"NRIs & Share Sales: Tax Rates Simplified"

NRIs selling shares and securities in India are subject to varied tax rates based on asset type and holding period, with long-term gains generally taxed at 10-20% and short-term gains either at 15% or as per income tax slab. Key considerations include TDS applicability, DTAA benefits to avoid double taxation, and the need to file tax returns for refunds or adjustments.


Impact of Selling Shares and Securities for NRIs: Tax Implications

Non-Resident Indians (NRIs) face specific tax implications when selling shares and securities in India. Below is a concise overview:

Type of Asset Tax Rate Details
Equity Shares (Listed) Short-Term: 15%
Long-Term: 10% (above ₹1 lakh)		 Short-term capital gains apply if held for less than 12 months. Long-term gains are taxed at 10% without indexation.
Equity Mutual Funds Short-Term: 15%
Long-Term: 10% (above ₹1 lakh)		 Similar to equity shares. Gains from mutual funds are taxed based on the holding period.
Debt Mutual Funds Short-Term: As per NRI's income tax slab
Long-Term: 20% (with indexation)		 Short-term gains are taxed as per the NRI's income tax slab. Long-term gains benefit from indexation.
Unlisted Shares Short-Term: As per NRI's income tax slab
Long-Term: 20% (with indexation)		 Unlisted shares have different tax rates compared to listed shares. Holding period for long-term classification is 24 months.
Other Securities (e.g., Bonds) Short-Term: As per NRI's income tax slab
Long-Term: 20% (with indexation)		 Tax rates on bonds depend on the holding period and whether they qualify as long-term or short-term investments.

Additional Notes:

  • Tax Deducted at Source (TDS): For NRIs, TDS is applicable on capital gains arising from the sale of shares and securities.
  • Double Taxation Avoidance Agreement (DTAA): NRIs can benefit from DTAA provisions to avoid double taxation (if applicable).
  • Filing Tax Returns: NRIs need to file their income tax returns in India to claim any refunds or adjust taxes paid.

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