Capital Gains
Capital Gains on Securities for NRIs – Taxation and Compliance Guide by Classic Partner
Expert Chartered Accountants for NRI Capital Gains Tax in India
At Classic Partner, we provide complete guidance on the taxation of Capital Gains (CG) arising from the sale of securities and capital assets in India by Non-Resident Indians (NRIs) and Persons of Indian Origin (PIOs). Our expert team of Chartered Accountants helps you compute, plan, and file taxes on your investments while ensuring full compliance with the Income Tax Act, 1961 and applicable DTAA provisions.
What Are Capital Gains for NRIs?
Any profit or loss from the sale, exchange, or transfer of a capital asset is treated as Capital Gains. These are taxed under the head “Income from Capital Gains” in the year of transfer.
Capital Assets include:
Equity Shares
Mutual Fund Units
Bonds and Debentures
Gold, ETFs, and Other Marketable Securities
Classification of Capital Assets
| Asset Type | Holding Period (Before 23 July 2024) | Holding Period (On/After 23 July 2024) |
|---|---|---|
| Listed Shares, Equity MFs, Bonds, Debentures | >12 months | >12 months |
| Business Trust Units (on recognized exchanges) | >36 months | >12 months |
| Unlisted Shares | >24 months | >24 months |
| Other Assets (Gold, ETFs, etc.) | >36 months | >24 months |
| Unlisted Bonds/Debentures | >36 months | Deemed STCG |
Capital Gains Categories
Short-Term Capital Gain (STCG): Sale of Short-Term Capital Assets
Long-Term Capital Gain (LTCG): Sale of Long-Term Capital Assets
NRI Capital Gains Tax Rates on Securities
| Capital Asset | Before 23 July 2024 | On/After 23 July 2024 |
|---|---|---|
| Listed Equity Shares, Equity MFs (STT paid) | STCG @ 15% | STCG @ 20% |
| Other Assets (STCG) | As per income slab | As per income slab |
| Listed Equity Shares (LTCG) | 10% (no indexation) | 12.5% (no indexation) |
| Unlisted Shares (LTCG) | 10% | 12.5% |
| Listed Bonds, Debentures (LTCG) | 10% | 12.5% |
| Gold, ETFs, Other Assets (LTCG) | 20% (with indexation) | 12.5% (without indexation) |
| Specified Mutual Funds / MLDs | Deemed STCG | Deemed STCG |
Capital Gains Computation for NRIs
Formula:
Capital Gains = Sale Consideration – Transfer Expenses – Indexed Cost of Acquisition
Indexation: Available before 23 July 2024 (not available after).
Forex Benefit: NRIs investing in specified assets with foreign currency enjoy currency indexation benefits.
Important Capital Gains Provisions for NRIs
Fair Market Value (FMV) Rule – If unlisted shares are sold below FMV, FMV is deemed sale value.
Gift & Inheritance – No tax on gifting between relatives. Cost & holding period of the original owner is carried forward.
Set-Off of Losses –
STCL can be set off against both STCG & LTCG.
LTCL only against LTCG.
Carry forward for 8 years (if ITR filed on time).
ITR Filing for NRIs – Needed to claim TDS refunds, loss set-offs, and exemptions.
DTAA Benefits – NRIs may claim lower tax rates/exemptions under Double Taxation Avoidance Agreements.
Basic Exemption Limit – Available only on STCG taxed at slab rates (not on 15% or LTCG incomes).
Chapter VI-A Deductions – Like 80C/80D apply only to slab-based STCG, not to 15% STCG or LTCG.
Reinvestment Exemption (Sec 54F) – LTCG exemption available if reinvested in a residential property in India (conditions apply).
Popular NRI Capital Gains Services by Classic Partner
Tax Planning for Equity, Mutual Funds, and Bonds
Filing ITR to Claim Excess TDS Refund
Advisory on Sale of Inherited Property or Assets
DTAA Advisory for Lower Tax Rates
Exemptions & Relief on LTCG under Sec 54F
Capital Gains Advisory for Gold, ETFs & Other Assets
Why Choose Classic Partner?
Accurate & compliant computation of capital gains
Expert Chartered Accountants for NRI taxation
Full advisory on DTAA, exemptions, and refunds
End-to-end support from tax planning to ITR filing
Transparent, affordable, and NRI-focused services
Contact Classic Partner today – Your trusted Chartered Accountants for NRI Capital Gains taxation, compliance, and refunds.
