Singapore residents can pay zero Indian tax on Indian mutual fund gains

Singapore imposes no capital gains tax under its Income Tax Act 1947, so the only question is whether India can tax the gain. For gains on Indian mutual fund units, a recent Tribunal ruling says it cannot.

The reason is a distinction the India-Singapore treaty draws between shares and other property. Under the 2016 protocol, effective 1 April 2017, India can tax a Singapore resident's gains on shares of an Indian company bought on or after that date, while shares bought before it stay grandfathered and taxable only in Singapore. But mutual fund units are not shares: an Indian mutual fund is a trust, and a unit is issued by the trust, not by a company. So units fall outside the shares clauses and into the treaty's residual article, Article 13(5), which gives the right to tax only to the country of residence, Singapore.

In Anushka Sanjay Shah, decided by the Mumbai Tribunal in 2025, the Tribunal held exactly this for a Singapore resident with about 1.35 crore rupees of gains across equity and debt funds: units are not shares, they fall under Article 13(5), and the gains were not taxable in India. This covers your units whatever their purchase date, so there is no 1 April 2017 cut-off for fund units, unlike for direct shares.

One caution: this is a Tribunal decision, not settled statute, and the department can appeal, so it rests on you being a genuine Singapore resident with a real holding. Direct shares of an Indian company do still follow the 2017 grandfathering.

For fund units the claim is a treaty position, not a grandfathering exercise, so the date you bought them does not matter.

1. **Get your TRC from IRAS** at mytax.iras.gov.sg. Free, digital, takes about a week.

2. **File Form 10F** on incometax.gov.in with your Singapore tax details. It becomes Form 41 from FY 2026-27.

3. **File your ITR** reporting the fund gain and claiming it is taxable only in Singapore under Article 13(5). The fund house deducts TDS on redemption under Section 195, so this is how you recover it.

4. **Be a genuine resident.** The position depends on a real Singapore residence and a direct holding. In Tiger Global (Supreme Court, January 2026) the anti-avoidance rules reached a conduit structure despite a pre-2017 acquisition, so a paper arrangement is at risk even where the dates look right.

5. **For past years**, you can file a condonation of delay under Section 119(2)(b) for up to five past assessment years (CBDT Circular 11/2024).

Direct shares of an Indian company are different: only those bought before 1 April 2017 are grandfathered, and post-2017 shares carry the normal 12.5% Indian LTCG. And the steadiest saving for a Singapore resident is on income, not gains: the treaty cuts Indian tax on your interest, from 30% to 15%, and on your dividends, from 20% to 15% for an individual, every year, with no date cut-off.

The strong version of this, that fund-unit gains are outside Indian tax under Article 13(5), rests on Tribunal decisions rather than a Supreme Court or statutory rule, so it is a well-reasoned position, not a certainty, and the department can appeal. It depends on you genuinely being a Singapore resident.

Debt fund units are treated the same way on the units-are-not-shares logic, and the leading Tribunal case covered both equity and debt funds. Direct shares of an Indian company are the opposite: India can tax post-2017 shares, and only pre-2017 shares are grandfathered.

So for fund units the answer is a confident but Tribunal-based yes; for direct shares it is date-dependent; and for the everyday saving, look to the treaty rates on your interest and dividends. Our Singapore-focused CAs handle the claim and keep your Indian side clean.