26 June, 2025 at 3:25 pm
NRIs are allowed to get shares of the listed and unlisted companies with mutual funds that are subject to the Foreign Exchange Management Act. The tax date depends on the instruments and holding period, which is long-term capital gains, in which you got listed equity and mutual funds with an 10% of holding period greater than 12 months and on other assets if the holding period is more than 2 years then tax liability would be 10% and short-term capital gains have a holding period of less than 12 months then the gain is termed as short term capital gainand the tax liability will be 15% which is provided by the STT.
NRIs holding shares of any FIIs or FPIs then they need to pay 10.4% TDS, and if they have any share holdings of a company, then they have to pay 20.89% TDS up to 1 crore, between 1-10 crore, they need to pay 21.2% TDS, and if the amount is above 10 crore, then they need to pay 21.8% TDS effectively.
Tax dividend on an investment made I shares in India or mutual funds, then it will come under the tax obligations because it is subject to pay tax at 20% under chapter VI-A of the investments made in the public provident funds, life insurance, and national pension schemes.
Yes, NRIs need to pay a dividend, which is taxed at 20% along with cess. But on the long-term capital gains, it is taxed at the same rate, which is 12.5% with cess. The difference between dividend tax and the long-term capital gain tax is irt can have a holding period of less than 2 years, while stocks can be held high.
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