Capital gain through American stock market

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This discussion clarifies how to compute Indian tax on capital gains earned from the American stock market. Both long-term capital gains (taxed at 20% plus cess, with indexation benefit) and short-term capital gains (taxed at 15%) are covered. The calculation should follow the Indian financial year (April-March), regardless of the US accounting year. It also touches upon capital gains tax implications for shares received via ESOPs.

DIVYESH JAIN

DIVYESH JAIN (Querist)

04 October 2021 Dear Sir,

One of my client has earned income through capital gain from American stock market. What is the way of computing Taxable income as per Indian law for capital gain from abroad.

Please help me in this matter.

Regards,
Divyesh Jain

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 October 2021 Long term capital gains arising from sale of foreign stocks attract tax at the rate of 20% plus surcharge and health and education cess along with benefit of indexation.
Claim tax relief if any tax paid outside India.

DIVYESH JAIN

DIVYESH JAIN (Querist)

04 October 2021 What about Short term capital gain, if any

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 October 2021 Short term capital gains 15% tax payable.

DIVYESH JAIN

DIVYESH JAIN (Querist)

04 October 2021 Also if the Accounting year in US is January to December, will the capital gain calculation be considered as per Indian law i.e. April to March.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 October 2021 Yes, consider it as per Indian law.

DIVYESH JAIN

DIVYESH JAIN (Querist)

04 October 2021 Ok, Thanks a lot for your valuable feedback.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

04 October 2021 You are welcome.........

DIVYESH JAIN

DIVYESH JAIN (Querist)

07 February 2022 One more doubt regarding this Sir, if the person has has received these shares by the way of ESOP from his company and he has sold these shares by an American broker how capital gain tax will be calculated in India

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