Income type guide
Mutual Fund TDS
Sell ₹50 lakh of equity MF gains as an NRI: AMC deducts 12.5% LTCG TDS = ₹6.25 lakh. Under the India-Singapore DTAA's pre-2017 grandfathering, that tax can be zero. Under the US treaty, the FTC offsets it. DTAA on MF gains is the single highest-leverage recovery for most portfolios.
For Gulf NRI on Mutual Funds
Default at-source TDS in India: 12.5%. The treaty rate matches India's 12.5% domestic — no DTAA reduction at source. UAE doesn't tax personal income, so there's no home-country tax to credit either. The Indian 12.5% IS your only tax.
Article 13
How it works
What happens to your mutual funds as an NRI
AMCs deduct TDS at the redemption gate under Section 195. (Section 196A applies separately to MF income distributions / IDCW dividends — never to capital gains on redemption.) Equity funds: 12.5% on LTCG above ₹1.25 lakh (holding >12 months), 20% STCG (post FA No.2 2024). Specified mutual funds under Section 50AA (post FA No.2 2024 redefinition, effective 1 April 2026 / FY 2025-26 onwards: funds investing >65% in debt and money-market or FoFs of such) acquired on/after 1 April 2023: ALL gains deemed short-term and taxed at slab regardless of holding period (no 12.5% LTCG path inside 50AA). Other non-equity / non-50AA mutual funds (e.g. Gold ETFs, international FoFs from FY 2025-26): under Section 112 — listed units >12 months → 12.5% LTCG no indexation; unlisted >24 months → 12.5% LTCG; below those → STCG slab. Treaty relief depends on purchase date and country. Singapore grandfathering (pre-April 2017) and Netherlands Article 13 are the biggest windows.
12.5%
Default TDS rate
Varies
DTAA rate by country
Gulf NRI — what changes for you
Country-specific overlay on Mutual Funds
Indian tax IS your only tax
UAE has no personal income tax on individual savings interest, dividends, or capital gains. So the India-side rate (after DTAA reduction) is the FULL tax bite — no further drag in your country. NRE / FCNR exempt-in-India income flows through tax-free both sides. NRO / dividend income gets reduced via DTAA where treaty caps apply (UAE 12.5% on interest; Saudi 5% on dividends; etc.), and that reduced rate is your only cost.
Mutual Funds rates by country
What each country's treaty says
Sorted by savings potential. 0 countries with a DTAA benefit, 31 with the same rate.
Same rate under DTAA (31 countries)
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