What are theTax Implications of investing in Indian Equities for NRI`s?
Long term capital gains: Gain on shares purchased from NRE/FCNR account is computed in terms of foreign currency from which the shares were purchased and charged to tax @10%. NRIs can thus avail of the benefit of Rupee depreciation. Tax on shares purchased from NRO accounts is levied @20% of the long-term capital gain, with indexation benefit. NRIs have an option to pay the tax @10% without the benefit of indexation. Short term capital gains: If shares are purchased out of NRE/FCNR account, the gain is taxed @ 20%. In all other cases, the gain is regular income and taxed on applicable slab rates. Long term capital gains arising in the same year can be set off against short term capital losses arising in the same year and vice-versa. Both long-term capital losses and short-term capital losses can be carried forward for a period of eight years and adjusted against future gains.
