@Quicko team, can you please explain same thing for:
MON100 ETF purchased before 2023, and selling After July 2024 ( i.e. I want to sell now in sept 25).
Is there any concept of STCG/LTCG?
Taxation rate?
Hi @Yogesh_Heda,
Since MON100 is an equity-oriented ETF, the tax treatment depends on the holding period:
- Short-Term Capital Gains (STCG): If sold within 12 months of purchase → taxed at 15%.
- Long-Term Capital Gains (LTCG): If sold after 12 months → taxed at 10% on gains exceeding ₹1 lakh in a financial year. No indexation benefit applies.
In your case, MON100 was purchased before 2023 and you’re selling in Sept 2025, so the holding period is more than 12 months. This means your gains will be treated as LTCG and taxed at 10% on gains above ₹1 lakh.
Hope this clarifies!
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@Quicko
Thanks team, but I think your answer doesn’t align with the latest available taxation details.
MON100 is a foreign ETF invest in NASDAQ100 & listed on the Indian exchange.
Is the 10% tax on gains above ₹1 lakh still applicable just because I purchased these ETFs before 2023?
Or do the new rules apply at the time of sale, regardless of purchase date? Could you please recheck and clarify?
Also your recent answer contradicts with previous answers provided to @RRRR
Hello @Yogesh_Heda
Thank you for providing the additional details and the clarification.
Since MON100 is a foreign ETF, it is treated differently from Indian equity ETFs for tax purposes, and gains are not classified under Section 111A or 112A. As per the amended budget rules, for foreign ETFs, a holding period of more than 12 months qualifies as long-term capital gains (LTCG), which will be taxed at 12.5%, while short-term capital gains (holding ≤12 months) are taxed at the normal slab rates. Since you purchased MON100 before 2023 and are selling in September 2025, your holding period exceeds 12 months, so the gains will be treated as LTCG and taxed at 12.5% plus cess.
Since Quicko and Motilal have given confusing and conflicting details, I decided to dig into the tax laws and acts and I’m going to exactly quote the section responsible for the current tax rate.
Duration(Holding period for classification into long term/ short term):
- This is decided by Section 2(42A),which currently states every asset <24m is a short term asset except a few. These exceptions decide whether a lesser holding period <12m is applicable for a asset.
-
Provided that in the case of a security 10[***] listed in a recognized stock exchange in India or a unit of the Unit Trust of India established under the Unit Trust of India Act, 1963 (52 of 1963) or a unit of an equity oriented fund or a zero coupon bond, the provisions of this clause shall have effect as if for the words 11"[twenty-four] months", the words “twelve months” had been substituted:
- Since
MON100is a “security listed in a recognized stock exchange in India”, the holding period of 12m is applicable.
Capital Gain rate:
-
This rate is determined by
- LTCG: Section 112,
- LTCG( for shares): Section 112A
- STCG(for shares): Section 111A
- Special section: 50AA for specified mutual funds
-
LTCG: The rate is basically the same at 12.5% for both 112 and 112A. The only difference is whether 1.25L tax exemption availability. 112A gives the exemption. 112 doesn’t.
-
LTCG:
MON100doesn’t satisfy the definition of “equity oriented mutual fund” in 112A because it doesn’t invest 65% in “domestic” companies. So, LTCG is 12.5% under 112 with no 1.25L exemption… -
STCG: If this security comes under 111A, then tax is at 20%, else slab rate.
-
STCG:
MON100doesn’t satisfy the definition of “equity oriented mutual fund” in 112A because it doesn’t invest 65% in “domestic” companies. Therefore, it doesn’t satisfy the definition in 111A either. So, STCG is slab rate. -
50AA: The govt changed the definition of “Specified mutual funds” in this section for new financial year. Basically, any fund that is a “Specified mutual fund” is treated as short term and section 2(42A) doesn’t apply, i.e., there is no holding period for it to become LTCG- It was always short term and taxed at slab rates. Previously all International mutual funds, Gold ETFs came under this because of the way it was defined(defined as non-equity funds). Now, only debt mutual funds(those that invest >65% in debt). So, MON100 is exempt from this definition now.
The income tax act is a messy web with information about a single capital gains put in multiple sections and multiple places here and there with multiple exceptions and provisions… it was hard, but I believe I caught them all. Even if Govt changes it in the future this will help you to know where to look for.