Hello!
For an individual NRI investor who had LTCG from sale of equity shares for which STT was paid under 112A, which of the following 2 sections should be filled? The first one is Schedule 112A. The second ticked one is Schedule 115AD(1)(b)(iii) priviso, and explicitly mentions NRIs. Otherwise, the formats are identical as far as I can see. I presume NRI has to fill the details ONLY under Schedule 115AD(1)(b)(iii) priviso, is that correct?
Thank you in advance!
Yes, you are correct, for NRIs sec. 115AD(1)(b)(iii) proviso is applicable.
In my view Schedule 112A would have to be used.
Section 115AD deals with the tax on the income of Foreign Institutional Investors from securities or capital gains arising from their transfer. Clause (a) to the Explanation to Section 115AD defines the term 'Foreign Institutional Investor' to mean such investor as the Central Government may, by notification in the Official Gazette, specify in this behalf.
Accordingly, CBDT has notified a Notification No. 17/2020 on 13.03.2020 to specify that a non-resident being an Eligible Foreign Investor which operates in accordance with the Securities and Exchange Board of India, circular IMD/HO/FPIC/CIR/P/2017/003 dated 04th January, 2017, shall be deemed as Foreign Institutional Investor (FII) for the purposes of transactions in securities made on a recognised stock exchange located in any International Financial Services Centre (IFSC), where the consideration for such transaction is paid or payable in foreign currency.
Relevant circulars attached for reference
Sebi Circular attached for reference
To clarify, in my view 115AD will be applicable where the NRI has conducted the securities transactions through a stock exchange located in IFSC, else schedule 112A will be applicable.
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