# NRI Capital Gains Tax — Shares, Mutual Funds & Investments

> NRIs pay tax in India on gains from Indian shares and mutual funds. For transfers from 23 July 2024, listed equity and equity funds held over 12 months are taxed at 12.5% on gains above ₹1.25 lakh a year, and at 20% if held for 12 months or less. Brokers and fund houses deduct TDS at source on NRI redemptions. Debt funds bought from April 2023 are taxed at slab rates. NRIs can't use the basic exemption limit to reduce these special-rate gains.

Practice: NRI Tax Services — https://www.industax.com/services/nri-tax/

TDS on NRI redemptions is computed on the gain at the applicable rates plus surcharge and cess, so the ITR often shows a refund — especially when losses can be set off or gains are below ₹1.25 lakh for equity.

Unlisted shares are taxed at 12.5% if held for more than 24 months and at slab rates otherwise. A few treaties limit India's right to tax certain gains, so the country of residence matters; we check the DTAA before filing.

Our NRI capital gains service reconciles broker and AMC statements, applies grandfathering where relevant, offsets losses and files the ITR with the correct schedules.

## Key facts

| Item | Detail |
| --- | --- |
| Listed equity / equity MF LTCG | 12.5% above ₹1.25 lakh (held > 12 months) |
| Listed equity / equity MF STCG | 20% (held ≤ 12 months) |
| Debt MF (bought from 1 Apr 2023) | Slab rates |
| Unlisted shares LTCG | 12.5% (held > 24 months) |
| NRI limitation | No basic-exemption adjustment against special-rate gains; no 87A rebate |

## Who needs this

- NRIs with Indian demat or mutual fund holdings
- NRIs selling investments before or after moving abroad
- NRIs with excess TDS on redemptions

## What's included

- Broker and AMC statement reconciliation
- Loss set-off and carry-forward
- DTAA review
- ITR filing and refund tracking

## Documents

- Capital gains statements from brokers and AMCs
- Contract notes
- Form 26AS / AIS
- Tax residency certificate (for DTAA)

## Process

1. **Reconcile** — Every sale matched with cost and TDS.
2. **Compute** — Gains, losses and treaty position worked out.
3. **File** — ITR-2 filed; refund tracked.

## Also covers

- **NRI stock tax** — Listed and unlisted shares.
- **NRI mutual fund tax** — Equity and debt fund redemptions.
- **NRI investment tax** — Bonds, deposits and other Indian investments.

## FAQs

### Is TDS deducted on NRI mutual fund redemptions?

Yes. Fund houses deduct TDS on the capital gain at the applicable rate plus surcharge and cess.

### Can an NRI claim the ₹1.25 lakh LTCG exemption?

Yes, the ₹1.25 lakh exemption on listed equity LTCG applies to NRIs as well.

### Do I need to file an ITR if TDS was already deducted?

It is often worth filing to claim a refund of excess TDS or to carry forward losses, and it is required if your income exceeds the basic exemption limit.

## Official sources

- Income Tax e-Filing portal: https://www.incometax.gov.in/

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Canonical page: https://www.industax.com/services/nri-tax/nri-capital-gains-tax
Publisher: Indus Tax — CA-led tax and compliance firm (https://www.industax.com). Contact: info@industax.com, 9059139258.
This is general information, not advice for your specific facts.