Income Tax Reckoner for NRIs for Investment in Mutual Funds

Breif Snapshot of Tax Rates specific to Mutual Funds for the Financial Year 2011 -12
Dividend on MF Investment
Equity Mutual Funds - Tax Free
Debt Mutual Funds - Tax Free 


Dividend Distribution Tax (payable by the Scheme) w.e.f 1st June 2011
Equity Mutual Funds - Nil
Debt Mutual Funds - 12.5% + 5% Surcharge + 3% cess = 13.519%
Money Market and Liquid Mutual Funds - 25% + 5% Surcharge + 3% cess = 27.0375%


Capital Gain Taxation
For Long Term Capital Gains (Units held for more than 12 months)
Equity Mutual Funds - Nil
Debt Mutual Funds - 10% Without Indexation or 20% with Indexation (+3% cess), whichever is lower***


For Short Term Capital Gains (Units held for less than 12 months)
Equity Mutual Funds - 15% + 3% Cess = 15.45% * 
Debt Mutual Funds - 30% +3% Cess = 30.9% 

TDS Rates for NRIs
Equity Mutual Funds - In case of Short Term Capital Gain - 15.45%*  & Long Term Capital Gain - Nil
Debt Mutual Funds - In case of Short Term Capital Gain - 30.90%  & Long Term Capital Gain - 20.6%**


*Subject to NRI having Permanent Account Number in India
**After providing for Indexation.
*** Theses are tax rates applicable to capital gains, in case the rate of tax is lower than 20% and if the NRI does not have a PAN, then for the purpose of TDS, the withholding tax rate would be 20%


Note : STT @0.25% will be deducted from equity funds at the time of redemption or switch to other schemes.