tax on sale of shares in usa by indian resident

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SUNNY (Querist)

16 July 2011 What is the tax treatment for long term capital gain on sale of US company's shares?

The assessee is Indian Resident and has received the funds in Rupees and got the shares under esop agreement from company in india registered as pvt. ltd.

wht is tax treatment????

CA PARAS BAFNA

CA PARAS BAFNA (Expert)

16 July 2011 Shares in a foreign company is a capital asset and indexation for the purpose of calculating long term Capital Gains is allowed.

SUNNY

SUNNY (Querist)

16 July 2011 i am asking for tax treatment..shares are sold in usa so DTA is also applicable on it

CA. Anuj Gupta

CA. Anuj Gupta (Expert)

24 July 2011 As per Article 13 of India USA DTAA -Gains "Except as provided in Article 8 (Shipping and Air Transport) of this Convention,
each Contracting State may tax capital gains in accordance with the provisions of its domestic law."

So this article gives each country right to tax capital gains in accordance with its domestic law .

In your case the capital gains shall be charged in USA as per USA Local Law and also at the same time shall be again taxable in India as per Indian Income Tax Act,1961, as correctly pointed out by CA Bafna. Benefit of taxes paid in US shall be available to you.

Anuj
+91-9810106211
femaquery@gmail.com

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