NRIs in Singapore: How to Claim Exemption from Capital Gains Tax on Indian Mutual Funds under India–Singapore DTAA

If you are a Non-Resident Indian (NRI) living in Singapore and investing in Indian mutual funds, this article could save you a significant amount in taxes.

Thanks to the Double Taxation Avoidance Agreement (DTAA) between India and Singapore, eligible NRIs can legally avoid paying capital gains tax in India on mutual fund redemptions—provided they follow a few clear steps.

This is a fully legal process backed by treaty provisions, not a loophole. Let’s break down how the DTAA works, who can benefit, and the step-by-step guide to claiming your exemption and filing your return correctly in India.

The DTAA is an agreement that prevents the same income from being taxed in both countries. Under Article 13 of the India–Singapore DTAA, capital gains arising from the sale of shares, units, and mutual funds will be taxable only in the country where the seller is a resident.

Since Singapore does not tax capital gains for individuals, this means that many NRIs living in Singapore may end up paying zero tax in both countries on their mutual fund gains—if they claim this benefit properly.

To claim the capital gains exemption under DTAA, you must:

• Qualify as an NRI under Indian income tax law (typically by spending more than 182 days outside India in a financial year)
• Be a tax resident of Singapore in the same year in which the mutual fund gain arises
• Have no permanent establishment (such as a business base or office) in India

Let’s now walk through the practical steps involved in claiming the benefit.

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

This is the most important document. A TRC from Singapore’s Inland Revenue Authority (IRAS) serves as legal proof that you are a Singapore tax resident.

How to apply for a TRC (known in Singapore as a Certificate of Residence):

1. Follow the Link: IRAS: Apply for Certificate of Residence
2. Go to “Apply for Certificate of Residence”
3. Fill out the online form and upload any supporting documents, such as employment income details, proof of address, and PAN (if available)
4. Submit the application

The certificate is typically issued digitally within 7 to 10 working days. There is no government fee for the TRC as of now.

Step 2: Fill Form 10F on India’s Income Tax Portal

Form 10F is a short self-declaration confirming your name, country of residence (Singapore), tax ID (usually NRIC), and that you do not have a permanent establishment in India.

You can fill Form 10F online by logging in to incometax.gov.in with your PAN credentials.

Step 3: Prepare a Self-Declaration Letter

In this one-page document, you declare:

• That you are a tax resident of Singapore during the relevant financial year
• That you do not maintain any permanent establishment in India
• That you are claiming exemption from capital gains tax on the basis of Article 13 of the DTAA

Step 4: Submit These Documents to Your AMC or RTA

You should submit the following documents to the mutual fund house or its Registrar and Transfer Agent (such as CAMS or KFintech):

• Copy of the Singapore TRC
• Filled Form 10F
• Self-declaration letter
• PAN copy and passport if requested

This helps ensure that either:

• No TDS (tax deduction at source) is made when you redeem your mutual funds, or
• You can easily claim a full refund later by filing your return in India

Step 5: File Your Indian Income Tax Return (ITR)

Even if your capital gains are exempt under the DTAA, it is advisable—and in many cases mandatory—to file your Indian tax return, especially if TDS was already deducted.

Use Form ITR-2, and disclose:

• Your capital gains in the exempt income section
• TRC details and treaty reference under Schedule TR
• Foreign residency in Schedule FA

If TDS was deducted, you can claim a full refund while disclosing DTAA exemption.

Example: The Savings You Unlock

Let’s say you made a capital gain of ₹6,00,000 by redeeming Indian mutual funds.

• Without DTAA claim, a TDS may apply
• With proper DTAA documentation, your TDS may be nil
• If deducted, you can file ITR and claim a full refund

This is not just good tax planning—it’s smart financial hygiene.

Here is a summary checklist to claim capital gains exemption under India–Singapore DTAA:

• Apply for Tax Residency Certificate from IRAS
• Fill out Form 10F on India’s tax portal
• Prepare a self-declaration letter
• Submit all documents to the AMC or CAMS/KFintech
• File ITR-2 and disclose DTAA details

Zenify Consultancy Services specializes in NRI taxation, we regularly assist clients in Singapore with:

• Obtaining TRC from IRAS
• Preparing Form 10F and declaration
• Filing ITR in India with full DTAA disclosure
• Claiming refunds of excess TDS deducted on capital gains