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How are ETFs taxed?

Curious about ETFs

How are ETFs taxed?

In India, ETFs are treated like equity shares for tax purposes. Longterm capital gains on ETFs held for more than one year are taxed at a rate of 10% without indexation or 20% with indexation, whichever is lower. Shortterm capital gains on ETFs held for less than one year are taxed at a rate of 15%. Dividends received from ETFs are also taxable, with a tax deducted at source (TDS) of 10%. However, if the dividend income exceeds Rs. 5,000 in a financial year, the investor will have to pay additional tax on the dividend income as per their applicable tax slab. It's important to note that tax laws may vary based on the individual's tax residency status, so investors are advised to consult with a tax professional for personalized advice.

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