Returning from NL after ~15 yrs — can I "step up" cost basis on NRE-funded Indian mutual funds, or is that impossible?
Planning a permanent return to India (~early 2027) after ~15 years in the Netherlands. Trying to sort out my Indian mutual funds before the move and hitting a wall on one specific idea.
Situation:
Indian equity MFs, ~₹1.3 Cr current value, ~₹50L invested → roughly ₹80L in long-term gains.
All bought via NRE money (fully repatriable, foreign-sourced).
Currently NL tax resident; will redeem while still NL resident if I redeem at all.
Euro assets kept entirely separate — not part of this question.
What I actually want: to step up my cost basis before I become ROR, so future gains (when I eventually sell as a resident) are smaller. Ideally book the profits and restart on a clean slate.
Two questions:
Is a cost-basis step-up even achievable on Indian-domiciled MFs? My understanding is these are Indian-source, so LTCG (12.5% above ₹1.25L) applies whether I'm NRI, RNOR, or ROR — meaning redeeming just to reset basis costs ~₹9-10L in tax for no rate benefit.
Am I right that the step-up trick only works for foreign funds during RNOR, and is simply inapplicable here?
Does the India–Netherlands DTAA change anything? UAE/Singapore/Mauritius residents can get Indian MF gains taxed only in their residence country (effectively exempt). Does the NL treaty's Article 13 offer any equivalent relief for mutual fund gains (not shares) for an NL tax resident? Or does NL not get that carve-out?
If both answers are "no relief," I'll just leave everything invested and not redeem. Trying to confirm before I trigger an avoidable tax event. Anyone actually navigated the NL→India MF piece?