Do NRIs must pay tax on capital positive factors?

I’ve been a US resident for the previous seven years. I had bought a flat in Kolkata 5 years in the past, which I need to promote. Will I must pay capital positive factors tax in India? How a lot cash can I repatriate?

—Vipin

NRIs who promote property located in India must pay capital positive factors tax in India. If a home property is offered after a interval of two years, the capital positive factors are categorized as long-term capital positive factors. In case property is held for 2 years or much less, the positive factors shall be categorized as short-term capital positive factors. The calculation of capital positive factors tax shall be the identical as for a resident Indian. Long-term capital positive factors are taxed at 20% and short-term positive factors shall be taxed on the relevant revenue tax slab charges for the NRI based mostly on the overall revenue which is taxable in India for the NRI. When an NRI sells property, the customer will deduct TDS @ 20%. NRIs can save tax on capital positive factors by claiming exemption by means of varied provisions of the Income Tax Act just like these accessible to resident Indians. In case any tax is payable within the nation by which the NRI is resident, he/she will be able to declare advantages accessible underneath the Double Taxation Avoidance Agreement between India and such nation.

I maintain a non-resident unusual (NRO) portfolio funding scheme (PIS) account, which I exploit to commerce within the Indian inventory market. Can I declare exemption for the short-term capital positive factors (STCG) tax that I pay for my trades?

—Name withheld on request

Usually, an NRI shall pay tax on capital positive factors from sale of shares listed on the Indian inventory exchanges the identical method as a resident Indian. The tax charges and the tactic of calculation of positive factors and exemptions accessible are just like these of a resident taxpayer.

Capital positive factors earned by an NRI are topic to TDS, which shall be deducted earlier than a cost on the market is deposited within the NRI’s account.

Archit Gupta is founder and CEO, ClearTax.

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