Yes it is accounted but what I mean is that it doesn’t change how much the underlying shares are worth
But yeah there could be different ways of accounting.
I recommend to check historical data for FLXI vs QDV5
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Wish I had known before. Got redemption and TDS deducted. Talked to CA and have been told that ITO will side with Revenue department no matter what. The point of relief ( i.e. tax refund will happen, if at all) may come at the second level -CIT Appeals or at the third level - ITAT.
I quickly checked and both the India-Switzerland and India-UAE cases went up to ITAT level.
These cases happened some years back
I hope by now, tax office know the law. With two judgements clearly stating this and multiple online forums constantly talk about it (specifically for UAE)
Good luck for your refund. It would be great if you can report back on this thread how did it go. I assume I would be around April or so.
After I read about this drama , I got discouraged about using Indian MFs because I feel at some point a lot of bureaucratic process need to be handled to avail Tax free CGT because it’s not very normal for Indian context that MF investment can be tax free for someone
If more and more such redemptions will happen, the process at tax office might also improve
Having dealt with the Indian tax authorities professionally in the past, I wouldn’t hold out too much hope for this. I’ve had tax cases open for over a decade and gone through appeals and court. I’m convinced their strategy is just to wear you out and out-last you even when they have a losing case.
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In my view, if they don’t want to give an investor the tax benefit then just change the law. What’s the point of law and then make it tough for people to avail benefit
Anyways. For me, I am not counting on the benefit. If I get it , great. Otherwise it’s still slightly better versus FLXI
I’m not sure if it is the case in India, but in the past, some employees in tax offices were incentivised on tax adjustments they made (i.e. paid more when they recovered more taxes) so they aggressively fought against deductions etc. I’ve also seen cases where shortfalls in local budgets led to requests for more tax revenue. One tax inspector in another country even said “I couldn’t find anything wrong with your tax return, but we need 40k more tax. You find where to adjust it appropriately.”
I’m curious, which country was this?
Russia.
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Court again upheld the tax exemption for NRIs for mutual fund investments in India .
It’s interesting that even after losing three times in court over last 20 years, Indian tax office continues to pursue this
Link to -: Case ruling
Because no one will take responsibility of any relief to the tax payer even if it is legal. Take the tax and let the tax payer keep appealing to higher authorities for relief.
It’s a pity. Because it always creates a hassle for investor to claim tax relief. If tax office blocks the tax return then investor need to file a court case and this is not convenient because you need to hire a lawyer etc and maybe even appear personally.
Due to this „scrutiny „ possibility I am not inclined to invest bigger amounts in Indian MFs even though they can be tax advantaged (CH IN DTAA).
In addition, there are some calls to block this „loophole“ because locals are paying more tax than NRIs for basically investing in stocks (Mutual fund exempted but ETFs & stocks not)
Not sure where this goes.
One possible solution would be to tax the capital gains on NRO accounts while not taxing gains on NRE accounts - you know the difference. But even this minor level of subtlety would be too much for Indian tax system to implement. The dear Finance minister will rather be inclined to implement 20/30/ or even 50% TDS on anything NRI and then let the tax payer suffer though circles of Indian tax hell.
I think legislation might move towards tax credit vs tax exemption process. In this way if NRI is living in zero tax country, they will still pay the tax in India
I have a question for you.
Since you have Parag Parikh fund, did you already setup with AMC to reduce TDS to zero using DTAA?
I have done it for ICICI AMC but was not sure if PPFAS also supports DTAA related zero TDS setup
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