n NISM Certifications
V-A NISM Series V-A
Medium

Which statement is true with respect to the applicability of TDS in the case of capital gains from mutual fund units?

Practice question from NISM Series V A - Mock Test 6 — bank. The correct answer is highlighted below with a full explanation.

Options

  1. A

    There is NIL TDS on capital gains in mutual funds for all investors

  2. B

    TDS is required to be deducted at 10 percent on all declared dividends

  3. C

    All capital gains from mutual fund investments are subject to TDS @ 10%

  4. TDS is not applicable on capital gains for resident individuals but is applicable for Non-Resident Individuals (NRI)

    Correct answer

Why this is the answer

TDS is not deducted on capital gains for resident individuals. However, for non-resident investors (NRIs), TDS at a rate of 10% is applicable on capital gains.

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