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Any income tax liability on profits/capital gains earned on company shares while I was an NRI

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josh

256 Points Posted on 12 April 2021

Hello Forum,

Please help in clarifying any tax liability in following case,

I was NRI between 1998 to APRIL 2004 working for a foreign company outside india. During my employment , the company gave shares/stocks as part of annual performance bonus. I earned those stocks as part of my annual salary compensation.

I left the company and came back to India in 2004.

Now, after 16 years I found the shares of the company have increased sharply . I am planning to sell those shares/stocks now. I like to understand whether there will be any tax I have to pay in India for the profits/capital gains earned on selling those company stocks ??? If I pay a tax on the profits/capital gains earned in foreign country ( I still need to check on this ) do I need to pay tax in india ?? Please clarify

Thanks

Replies (1)

Mujeeb Doi

309 Points Posted on 13 April 2021

In this case, you are Resident and ordinarily resident in India and hence, global income of yours will be taxable in india. However, in such case of global income you need to refer the relevant para of DTAA of India with that aforementioned foreign country as it will override the provisions of income tax in India to the extent beneficial.
Hence, i would advise you to consult a professional, as various information (for e.g. type of shares, relevant DTAA for determining source based taxation or domicile based taxation, beneficial rate of tax etc) would be required to determine the taxability of the transaction.
For any further info. can contact me on : mujdoi @ gmail.com