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Taxation on Short/Long Term Capital Gain on Shares

Deepak Walia (Not Applicable) (133 Points)

11 January 2020

Can anyone please tell me in case of NRI if anyone transfer funds from NRI account to domestic Indian account in order to buy shares online while staying outside India !

In case of realization of either short or long term capital gain, how would it be taxable in the hands of NRI !

Actually there arise two types of situations

1. Transfer of funds from NRI account to domestic Indian account

2. Realization of either short term or long term capital gain from shares.

Thanks in advance.

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9 Replies

sabyasachi mukherjee (26053 Points)
Replied 11 January 2020

Inspite of being an NRI..
any sums of money transferred from nre account to india in his savings account for the purpose of trading in shares and mutual funds is taxable in india.
becoz income deemed to accrue or arise in india out of traded shares.
hence is taxable in india but at a higher rate.

Deepak Walia (Not Applicable) (133 Points)
Replied 11 January 2020

That means only short term or long term capital gain on shares or mutual funds would be taxable in India.

There would be no impact on income earned outside India which is to be transferred from nre account to domestic indian saving bank account for the purpose of buying shares/mutual funds.

Am I right !

sabyasachi mukherjee (26053 Points)
Replied 11 January 2020

Now income earned outside india and credited in nre account of a scheduled commercial bank will not be taxable in india provided the assesse is non resident india and income earned outside india out of employment outside india will be taxable in that country.

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Kapadia Pravin (17249 Points)
Replied 11 January 2020

1. It's transfer of your own funds from abroad to your NRO account with Indian Bank. No tax impact in both countries.

2. Gains from investment in shares and Mutual funds will be either short term or long term depending upon holding period.

As a NRI, such gains are taxed at par with Resident Indian individuals under income Tax Act.

Upto 1 lakh LTCG is exempt from tax.

The additional requirement is that of Form under FATCA Act which you have to submit to MF and to online broker alongwith application for investor KYC registration.

You need to have PAN number.

Such capital gains in India , you have to consider in Your tax return abroad and take available DTAA deductions.

sabyasachi mukherjee (26053 Points)
Replied 11 January 2020

1)
Long term capital gains are taxable in investment in mutual fund and shares in India from AY 18-19 UPTO 10% in excess of Rs.1 lac.
Rest leaves
2)
with the form under FATCA ACT which regulates account holders to regulate assets held abroad under pescribed formats.

Kapadia Pravin (17249 Points)
Replied 11 January 2020

Above reply is a repeated one ....good but with errors added.

it's from AY 2019-2020.
LTCG above 1 lakh taxed @ flat rate of 10% (what is upto ???)
Anyway, be clarified Mr. Deepak