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 (purchased on or after 1 April 2023):

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

Several DTAAs have historically treated mutual fund capital gains under the "shares" or "residual income" article, which could result in taxation only in your country of residence. The landscape here has changed since 2023, so read carefully.

**Singapore:** Under Article 13, capital gains on Indian shares were historically taxable only in the resident country. The Third Protocol (effective 1 April 2017) gave India the right to tax gains on shares acquired on or after that date. Only pre-April 2017 holdings are grandfathered and remain exempt. A Singapore NRI holding Indian MFs acquired after 2017 does NOT get a 0% exemption.

**United Kingdom:** India retains the right to tax capital gains on Indian shares. UK residents pay India tax on these and claim Foreign Tax Credit in the UK. Interest (15%) and individual portfolio dividends (10% general; 15% only for REIT-style property-vehicle dividends) are where UK NRIs get real DTAA recovery.

**Netherlands:** Article 13 + Article 22 residual clauses historically supported an exemption argument. The Indian Supreme Court's 2023 Nestlé SA ruling narrowed this significantly. CBDT has not issued the enabling notification, and AO-level refund claims on this basis are being denied. The argument is still legitimate but contested; treat it as a case-by-case conversation with a CA, not a guarantee.

These aren't loopholes. They're treaty provisions India agreed to, now being interpreted more restrictively than they used to be.

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 from the next credit. 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.