Last three years in Germany and invested in a few US stocks (held for more than 2 Years) in EUROs using the Scalable Capital broker. Now I have to move to India in April first week because of VISA expiry. As after March I am not a Tax resident of Germany, Scalable Capital Broker (Scalable Capital - Broker & Leading Robo-Advisor) wants me to close the account which forces me to sell my stocks which are at a loss. I want to hold them for a few more months. After some research, I found that I can transfer my stocks to US interactive broker (https://www.interactivebrokers.com/) which enables investments in US market globally, including india. Now my question/understanding is
After moving my stocks to this new broker, will the age of my stocks still be more than two years, and would these stocks be considered as long-term foreign investment as per Indian tax rules, and would I need to pay only long-term capital gain tax on selling them ?
I need to mention These stocks as foreign assets in my next ITR filing, right ?
Could you please confirm if my understanding is correct or help me with the above questions and further details around the topic ?
The holding period of your stocks will be considered from the date when you first bought them. Since you have been holding these for more than 24 months, it will be taxed as long term capital gains. (Tax rate: 12.5%)
You will have to mention these investments as foreign assets in your ITR for FY 2025-26 (AY 26-27), as you will be a resident in the same financial year and not the current one. To check your residential status you can click here.
Dear @Sakshi_Jain Thanks a ton for your clarification, I was concerned if the existing stocks would be considered as foreign assets or not, and IT department consider the entire investment amount (not just the capital gain) as income and tax it. so, I guess the whole point of declaring foreign assets is to - not to consider the entire investment as taxable income when we later sell and transfer money to Indian ordinary bank account, right ?
Foreign assets like stocks are not taxed as income until they are sold and the capital gains are realized. You will not be taxed on the entire investment amount—only on the capital gain (the profit) made upon the sale of the asset.
Dear @Ayushi_Joshi Thank you for your clarification. You guys are doing a great help/job. I mean, I have asked the same question to my German Tax consultant (indian) who I use for my IT return filing, but he doesn’t answer it. Seems he is not aware of the answer or doesn’t want to attend to questions without charging. Once again, thanks a ton.