{"id":44798,"date":"2024-10-03T09:04:08","date_gmt":"2024-10-03T09:04:08","guid":{"rendered":"https:\/\/tata-blog.osian.dev\/blog\/?p=44798"},"modified":"2024-10-07T17:50:23","modified_gmt":"2024-10-07T12:20:23","slug":"international-funds-have-become-more-attractive-after-capuital-gains-tax-changes-in-the-budget-heres-why","status":"publish","type":"post","link":"https:\/\/tata-blog.osian.dev\/blog\/wealth-services\/international-funds-have-become-more-attractive-after-capuital-gains-tax-changes-in-the-budget-heres-why\/","title":{"rendered":"International Funds Have Become More Attractive After Capital Gains Tax Changes in The Budget. Here&#8217;s Why."},"content":{"rendered":"\n<p><\/p>\n\n\n\n<p>The 2024-25 Union Budget, presented by Finance Minister Nirmala Sitharaman, introduced some critical changes to the capital gains tax structure, impacting equity Funds of Funds (FoFs) and, most importantly, gold and international mutual funds. These changes are centred around holding periods and a revised Long Term Capital Gains (LTCG) tax rate.<\/p>\n\n\n\n<p>If you\u2019re curious about these changes and are wondering whether investing in international funds will help your portfolio soar higher, look no further.<\/p>\n\n\n\n<p>Here, we discuss everything you need to know about the tax and holding period changes regarding international funds in Budget 2024 to help you decide whether investing in them is a good idea for you.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>International Funds: Explained<\/strong><\/h2>\n\n\n\n<p>Before we discuss the tax changes brought about by the Union Budget 2024, let\u2019s first understand what international mutual funds are. These are funds that help you invest in foreign companies and are also referred to as foreign or overseas mutual funds.<\/p>\n\n\n\n<p>International funds help you gain exposure to global economic growth, global markets and currency movement. Investing in these offers significant returns, more so during periods of favourable economic recovery and currency depreciation.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Budget 2024: Key Taxation Reforms<\/strong><\/h2>\n\n\n\n<p>Now that you know what international funds are, here is a look at the crucial taxation reforms introduced by the Union Budget 2024:<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Reduction in Holding Period<\/strong><\/h2>\n\n\n\n<p>The long term holding period for gold mutual funds, equity FoFs and, most importantly, international funds has been reduced to more than 24 months from more than 36 months. Simply put, international funds must now be held for more than 24 months to qualify for LTCG benefits.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Pre and Post Budget 2024 Taxation: Revised LTCG Tax Rate<\/strong><\/h2>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>If invested prior 1<sup>st<\/sup> April 2023 and sold before 22<sup>nd<\/sup> July 2024:<\/strong> International mutual funds were taxed as per slab rate if held for less than 3 years. Investments held for more than 3 years were taxed at 20% with indexation Benefit.<\/li>\n<\/ul>\n\n\n\n<ul class=\"wp-block-list\">\n<li><strong>If invested post 1<sup>st<\/sup> April 2023 and sold after 23<sup>rd<\/sup> July 2024:<\/strong> &nbsp;Capital gains will be taxed at 12.5% if held for more than 24 months (the revised long-term holding period). Short Term Capital Gains (STCG) tax rate will depend on the investor\u2019s income tax slab.<\/li>\n<\/ul>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>How Does This Impact Your Portfolio?<\/strong><\/h2>\n\n\n\n<p>The above mentioned taxation for international funds have made them significantly more attractive for investor\u2019s portfolio as holding period is reduced to 24 months. Investor\u2019s falling under higher tax brackets will also benefit from lower LTCG tax rate of 12.5%. mean.<\/p>\n\n\n\n<p>If you\u2019re a long-term investor, investing in international funds with the revised tax structure of 2024 can prove beneficial.<\/p>\n\n\n\n<p>As on July 25, 2024, over the last year, international funds have performed well, with an average return of 12.53%. According to an Economic times news report, Mirae Asset NYSE FANG+ETF FoF recorded the highest return, at an impressive 51.83%. Given these changes in tax rate and holding period, Indian investors can more easily tap into the international market and gain critical exposure to the international economy.<\/p>\n\n\n\n<h2 class=\"wp-block-heading\"><strong>Final Thoughts<\/strong><\/h2>\n\n\n\n<p>The 2024 Union Budget has introduced favourable tax reforms for international funds. Investors can consider systematic transfer plans (STPs) and systematic investment plans (SIPs) to gain exposure to these funds. That said, international funds are not immune to market volatility, and investors must stay updated on industry news to make informed decisions about them.<\/p>\n\n\n\n<p>What\u2019s more, you need a reliable and trustworthy financial platform as well. For this, choose Tata Capital Wealth. With Tata Group\u2019s wisdom and experience of over 150 years by your side, you can forge ahead in your financial journey charging towards your financial aspirations confidently.<\/p>\n\n\n\n<p>To learn more about our offerings, visit the <a href=\"https:\/\/tata-blog.osian.dev\/wealth.html\">Tata Capital Wealth website<\/a> today!<\/p>\n","protected":false},"excerpt":{"rendered":"<p>The 2024-25 Union Budget, presented by Finance Minister Nirmala Sitharaman, introduced some critical changes to the capital gains tax structure, impacting equity Funds of Funds (FoFs) and, most importantly, gold and international mutual funds. These changes are centred around holding periods and a revised Long Term Capital Gains (LTCG) tax rate. If you\u2019re curious about [&hellip;]<\/p>\n","protected":false},"author":8,"featured_media":44924,"comment_status":"open","ping_status":"open","sticky":false,"template":"","format":"standard","meta":{"inline_featured_image":false,"footnotes":""},"categories":[37],"tags":[],"class_list":["post-44798","post","type-post","status-publish","format-standard","has-post-thumbnail","hentry","category-wealth-services"],"yoast_head":"<!-- This site is optimized with the Yoast SEO plugin v20.13 - https:\/\/yoast.com\/wordpress\/plugins\/seo\/ -->\n<title>International Funds Have Become More Attractive After Capital Gains Tax Changes in The Budget | Tata Capital<\/title>\n<meta name=\"description\" content=\"The 2024-25 Union Budget, presented by Finance Minister Nirmala Sitharaman, introduced some critical changes to the capital gains tax structure, impacting equity Funds of Funds (FoFs) and, most importantly, gold and international mutual funds. 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