Simmy Antony asked on 16/11/2020

What is the TDS rate for Mutual Funds? If I am taxed at 15% (TDS) for Equity STCG and if I fall in the 0% tax rate slab, will I be eligible for a refund?

answered on 16/11/2020

The tax on Mutual Funds will be deducted on the format for TDS for an NRI. There are no separate rates for TDS. For an NRI investing in Mutual Funds in India, the gains are pre-taxed (TDS) before they are received in the bank account of the NRI.


Is NRI eligible for refund on TDS?

For non-residents, basic exemption limit can be availed only against incomes that are chargeable at normal slab rates applicable to individuals. STCG on listed equity shares and equity oriented mutual funds is taxed at special rate of 15%, irrespective of the tax slab that the individual falls in. Non-residents CAN NOT avail basic exemption limit against such incomes.


Hence, NRIs are liable to pay tax on such incomes @15% irrespective of the tax slab they fall in. This tax gets deducted at source, and is NOT refundable to NRIs.


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