NRIs in Singapore: How to Avoid Capital Gains Tax on Indian Mutual Funds through the India–Singapore Tax Treaty

If you’re an NRI living in Singapore and have invested in Indian mutual funds, you may be able to save a good amount on taxes.

India and Singapore have a tax treaty in place (DTAA) that allows eligible NRIs to avoid paying capital gains tax in India when redeeming mutual funds—if certain conditions are met.

This benefit is allowed under the treaty and is completely legal. In this guide, we’ll explain how the treaty works, who qualifies, and how you can claim the exemption and file your income tax return in India properly.

What is the India–Singapore DTAA?

The Double Taxation Avoidance Agreement (DTAA) between India and Singapore is designed to make sure the same income isn’t taxed in both countries. According to Article 13 of this treaty, capital gains from selling shares, units, or mutual funds are taxed only in the country where the person lives.

Since Singapore doesn’t tax capital gains for individuals, many NRIs living there may not have to pay any tax on mutual fund profits in either country—if they claim the benefit the right way.

Who Can Claim This Tax Exemption?

To be eligible for this benefit, you must:

• Be a Non-Resident Indian under Indian tax laws (usually by staying outside India for 182 days or more in a financial year)

• Be a tax resident of Singapore in the same financial year in which you earn the capital gains

• Not have a fixed business place or office (known as a permanent establishment) in India

Now, let’s look at how to claim this exemption step-by-step.

How to Claim Capital Gains Tax Exemption Under the India–Singapore DTAA: A Simple Guide

Step 1: Get a Tax Residency Certificate (TRC) from Singapore

This is the most important document you need. A TRC from Singapore’s Inland Revenue Authority (IRAS) proves that you are a tax resident of Singapore.

To apply:

• Visit the IRAS website

• Click on “Apply for Certificate of Residence”

• Fill in the online form

• Upload any required documents (e.g., income proof, address proof, PAN if available)

• Submit your request

The certificate is usually issued within 7–10 working days. There’s currently no fee for this.

Step 2: Submit Form 10F on the Indian Income Tax Portal
Form 10F is a short form where you confirm your name, country of residence (Singapore), tax ID (usually your NRIC), and declare that you don’t have a permanent establishment (like a business office) in India.

Log in at incometax.gov.in using your PAN and fill out Form 10F online.

Step 3: Write a Self-Declaration Letter
In this one-page letter, you should state:

• You are a tax resident of Singapore for the relevant year

• You have no permanent business base in India

• You are claiming tax exemption under Article 13 of the India–Singapore DTAA

Step 4: Submit All Documents to the Mutual Fund Company or Their RTA
Send the following to your mutual fund house or its Registrar and Transfer Agent (like CAMS or KFintech):

• Copy of your Singapore TRC

• Filled Form 10F

• Self-declaration letter

• PAN and passport copy if requested

This ensures:

• No tax is deducted at source (TDS) when you sell your mutual funds, or

• You can easily claim a refund later by filing your return

Step 5: File Your Indian Income Tax Return (ITR)
Even if your gains are exempt, it’s good practice (and often required) to file your tax return in India.

Use ITR-2 and report the following:

• Capital gains under the “Exempt Income” section

• TRC and DTAA reference under Schedule TR

• Singapore residency under Schedule FA

If tax was already deducted, you can claim a full refund based on the DTAA benefit.

Example: How Much You Can Save
Suppose you earned ₹6,00,000 in capital gains from Indian mutual funds.

• Without DTAA, TDS may be deducted

• With the right documents, TDS may not apply

• Even if deducted, filing your return properly lets you claim a refund

This isn’t just a tax benefit—it’s a smart financial move.

Final Checklist for Claiming Capital Gains Tax Exemption under India–Singapore DTAA

To make sure you don’t miss out on the tax benefit, follow this step-by-step list:

• Get your Tax Residency Certificate (TRC) from IRAS in Singapore

• Fill out Form 10F on India’s income tax website

• Draft a simple self-declaration letter

• Submit all the above documents to the mutual fund company or their service provider (like CAMS or KFintech)

• File ITR-2 and clearly mention the DTAA benefit details

Need Expert Support?

KMG CO LLP offers dedicated help for NRIs in Singapore. We assist with:

• Getting TRC from Singapore tax authorities

• Preparing Form 10F and self-declaration

• Filing your Indian tax return with DTAA information

• Getting refunds for any extra TDS deducted on your mutual fund gains. We provide the best NRI tax filing services!

Disclaimer: The content on this website is for informational purposes only and does not constitute legal, financial, or professional advice. Please consult qualified experts before acting on any information. K M GATECHA & CO LLP accepts no liability for errors, omissions, or outcomes from the use of this content. This site is not an advertisement or solicitation.