Respected sir/mam,
I had realised some capital gains on an Indian ETF with direct exposure to US based stocks this Assessment Year 2025-26. It was bought on 23 Jun 2022 and sold on 3rd Mar 2025. With the most recent budget changes, it is a bit vague on the taxation for this and also are such ETFs eligible for long term capital gains tax exemption. Some light on this would be great
Thanks a ton!
These ETFs are classified as "foreign asset" or international funds. The holding period for LTCG is 24 months or more.
LTCG on foreign ETFs for FY 2025-26 is taxed at a flat 12.5% without indexation, as per Section 112 of the Income Tax Act.
The Rs 1.25 lakh LTCG exemption does not apply to foreign ETF gains; it only applies to domestic equity-oriented assets under Section 112A.
If the ETF units are sold before 24 months, gains are considered short-term and taxed as per the income tax slab rate.
Naveen Fintech Pvt Ltd
Kolkata
CA Inter
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Gupta Sachdeva & Co. Chartered Accountants
New Delhi
CA Final
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CAclubindia
