several Dates & spent good time together, understanding each other. We've discussed almost all the important aspects required for leading a Fruitful Married Life, such as, Finances, Family Affairs, Children, Future Plans in terms of Career & Personal Life, Our Travelling Bucket Lists etc & we seem to be quite compatible on almost all these aspects. But there's one aspect that she's not willing to Share with me openly. That's about her Past Relationship(s) & Sexual History. I had brought up this topic for the first time on a Date, when we'd spent over a Month in Courtship & were meeting each other in person for the 5th time. I started off by telling her that I had not been involved in any Romantic Relationship(s) either Serious or Casual, during my College Years or in my Early to Mid 20's as I had been going through a lot struggles, during that Age and I had started meeting up with Ladies only since the past 2-3 Years, after I was settled well in a stable Career & got Serious about Marriage. And obviously, I am a Virgin. When I asked her to share about her Past, she excused herself & left, abruptly ending our Date. I understood that she might not be feeling comfortable with opening up at this stage. I profusely apologized if I'd crossed my Limits, unknowingly & asked her to meet up for another Date, after a week, wherein I Reassured her that whatever is discussed between the both of us regarding sensitive personal matters, shall only remain between the both of us & need not be shared with anyone else (including Parents). She agreed with me but still didn't open up about her Past. I waited Patiently giving her few more weeks' time to open up as per her Convenience, but she never did. Whenever I brought up this sensitive topic again, she'd either change the Topic or make some Excuse to Leave, ending our interaction abruptly. I still maintained Patience & kept Reassuring her gently, that I want to know about her Past, not to Judge her, but only to understand her better. Still she seemed reluctant to open up about her Past, but is actively conversing on any other Topic. The last time we'd met personally was on a Dinner Date, a week ago. When I gently raised the Topic again, she seemed to get somewhat irritated & asked me "How does my Past, really matter to you?" I Replied that it is very much important for me to know everything about her Past, to be able to Trust her completely & take the Relationship ahead and once again I reminded her of both my Promises that I would listen to her with empathy & understanding without Judgement and that I would maintain utmost Secrecy with Respect to her Sensitive Personal Matters. Still she seemed avoidant about the Uncomfortable Conversation & tried to Gaslight me as if I'm Disrespecting her Personal Boundaries. Our Date ended on an unpleasant note & since then our Interaction over WhatsApp has been just minimal. I don't understand what's the matter with her, she never Shied away from discussing any other Important topic & communicated her views, quite effectively, giving me the Impression that she's a Matured Person, but I don't understand why she's so reluctant to open up on this Important topic, in spite of repeated Reassurances from my side. Please advise me, how do I proceed with this Sensitive issue? I am very much into her & wouldn't want to throw away such a Wonderful prospect as we seem to be getting along, quite well, with each other. At the same time, I feel the need to know everything about her Past Relationship(s) including her Sexual History, so that I can be sure about certain things, which greatly matter to me. My Gut Instinct refuses to Trust & Accept her completely, without this missing piece of Jigsaw Puzzle. I'm in great Dilemma now, any Qualitative Advice from Experienced People would be greatly appreciated.
Ans: Dear Anonymous,
I understand your concerns but it might be nice if you understand her concerns as well. While most people promise to neither judge nor share sensitive details, they rarely keep their promise, especially when the experiences are coming from a woman. Her reluctance about sharing her past with you might be stemming from the same.
To be honest, the past should not matter as much as the present but since it is important to you, I would recommend you open up about it directly to her, expressing how her not opening up is stopping you from trusting her completely. If she still does not want to talk about it, I don't see any scenario where it would be the right choice to push her about it again. You have only met her and things are yet to be official. In that case, you should rethink this alliance. Secrecy might be important to her as much as knowing every detail is important to you. Neither is wrong here. Do not rush into any conclusion and speak to her first. Meet up exclusively for this discussion and see where things go from there.
Hope this helps

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Ravi

Ravi Mittal  |536 Answers  |Ask -

Dating, Relationships Expert - Answered on Feb 21, 2025

Asked by Anonymous - Jan 22, 2025Hindi
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I & my Girlfriend (both Aged 25), often Drink Socially. We both have an Understanding between us, that neither of us, would Drink with anyone else or at any Social Event, wherein both of us are not present together. We both agreed mutually, that we must only Drink together, either just by ourselves or at any Social Events, which both of us are attending together. This Unwritten Rule extends even to Get-togethers, with our Respective Families, Friends & Colleagues (including Office Parties), as we both may not always be together in all such Events. But Recently, I'd found out that my Girlfriend has breached our Agreement. She was attending an Office Party at a Night-Club, along with her Colleagues & there she got excessively drunk (upon her Colleagues' insistence) & Danced with them, rather wildly. I saw the video of her Drinking & Dancing with her Colleagues (including some Male Colleagues)... on one of her Colleague's Instagram. When I confronted her, she started crying that it was her Colleagues who insisted her to Drink beyond her usual limits & she was not completely in her Senses. She vaguely remembers Dancing with some of her Colleagues but has no Recollection of what happened later that night. Apparently she had crashed at a Colleague's Apartment along with some others & woke up late, the next Morning, to see most of her Colleagues, who'd Partied along with her, Knocked out & sleeping all over the Apartment, Male & Female Colleagues, together on the same Bed & Couch (she doesn't Remember anything that happened during the Night). I was deeply Disturbed by what she'd done & also by what else might have Happened that Night, which I am unaware of. I wanted to Break-up with her, then & there, but she kept Crying & Pleading me to Forgive her. Now it has become very Difficult for me to Trust her again. Whether her Behaviour counts as Cheating or not? Whether I'd be Justified in Break-ing up with her, over this incident? Or am I Being Unreasonable, due to Over-Thinking? Please give me some advice on how to proceed with this.
Ans: Dear Anonymous,
I understand it is very difficult to deal with situations that do not offer clarity or closure. First of all, you are doing great. You did not rush to any conclusion or decision. Kudos to that. Give her some time to remember. I know it was wrong of her to break a mutual arrangement, and worse, she put herself in a risky situation. Whether this counts as cheating or not depends on your personal boundaries- there really isn't just one definition for it. The real issue here is whether you will be able to move on from this event and trust her, without this causing repeated conflicts in your relationship. If that is also concerning you, then breaking up is justified.
However, if you think you care for her still and believe that she regrets the choices she made, you can rethink about giving the relationship another chance. After all, there is no proof that she has done anything else other than breaking a promise (which is not trivial either). But before making any decision, have an open discussion about trust and how to rebuild it in your relationship.

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Rajesh Kumar Singh  |78 Answers  |Ask -

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DISCLAIMER: The content of this post by the expert is the personal view of the rediffGURU. Investment in securities market are subject to market risks. Read all the related document carefully before investing. The securities quoted are for illustration only and are not recommendatory. Users are advised to pursue the information provided by the rediffGURU only as a source of information and as a point of reference and to rely on their own judgement when making a decision. RediffGURUS is an intermediary as per India's Information Technology Act.

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