Your AMC Is Taking More Than It Should. Here's the Fix.

When you redeem mutual fund units at a profit, your AMC (the company managing the fund — HDFC AMC, SBI MF, etc.) deducts TDS before crediting proceeds to your account.

For equity mutual funds:

For debt mutual funds:

These are the DEFAULT rates. Your DTAA treaty might say something very different.

This is where it gets exciting. Several DTAAs treat mutual fund capital gains under the “shares” or “residual income” article, which can result in taxation ONLY in your country of residence.

Singapore: Under Article 13, capital gains on shares are taxable only in the resident country. Since Singapore has no capital gains tax, this means 0% on both ends. Your equity MF gains could be completely tax-free.

United Kingdom: Article 13 similarly gives taxing rights to the UK only. UK does tax capital gains, but you claim Foreign Tax Credit for any India TDS.

Netherlands: The India-Netherlands DTAA has an exceptionally powerful residual article (Article 22). MF gains that don't fall under the specific capital gains article may be taxable only in Netherlands. Combined with Dutch tax rules, effective rates can be very low.

These aren't loopholes. These are the treaty provisions India agreed to.

Same process as any DTAA recovery:

1. Get your TRC + File Form 10F

2. Download your 26AS — it'll show the AMC as the deductor with the TDS amount

3. File ITR claiming the DTAA rate on your MF gains

4. The difference between deducted TDS and treaty-rate TDS comes back as a refund

For future redemptions, you can submit your TRC and Form 10F directly to the AMC. Some AMCs accept this and deduct at the lower rate going forward. Others are more conservative and deduct at default rates regardless — in which case, you recover through ITR.

Either way, the money comes back. Prevention is faster, but recovery works too.