Modified on: Mon, 1 Aug, 2022 at 2:33 PM
TABLE OF CONTENTS
There is no difference in the % of tax that needs to be on Capital Gains by a Resident and a Non Resident. Same rates apply for both categories. However, tax arising out of capital gains in a NRI Equity Cash account needs to be paid upfront unlike Resident accounts. Therefore, the taxes, if any, on NRI account are deducted at source which is called the TDS.
The bank with which you hold your PIS account deducts the tax at source. Tradeplus reports every transaction (secondary market buy or sell) to your bank and the bank registers them in their records. Each time a sale is executed, the bank refers back to its records to identify the date of purchase, rate of purchase and accordingly calculate tax. This tax will be deducted from the sales proceeds and only the net amount will be deposited to your PIS Bank account. If, the purchase details are not available the funds will not be deposited to your account and you will be informed about it with a request to share the purchase details.
NRO transactions are not reported to bank to be routed through a PIS Bank account as this is not a requirement anymore according to RBI. However, the tax on sale, if any, will be computed by Tradeplus on best effort basis.
Whenever, a sale is executed, Tradeplus, on a best effort basis, tries to identify the purchase detail and compute the tax if any. The tax thus arrived will be deducted from your trading ledger and will be remitted to Income Tax department on a periodical basis.