Motilal Oswal Nasdaq 100 ETF (MON100) bought in Mar 2023, not sold yet
What would be the tax liability if I sell in FY24-25 vs FY25-26?
I read Foreign Stocks and Taxation – Varsity by Zerodha but it’s still not clear.
How is Motilal Oswal Nasdaq-100 ETF taxed in India?
Motilal Oswal Wealth Management
Invest in Equities backed by Advisory & Research (1987–present)Author has 1.1K answers and 10.4M answer views3y
The Nasdaq-100 ETF we provide is taxed as an ‘investment other than equity oriented fund’ (i.e. debt taxation with/without indexation benefits). In the event you have decided to sell the Nasdaq-100 ETF, you will have to report the income or loss in the financial year. The losses or gains should be reported as capital gains income. This fund is classified as a debt mutual funds investment.
Since they are considered debt mutual funds, the taxation on their returns would be done in the following manner :
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Returns from the Nasdaq-100 ETF sold after 3 years will be recorded as long-term capital gain and the returns on them are taxed at 20% of indexation.
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Returns for the Nasdaq-100 ETF which are sold in less than 3 years will be recorded as short term capital gains and the returns will be taxed depending on the fund owner’s income tax slab.
If you wish to reduce the tax amount, you should learn about the process of debt mutual funds taxation.
The Nasdaq-100 ETF we have provided gives our customers the ability to include international funds in their portfolio. Including such international funds can help individuals who are looking to diversify their portfolios.
This answer is 3 years old, taxation rules have changed since then I believe
@Quicko
Can you please help?
- What would the applicable holding period to count it in LTCG? I’m assuming it should be 1 year since it’s listed in India.
- Would the limit of 1.25L exemption apply to this as well?
- Does the taxation for this change between this FY and next FY as per the new budget?
I researched a bit but couldn’t find any definitive answer.
I have been checking market depth for Motilal Oswal Nasdaq-100 ETF. Not a single seller only buyers at 2 pm approx time (icici Direct - market depth). Same with FAANG - not a single seller when I was checking it.
iNAV is around 170. So, it is trading at a heavy premium due to recent rupee depreciation.
Hi @Niket,
As this is a foreign ETF listed in India, it’ll be taxed as follows.
*New rates will come into effect from April 1, 2025.
@Quicko
Would the limit of 1.25L exemption apply to this ETF as well?
While it’s a listed ETF, it doesn’t meet this criteria of being a “equity oriented fund” that is needed for the 1.25L exemption, correct?
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what about nasdaq 100 FOF?
Hi @Niket,
Yes, as the ETF does not invest in domestic equity, the ₹1.25L exemption will not be applicable.
@BB789 @Niket could you help clarify the final details regarding the STCG and LTCG, including the applicable holding period? There’s been a lot of confusion surrounding the taxation rules for the Motilal Oswal Nasdaq 100 ETF.
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The only way to know for sure is to look at the tax law and make your own interpretation(if courts haven’t made any deliberate interpretation). I wish @Quicko would cite the exact section(or judgements if any) for their interpretation and maybe explain why motilal interprets it differently.
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Dear Quicko Team, Thank you for sharing above information. I have reviewed the discussion thread and determined that my situation aligns with the first case: units purchased before April 1, 2023, and sold before July 23, 2024.
Under this scenario, I have both Short-Term Capital Gains (STCG) and Long-Term Capital Gains (LTCG).I have understood the classification up to this point.
However, I require your expert guidance & inputs on the following: Which specific section of Schedule CG in ITR-2 should I use to report these gains(both STCG & LTCG)? Does the selected section explicitly address this scenario (purchase before April 2023, sale before July 2024)?
For your reference, the ETFs in question are MON100 (applicable for both LTCG and STCG) and HNGSNGBEES (applicable for STCG).
I would appreciate your assistance in navigating this process. Thank you for your support. On the attached ITR2 CG sections, if you can point me which section to use for both STCG and LTCG in this scenatio, would be very helpful. Thank you.
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Hi @Quicko Please guide. Thank you.
EDIT: Sharing my understanding.
Hi ALL, This is just for your reference, would request everyone please don’t refer directly. This is just for my case.
MON100 HNGSNGBEES
STCG - A(I) - 5) From sale of assets other than at A1 or A2 or A3 or A4 above
- 5 "i. a." - Add Sale value - Full value of consideration received/receivable in respect of **unquoted shares**
- 5 "b. bi" - Add Cost value - Cost of acquisition without indexation
LTCG - B(I) - 9) From sale of assets where B1 to B8 above are not applicable
- 9 "1 a(i) a." - Add Sale Value(Where transfer was before 23rd July 2024) - Full value of consideration received/receivable in respect of **unquoted shares**
- 9 "4 b. bi." - Add Cost value(This should be indexed - google the formula & refer this https://cleartax.in/s/cost-inflation-index) - Cost of acquisition with indexation for transfer before 23rd July 2024 and without indexation for transfer on or after 23rd July 2024
F. Information about accrual/receipt of capital gain
- Add STCG gains under - 4. Short-term capital gains taxable at applicable rates Enter value from item 3v of schedule BFLA, if any
- Add LTCG gains under - 8. Long- term capital gains taxable at the rate of 20% Enter value from item 3viii of schedule BFLA, if any
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Hi @Esha can you please tag someone from Team, who can provide some guidance on the above query. Thank you. cc: @siva
Hi @RRRR,
Here’s how you should report your Foreign ETFs (MON100 and HNGSNGBEES) in Schedule CG of ITR-2 for units purchased before April 1, 2023, and sold before July 23, 2024.
1. Short-Term Capital Gain (STCG)
Since HNGSNGBEES and also MON100 (if held <36 months) qualify as STCG, these need to be reported under:
- A(I). Short-term Capital Gains → Item 5. From sale of assets other than at A1 or A2 or A3 or A4 above (i.e., other than quoted shares).
Here, STCG will be taxed at slab rate.
2. Long-Term Capital Gain (LTCG)
For MON100 (if held >36 months before sale), the gain qualifies as LTCG with 20% tax with indexation under old rules. You should report this under:
- B(I). Long-term Capital Gain → Item 9. From sale of assets where B1 to B8 above are not applicable (i.e., other than quoted shares).
Thank you!
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Thank you so much @Quicko . I have earlier edited my post with my understanding - Nasdaq 100 ETF taxation - #18 by RRRR.
Based on reviewing your response , it is same. Thank you so much for taking out time and replying. This helps in filing with confidence now without any doubts. Thank you.
And I am sure people coming back to this thread, will find this useful as well. Thank you.
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@Quicko Sir few confusions here
- Do FoF’s also fall under this category?
- Say a persons total income is 5 lacs. The slab rate tax rate means that the gains will be added to his total income of 5 lacs?
Similarly 12.50% slab rate means flat 12.50% tax?