The short term gains and losses from the same year will get adjusted first. If you have STCL from Foreign Shares but STCG on Indian shares in the same year, it will get adjusted. For the remaining loss from previous year, it will get adjusted with the gains remaining after current year losses are adjusted. There is no such bifurcation for where loss from previous year will first get adjusted but generally it gets adjusted with income which has higher tax rate. So, in this case with foreign STCG the losses will first get adjusted.
I have been investing in US stocks since August last year and have generally understood the rules regarding their taxation and procedure for filling up the ITR. The ITR could, however, well have been made much simpler by combining some of the Schedules/Form 67, there is a lot of repetitive data one has to fill up. Also, Schedule FA should have had a CSV template for filling in the details, which now has to be done individually for each transaction and is quite laborious.
However, one aspect which is still ambiguous is whether the accruals (CG or dividends, or interest as well as tax withheld on dividends for claiming credit under the DTAA) are to be reported on the US Calendar Year (Jan-Dec) basis or the Indian FY (Apr-Mar) basis. The brokerages which I use have a different system of providing tax documents. In the case of Vested, Schedules FA, TR and Form 67 are on a CY basis, while CG and FSI are on an FY basis. Indmoney on the other hand provides all its tax documents other than Schedule FA on an FY basis. Furthermore, the US Form 1042-S which is provided by the brokerage to be submitted along with Form 67 is on a CY basis. As per Rule 128A, “Foreign tax credit can be claimed in the year in which the taxpayer’s income corresponding to such tax has been offered or assessed to tax in India.” But what is this year: CY or FY?
Hi, My question is about reporting of RSUs withheld for tax when RSUs vest. As with most companies my company withholds the shares needed to pay the tax and the rest of the shares are granted. My question is that because these withheld shares are being sold on our behalf to recover the tax, do we have to show this amount in the Schedule CG and schedule FSI? Of course this entire transaction is included in the perquisites within Form 16 but the question is , if it has to be shown as part of Schedule CG & FSI.
Thanks @Shrutika_Shah for the response. One more follow up question , if you can answer that too please. Are we allowed to deduct the charges we incur on transferring the proceeds from the securities sold in the US to India as expenses?
@Shrutika_Shah Thanks for such an informative thread! How does the DTAA work between India and Hong Kong for dividends and capital gains? I’m looking to invest in Hong Kong Stock Exchange listed stocks.
Being a resident of India, if you invest in Hong Kong Stock exchange, tax will be withheld by the Hong Kong government on Dividend Income and Capital Gains at the applicable rate.
However, while filing taxes in India, you can claim the relief of the taxes withheld in Hong Kong and thus avoid double taxation.
I had to do ACAT Transfer to transfer US Stocks to another account. Because of this fractional shares were liquidated and sold.
But for some reason the previous broker did not provide the Cost Basis of the shares.
When I asked my previous broker they mentioned ACAT transfer will not be part of P&L report because I am not selling any shares so there will be no capital gain/loss for me.
Is this correct ? For ACAT Transfer I am not liable to pay any tax ? Kindly help on this information.
In the case of an ACAT transfer, only the full shares are transferred. Hence, the fractional shares that you had may have been liquidated and sold. This will be treated as your income and hence would be taxable.