Tax and Regulation
Can we claim credit for the 20% TCS?
Yes! The tax paid should not be confused as an additional cost or tax on the fund transfer. The TCS paid can be claimed as a credit against tax payable when filing income tax returns. If the TCS is higher than your tax payable, you will receive a ...
What is the definition of Long-term Capital Asset (LTCA) and Short-term Capital Asset (STCA) w.r.t foreign listed securities? What are the tax rates if any capital gain (Long term or Short term) is accrued on sale of such Capital Assets?
If your Residential Status as per the Income Tax Act is ‘Resident’, your worldwide income is taxable in India. This would mean that Capital Gains earned on US stocks will be taxable in India. Have you held the stocks for more than24months and the ...
Is there any tax implication on transfer/remittance of funds on the platform for making investment in foreign securities?
Transfer of funds into an external platform would not result in any profit/gain as it involves only transfer of funds to self. Further no transaction has been undertaken / executed resulting in any transfer of any asset. However, w.e.f. 1st October ...
Can I set off the losses incurred on transfer of foreign listed securities with my other income in India?
All Short-term capital losses arising on sale of foreign listed securities can be set off against both short term and long-term capital gains in India. However, any long term capital loss arising on sale of foreign listed securities can only be set ...
Am I liable to pay tax when I remit the funds back to India?
No, the tax incidence is on the event of "Transfer" or a "Sell" of securities by the client on Stockal platform. The remittance of any funds lying outside India has no connection with the tax incidence.
Can I take indexation benefit on transfer of foreign listed securities?
Indexation is a benefit given to adjust the cost of capital asset held for long term with respect to inflation. Since foreign securities are considered as unlisted, they must be held for at least 24 months to qualify as Long Term Capital Asset and ...
Can I carry forward the losses incurred from dealing in foreign listed securities under Income Tax Act?
Yes. The losses arising from the sale of foreign listed securities can be carried forward up to eight consecutive years while losses from speculative business can be carried forward for a period of 4 years. Disclaimer: This article is for ...
Do I need to pay tax on foreign dividend both in US and India? Can I claim credit for the taxes paid on such dividend in India?
Yes, tax needs to be paid on Foreign dividend both in US and India. However, an Indian Resident individual can claim Tax credit of taxes paid in US by virtue of Double Taxation Avoidance Agreement (DTAA) entered into between India and US by filing a ...
What is the tax on dividend received from foreign listed securities?
A percentage of TDS applies only on the customer’s dividend earnings. This is when stocks in their portfolio give out dividends to their investors. US and India have a Double Taxation Avoidance Agreement (DTAA). This means that the customer pays tax ...
Can a Resident Indian utilize more than the amount specified (USD 2,50,000) under LRS for buying foreign listed securities?
An Individual cannot remit more than USD 2,50,000 in one financial year under LRS scheme. However, if a resident individual investor who is not permanently resident in India after having remitted their entire earnings and salary, wishes to further ...
Is there a limit on maximum number of foreign securities to be held by an Indian Resident?
There is no maximum limit on the number of foreign securities that can be held by an Indian resident. However, under the LRS (Liberalized Remittance Scheme) an amount up to USD 2,50,000 per resident individual can only be remitted outside India in ...
What are the tax implications in India where my shares get vested with my nominee in case of my death?
There is no applicable estate duty in India on vesting of properties with the nominee in the event of death.
Can I claim the fees and brokerage paid as a deduction for computing my capital gains tax in India?
Yes, any cost incurred on account of sale or transfer of asset is allowable as a deduction while computing the Capital Gains. However, it is pertinent to note that AUM charges and annual subscription charges incurred cannot be claimed as deduction as ...
Am I expected to report my holdings or gains in India an annual basis - even if I don't have a tax liability? If yes, under what section and what forms do I need to report the same in India?
Where a person is a ROR he/she is required to file his/her income tax return if the person has any kind of foreign assets. The reporting in this regard would be as follows: 1. Details of foreign assets and income from any source outside India ...
What are the TCS provisions (including thresholds, if any) in regards to the overseas investment made by an investor?
From 1 October 2023, Authorised Dealers (typically banks and remittance companies) will collect 20% TCS for remittances made for international investments exceeding a threshold of INR 7 lakh.
What insurance or protection do I get for my account?
US brokerage ecosystem recommends that ever investor account should have insurance. Stockal's brokerage partner, DriveWealth LLC, a member of the Securities Investor Protection Corporation (SIPC), will serve as the custodian for your securities ...
What is LRS?
Instituted by the RBI, the Liberalized Remittance Scheme or LRS is a set of policies that stipulates the maximum amount and purposes of remittance. Under the LRS, an individual can annually invest up to USD $250,000 in any country, without seeking ...
How does taxation work?
There is no TDS (Tax Deduction at Source) for your stock market capital gains in the U.S. So when you send money back to your Indian bank account, the broker in the U.S. does not deduct any tax on it. You will have to pay Short-term Capital Gains Tax ...