Active Stocks
Thu Mar 28 2024 15:59:33
  1. Tata Steel share price
  2. 155.90 2.00%
  1. ICICI Bank share price
  2. 1,095.75 1.08%
  1. HDFC Bank share price
  2. 1,448.20 0.52%
  1. ITC share price
  2. 428.55 0.13%
  1. Power Grid Corporation Of India share price
  2. 277.05 2.21%
Business News/ Money / Calculators/  Income from sale of shares does not attract tax at source
BackBack

Income from sale of shares does not attract tax at source

Capital gains earned from the sale of shares are subject to capital gains tax

iStockPhotoPremium
iStockPhoto

Can I, a non-resident Indian (NRI), purchase commercial property? I want to purchase such a property and plan to avail a loan for it. Is the interest on the loan tax deductible?

—Gagan Banga

NRIs are permitted to purchase immovable property in India except agricultural property, plantation property and farmhouses. Payment for the purchase can be made out of funds received in India through normal banking channels or through non-resident external, foreign currency non-resident, or non-resident ordinary accounts. A tax deduction for interest paid on loan taken for the purchase or construction of the said property is available if the property is let out.

I purchased some shares about four years ago. I want to sell them as prices have gone up a lot. What are the tax implications of doing so for an NRI? Will the tax be deducted at source on such a transaction?

—Palak Gupta

Capital gains earned from the sale of shares are subject to capital gains tax.

If shares are listed on a recognized stock exchange in India, long-term capital gains (i.e., when shares are held for more than 12 months) are exempt from tax. If shares are not listed on a recognized stock exchange in India, long-term capital gains (i.e., when shares are held for more than 36 months) are taxable at 20% excluding surcharge and cess.

Long-term capital gains from shares not listed on a recognized stock exchange in India can be claimed exempt to the extent the gains are re-invested in specified bonds or a residential house in India. Purchase of a residential house must be made within two years or construction must be completed within three years of transfer of shares.

There are certain restrictions, however, on the sale of new asset bought and the quantum of investment that can be made in bonds. If un-invested until the due date of filing of India tax return (i.e., 31 July), the capital gains can be deposited in a Capital Gains Account Scheme with a bank before 31 July and subsequently withdrawn for re-investment.

Tax is not deducted at source on income earned by way of sale of the shares. Tax on long-term capital gains can be either paid by way of advance tax in three instalments (30% by 15 September, 60% by 15 December and 100% by 15 March) or before filing of a tax return by way of self-assessment tax along with interest by 31 July.

Queries and views at mintmoney@livemint.com

Unlock a world of Benefits! From insightful newsletters to real-time stock tracking, breaking news and a personalized newsfeed – it's all here, just a click away! Login Now!

Catch all the Business News, Market News, Breaking News Events and Latest News Updates on Live Mint. Download The Mint News App to get Daily Market Updates.
More Less
Published: 14 May 2015, 07:26 PM IST
Next Story footLogo
Recommended For You
Switch to the Mint app for fast and personalized news - Get App