Recently Income Tax Appellate Tribunal (ITAT) Mumbai bench in the matter of Anushka Sanjay Shah v/s ITO, held that capital gains earned by a non-resident (Singapore tax resident) from the sale/redemption of mutual fund units in India covered under Article 13(5) of the India-Singapore DTAA hence same are not taxable in India.
ITAT also relied upon judgement in the matter of DCIT v/s K. E. Faizal where it was held that assessee, who is a resident of UAE for the purposes of the Tax Treaty, STCG arising from sale of units of equity oriented mutual funds and debt oriented mutual funds should not be liable to tax in India in accordance with the provisions of Article 13(5) of the Tax Treaty.
From the current and previous cases, it could be inferred that capital gains earned on the sale of mutual fund units in India by Singapore and UAE residents are not taxed in India.
Further, interestingly, capital gains are also tax-free for individuals in Singapore and the UAE.
Therefore, capital gains earned on the sale of mutual fund units in India by Singapore and UAE residents are not taxable in India as well as in Singapore and UAE.
Having said that, this isn’t tax advice. Cross-border investments can be complex, and how the rules can be interpreted depends on the case to case.
Disclaimer: The above article is meant for informational and educational purposes only, and should not be considered as any investment and financial advice. Articles oasis suggests its readers/audience to consult their financial advisors before making any money related decisions.