Non resident indian - taxation on short term capital gain on shares/ equities

Dear All 

There is an issue with the Tax filing  with an NRI  . Please see the details for  AY 2018-19

Short term capital gain on shares of indian companies purchased from Bombay stock exchange -  Rs 25000

(These purchases are made from the NRE/ NRO   Ruppee a/c  maintained in India )

TDS deducted on the above @ 15%  

Interest  from NRE  Account    -  Rs 5000

 Interest from  NRO Account  - Rs 3500  -  (TDS already  Deducted )

So total Income is 33500

Queries:

1 Can he file the return and claim refund of the TDS   -  as his   taxable income is below 250000 for  AY 18-19

2 Chapter 6A deduction for LIC premium is applicable for an  NRI who as only    STCG ?

Read in some articles that NRI cannot   set off the exemption limit of 250000    if he has only  income under capital gain on shares 

Aslo mentioned in the same article , 80 c and other decuctions are not available for the NRI if he has only capital gain income from shares ( no ther income)

Last query , where will this STCG will be shown in ITR 2   CG  Sheet . If it is shown under  nos 3  or  4  , then the ITR 2 IS automatically calculating the Income Tax  on the full STCG 

Your valuable advice is highly appreciated 

Thanks 

 

 

 

 

 

 

 

 

 

Replies (8)
1. He is required to file income tax return and pay tax on stcg and interest from NRO account and claim TDS deducted against tax liability. Note interest from NRE account is exempt from tax.
2.No
3. No 80C deductions and exemption against STCG.

Thanks for the information . 

 He can get full refund of the  TDS on the basis that his  total income is less than the limit  250000?

 

Thanks 

Yes, he can claim refund of TDS deducted.

Thanks for the reply .

 

But   while reading sec 111 A  of  IT  ACT , it  seems that the basic exemption of 250000  is not to be set off against the STCG on shares .  Does this mean that   the NRI has to pay 15% tax on stcg on shares and there is no chance to get a refund of the same , without considering the basic exemption limit   as if the exemption is not allowable on STCG on share 

Please advice 

 

Yes, you will have to pay tax on short term capital gain.
Thanks That means , to summarise , TDS refund on STCG on shares is not available to NRI even if his income is less than the threshold limit of Rs 250000 . Tax must be paid on STCG irrespective of total Income
Yes, First calculate tax on STCG and deduct TDS and pay balance tax.

Dear Sir 

Thanks for the proper advice .

But  I am surprised to see that   the said NRI has filed his ITR for the last 3 years and got refund of his full TDS . When I checked his previous returns ,   and he got also the chapter 6 A  deductions, 80 C  ETC  ( max 150000 subject to  GTI) . . 

 

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