Indian taxation of foreign equity

6 min · For educational purposes only

Foreign listed equity is treated as an unlisted asset for Indian capital gains purposes. The holding period and rates are different from what you're used to with domestic stocks.

Holding period and rates

Long-term (held >24 months): 12.5% LTCG without indexation (post-July-2024 rules)
Short-term: taxed at your slab rate
Dividends: taxed at slab rate, with FTC for foreign withholding
Currency gains: built into the rupee cost vs rupee sale calculation

Foreign funds and ETFs

Indian residents investing in foreign-domiciled equity funds are taxed similarly — 12.5% LTCG after 24 months. Debt-oriented foreign funds follow the post-April-2023 debt regime: all gains are slab-rate income with no LTCG benefit, regardless of holding period.

Funds domiciled inside the IFSC have their own treatment that depends on whether they are Cat-I/II/III AIFs and on the underlying portfolio. Always confirm classification with the fund's tax memorandum.

Key takeaways

Foreign equity LTCG = 12.5% after 24 months.
Foreign debt funds taxed entirely at slab post-April-2023.
IFSC AIF taxation depends on category and underlying — read the tax memorandum.