, Columnist
Funds Vexed by Tax in India
Efforts to close a loophole may end up penalizing needed long-term investors.
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Are you an American investor in an India fund? Call up the manager and ask three questions: what part of your profit might you have to share with the government; how will you settle your dues; and what must you do to receive an offset against U.S. taxes. Good luck getting straight answers.
No, your manager is not being evasive. It's just that India's resolve to collect capital-gains taxes from foreign investors, while laudable in its motivation, stands on wobbly operational legs.