How NRIs Can Save Tax on Capital Gains from Investments in India
When you invest in India, the profits you earn from selling capital assets are known as capital gains. These gains are taxed based on how long you hold the investments, short-term or long-term.
But now here’s some good news: Indian citizens and Persons of Indian Origin (PIOs) who are Non-Resident (NRIs) can claim a complete exemption on long-term capital gains (LTCG) under certain conditions.
For Example, if an Indian resident invests ₹10 lakhs in the stock market and after a few years it grows to ₹20 lakhs, when he sells the stocks, then he will have to pay LTCG tax on the profit of ₹10 lakhs.
But for NRIs, if they make an investment in specified assets, they have to pay zero tax on their capital gains.
How NRIs can pay zero % tax on Capital Gains:
- The money you are investing in the specified assets must be brought in convertible foreign exchange.
- The sales proceeds are reinvested back in specified assets, subject to a lock in period.
Conclusion:
If you’re an NRI looking to grow your wealth through Indian investments, this is one of the most rewarding tax benefits available. You can legally pay zero tax on long-term gains by simply planning your investments and reinvestments.
At KDP Accountants, we specialize in regularly assisting NRIs with investment planning, FEMA compliance, and tax filings to help them make the most of such opportunities. For any queries, reach out to us at enquire@kdpaccountants.com