If a person residing in US invests in Indian stocks and get profit, what would be the income tax payable?



A person residing in US invests stocks in India. He has no other income except from stocks. If he is getting profit from short term(less than 365 days) gains, long term(more than 365 days) gains and dividends, does he need pay capital gains tax? If he does not need to pay does he need to file tax returns.

If a person residing in US invests in Indian stocks and get profit, what would be the income tax payable?
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2 Replies to “If a person residing in US invests in Indian stocks and get profit, what would be the income tax payable?”

  1. It is regarded as income and must be declared on his US tax returns (Federal and state and local). Any tax paid in India can be used as an at least partial offset to US taxes.


  2. The basic exemption limit of Rs. 1,60,000 is available to all Assessees, whether resident or non resident.

    Therefore, if the short term profit on share trading is less than this amount, no Indian Income Tax needs to be paid and consequently no tax return also needs to be filed in India.

    However, assuming that the Short Term Gains exceeds this basic limit, tax @ 15% with education cess of 0.45% is to be paid on the excess over 1,60,000.

    Long term capital gains are tax free for both residents and non residents if the all sales have been effected through stock exchanges/brokers and securities transaction tax has been paid on all such deals.

    If both long term and short term gains taken together exceed the basic limit, a tax return MUST BE filed even though no tax is payable.





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