Taxation of overseas equity investments

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Kapil Khanna (Querist)
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09 July 2016 Hi,

Two questions. Please answer both.

1. How is tax computed on overseas equity investments (under LRS - Liberalized Remittance Scheme)?
2. If gains are realized and reinvested in overseas account (in USD), not repatriated in INR, then do I have to pay tax in India?

Thanks,
Kapil

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 July 2016 1 Gain from Equity held for less than one year will be treated as short term capital gain and taxed. Gain from equity held for more than one year is treated as long term capital gain which is exempted from tax.
2 Yes tax payable.

Kapil Khanna

Kapil Khanna (Querist)
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09 July 2016 1. Answer is incorrect. Overseas equity investments are NOT treated same as domestic equity .... this I am sure. What I am not sure is whether Long term (> 1 yr) is taxed at 20.6% and if it can be indexed.
Please revisit the question.
Thanks.

CA R SEETHARAMAN

CA R SEETHARAMAN (Expert)
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09 July 2016 I agree with your view and got updated, thank you. Yes long term capital gain taxed at 20.6% can be indexed.

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