Indexation benefit & surcharge on foreign stocks

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This discussion clarifies the tax treatment of foreign stocks held in India. It confirms that the indexation benefit, which adjusts for inflation, is indeed applicable to foreign shares like US stocks (e.g., MSFT) held for over three years, reducing taxable capital gains. Furthermore, it explains that the 15% surcharge on Long Term Capital Gains (LTCG) for foreign shares is a flat rate applied to gains exceeding ₹1 crore.

faisal shukoor

faisal shukoor (Querist)

13 July 2024 Experts, please advise on the below query.

Is the Indexation benefit applicable for US stocks in India. Say I hold MSFT for 3 years and later sell it, will I get Indexation benefit on this?

Second, is the surcharge of 15 pct flat on LTCG for value above 1 cr or are there slabs?

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 July 2024 you get an LTCG on foreign shares tax rate of 20% plus applicable surcharge and cess. There's also an indexation benefit that adjusts the purchase cost for inflation, reducing your taxable gains.
It's flat 15%.

faisal shukoor

faisal shukoor (Querist)

14 July 2024 Thank you. Really appreciate

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)

14 July 2024 You are welcome..
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