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As per Indian Income Tax Act, 1961, any Indian person staying outside India more than 182 days is considered as NRI (Non-Resident Indian).
An NRI (Non-Resident Indian) is an Indian citizen who is either residing outside India for employment, business, or other valid purposes, or staying abroad for an indefinite period. As per the Income Tax Act, an individual qualifies as an NRI if they spend less than 182 days in India during a financial year.
Categories of NRIs:
- Indian citizens who stay abroad for employment or for carrying on a business or vocation or for any other purpose in circumstances indicating an indefinite period of stay outside India.
- Indian citizens working abroad on assignments with foreign Governments/government agencies or International/Regional Agencies like the UNO,IMF,World Bank, etc.
- Officials of the Central and State Governments and Public Sector Undertakings deputed abroad on temporary assignments or posted to their offices (including Indian Diplomatic Missions) abroad.
PIO is person of Indian Origin. He/ She can open account in NRI capacity.
A citizen of any country (other than a citizen of Bangladesh or Pakistan) is deemed to be a Person Of Indian Origin (PIO), if,
- He, at any time, held an Indian passport, or
- He or either of his parents or any of his grand parents was a citizen of India by virtue of the Constitution of India or Citizenship Act, 1955, or
- A spouse (not being a citizen of Bangladesh or Pakistan or Sri Lanka) of an Indian citizen or of a person of Indian origin is also deemed to be PIO.
Yes. Authorized dealer have been permitted to grant loans/overdrafts abroad to NRIs through their overseas branches and correspondents against collateral of the shares/debentures of Indian companies held by them, provided the concerned shares/debentures were acquired on repatriation basis.
- Off market transfers between NRI accounts are not allowed under PIS.
- NRI can receive shares as gift from his close relative(relative” as defined under Section 6 of the Companies Act, 1956). A proper gift deed needs to be executed for this transfer. Also it has to be submitted to bank along with declaration of particulars of shares. Transfer of shares from NRI to resident Indian is not allowed.
- Shares transfer from NRE to NRO demat account or NRO to NRE demat account is not allowed under PIS.
( Kindly refer master circular of foreign investments on RBI for more details regarding shares transfer.)
No. In case of NRIs all trades need to be settled on bill to bill basis.
Money can be transferred from NRE to NRO account, however, vice versa funds transfer is not allowed.
No. Mutual funds and IPOs can be applied through Non PIS Account.
Yes, he can close his NRI account and open new resident trading and demat account with us by submitting the required proofs of residential status and can get shares transferred from NR demat account to resident demat account.
As per section 6(5) of FEMA, NRI can continue to hold the securities, which he/she had purchased as a resident Indian, even after he/she has become a non-resident Indian, on a non-repatriable basis.
Conversion procedure would be as follows:
- Please close your resident trading account with the help of the Sharekhan Account Closure form. Don’t mention Demat Account if it has any holdings.
- Submit NRI Account Opening Form along with all due documents for opening your NRO account.
- Once the NRI Trading Account and Demat Account are opened, submit the Closure cum Transfer form and get your shares transferred from Resident Demat Account to NRO Demat account.
- Please note that all existing holdings need to be updated with the Bank in the specified format for TDS calculation for future sale.
- You can mark an email to nridesk@sharekhan.com for relevant forms and other details in this regard.
As per regulatory guidelines, Tax (if applicable) has to be deducted at source (TDS) for all the profits made in the equity ,ETF & Derivative market transactions.
Tax deduction at source rate is different as per the tenure of the investment. It can be classified into
- Short-term capital gain - If the period of holding is less than 1 year the TDS rate would be 15.54% for the current Financial Year
- Long-term capital gain - If the period of holding is more than 1 year the TDS rate would be NIL.
TDS CHARGES
| NET GAIN | EQUITY SHARES | ||
|---|---|---|---|
| Listed on recog exch with STT (paid on acquistion and transfer) | Without STT (STT not paid either on acquistion or at the time of transfer) | ||
| Listed on Recog. Exch. (sold off market) | Unlisted | ||
| LONG TERM (9) | |||
| With Surcharge | 11.96% (4)(9)(13)(14) | 23.92% (1) (6)(13) (9) | 11.96% (1) (6)(13)(9) |
| With out Surcharge | 10.4% (4)(13)(14) | 20.8% (1)(6)(13) | 10.40% |
| Period of Holding (5) | >365 days | >365 days | >730days (12) |
| SHORT TERM(9) | |||
| With Surcharge | 17.94%(9)(2)(13) | 35.88%(3)(13) | 35.88%(3)(13) |
| With out Surcharge | 15.60% | 31.20% | 31.20% |
| Period of Holding (5) | |||
Note - TDS is deducted by Banker. For further clarifications, kindly get in touch with your PIS Bank.
