Question

I'm an Indian and plan to invest in Indian Mutual Fund. Can anyone help me with the tax reporting? Do we pay taxes on the gain when we are holding and not selling?

Forum|Forum|1 year ago
December 11, 2024
1 reply
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What do we need to do to report our holdings Irs? How do we ensure that taxes are not applied as long as we hold on to the units. Without selling?

P

pk12_2

Employee

@friends-haran , are the shares listed on US stock market / broker or ONLY in India and with Indian brokerage ? Are you investing directly or though a holding / ? entity ? Should I assume that you are a US person ( Citizen/GreenCard / Resident for Tax purposes ) ?

Generally, assets held for investment are not taxed till disposal. However, there are situations ( facts and circumstances ) wherein, mark-to-market recognition may be required.

Can you answer my questions and tell me more on this ---- you can PM me if you wish ( just NO PII -- Personally Identifiable Information ).

Namaste ji

pk

F

friends-haranAuthor

Thanks PK for the reply. Please find my additional details below

1. I'm a US resident on H1 with Indian Nationality. No green card or US citizen

2. I have investment accounts in the US Rith and 401k respectively.

3. I'm talking about investing in Indian Market by buying Mutual Fund units directly in india through indian amc. Example: Axis Bluechip Mutual Fund managed by Axis Bank Fund Managers.

My question is starting Jan 2025 I am planning to invest directly in Indian Mutual Funds as mentioned above and do not plan to sell any units for the next 15years as I plan to let it grow by compounding , so while filing 2025 taxes do we need to pay any tax on the gains even if I don't sell any units?

Hope this helps, I couldn't find a way to DM you.

P

pk12_2

Employee

@friends-haran you can PM using the little envelope icon on top right of the page.

(a) Unless you stay in the US for a long time --- because when you stay a long time and then leave the USA, you will need to get an "Exit" certificate and that may entail not only paying all due taxes at that time but also pay taxes on gains ( mark-to-market ) -- imputed gain --- of assets held .

(b) Given the uncertainties of the future, you need not worry about possible taxability at time of departure from the USA. Also the exchange rate fluctuation may affect everything. If your long-term goal / plan is to go back to home base, then investing in India with its attractive returns ( Rupee based ) nay be worthwhile.

(c) At the moment only dividends that are paid out will have to be recognized and taxed by the USA. But if only the market value of the shares increase and no dividends are declared then there is no tax to be paid.

Is there more I can do for you ?

Namaste ji

pk