Income Tax from foreign shares in India and its taxability

I am a permanent indian resident. If I wish to receive foreign income from stocks trading outside India then will that amount be taxable?

Hey @Nihal ,

Since you hold the status of a resident, your global income is taxable. Thus, you must report the income on sale of foreign shares and pay tax on it at applicable rates. Check out our Learn Center resource for more information about NRO and NRE Accounts- Guide: Income Tax for NRO and NRE Accounts

Hey @Nireka

Indian investors can invest in US stocks from India subject to RBI’s LRS guidelines. There may some RBI restrictions to hedge the foreign stock positions. For tax implications, any dividends income from foreign stock will be taxed in India subject to India- USA DTAA, as dividend is taxed @25% in USA.

Any capital gain from sale of foreign stocks are also taxed in India. When foreign stocks are sold within 24 months then it will be treated as short term, other wise long term. In case of short term gain, slab rates will apply and in case of long term gain, 20% rate with indexation or 10% without indexation will apply. Moreover, investors can claim foreign tax credits to avoid double taxation.

Can I claim credit of the tax deducted in the USA on income from the sale of shares of my company (ESOP)?

Hi @Dixita

If you are a resident in the financial year, you must report such foreign income in the ITR in India. As per the DTAA agreement between India and the USA, the same income is not taxable in both countries. Thus, if you have paid tax on such income in USA, you can claim the credit of such tax paid by filing Form 67. Tax relief shall be lower of tax paid in USA or tax payable in India and can be reduced from total tax liability in India.

You can refer to the below article for detailed provision of DTAA between India and the USA: DTAA between India and USA - Learn by Quicko
Form 67 : Claiming Foreign Tax Credit - Learn by Quicko

Hope this helps :slightly_smiling_face:

Hi, Vivek here.
My wife works for a software company and was on site in Netherlands for a period of 3 months. This was in 2019. As per her form 16, she is eligible for exemption u/s 90/90a, calculated exemption as per her company Form 16 is 17,000 rupees. She has followed all procedure while filling her ITR, but, she has received notice from IT authorities to pay the tax amount with interest. When consulted with customer care number, they asked us to file a revised return, which again has been rejected…now, they say pay 21,000 rupees along with interest. Kindly guide how to proceed further…we are worried…Thank you. Vivek 9686969957

Hey @Vivekramaiah, you shall soon receive a call from our team for better understanding your situation. I would also like to advise you to not share any personal details on the public forum for privacy reasons.