The taxation on
international mutual funds in India is treated similarly to debt funds. If the
holding period is less than 3 years, the gains are considered as short-term and
are taxed as per the investor’s income tax slab. For a holding period of more
than 3 years, the gains are termed as long-term and are taxed at 20% with
indexation benefits.
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How To Invest In International Mutual Funds:
Investing in
international mutual funds gives investors a chance to diversify their
portfolio beyond domestic markets and tap into the growth potential of foreign
economies. Here is a step-by-step guide to help Indian investors figure out how
to invest in international mutual funds:
Research And Identify the Right Fund:Begin by understanding your investment goals and
risk tolerance. Are you looking for diversification, or are you bullish about a
specific region or sector? Various financial platforms and websites provide
detailed analyses, ratings, and reviews of international mutual funds available
to Indian investors.
Choose the Investment Mode:Investors can opt for a lump sum investment or a Systematic Investment
Plan (SIP). While a lump sum involves investing a significant amount at once, a
SIP allows you to invest a fixed sum at regular intervals, making it more
manageable and harnessing the power of rupee cost averaging.
Open an Investment Account: If you’re a first-time investor, you’ll need to
open an account with a mutual fund house or through an investment platform.
Ensure that the platform or fund house offers the international fund you’re
interested in.
Complete KYC Formalities: Before
investing, you’ll need to complete your Know Your Customer (KYC) formalities.
This involves submitting identity and address proofs, a PAN card, and a
photograph. Many platforms offer e-KYC, making the process seamless and online.
Invest Online Or Offline:With your KYC in
place and account set up, you can choose to invest online through the fund
house’s website, a mutual fund app, or an online
invdestment platform. Alternatively, you can fill out physical
forms and submit them to the mutual fund’s office or collection centers.
Monitor Your Investment:Once invested,
it’s essential to keep an eye on your portfolio. Different things like currency
changes, geopolitical events, and regional economic trends can make
international markets act differently than domestic ones.
Redemption:When you decide
to exit your investment or if you need funds, you can submit a redemption
request. The amount, after accounting for any taxes or exit loads, will be
credited to your bank account.