NRI Taxation

We give broad details of taxation structure in India. Taxation is low.


Real Estate

Taxation On Real Estate.


Debt Mutual Fund

Debt and Debt Mutual Fund

Equity Mutual Fund

Equity and Equity Mutual Fund

Real Estate

If you hold real estate for less than 2 years, than it is considered as short-term capital gain STCG. Such gains are taxed at the normal tax rate. If you hold real estate for more than 2 years, than it is considered as longterm capital gain (LTCG). In this case, there is an advantage of indexing based on the period of your holding. LTCG is @ 20% on the Capital Gain worked out after the indexation.

Debt and Debt Mutual Fund

It is almost identical to Real Estate. If you hold for less than 3 years, it is short-term capital gain and is taxed normally. If you hold for more than 3 years, it is considered as long-term capital gain and is taxed @20% on capital gain. In computation of capital gain, one can get indexation benefit based on the period of holding.

Equity and Equity Mutual Fund

Here taxation is low. If you hold equity shares or equity mutual fund for a period of 1 year and above, it qualifies to be a long-term capital gain (LTCG). There is 10% LTCG from listed equities and mutual fund. Dividends are taxed @10%. If holding period is less than one year, it is considered as short-term capital gain (STCG). It is taxed @15%.

Above tax structure clearly suggests that India is very much liberal on taxation. Taxes are always payable on the gain registered. To the extent one invest and hold, there are no taxes to be paid. In India, one can invest in the right assets and hold them for long time and make changes to the extent required; then there is hardly any tax liability. This is the most beautiful way of creating wealth.

There is Double Tax Avoidance Treaty (DTAA) between India and most of the countries including USA, UK, and Canada etc. So you can get set off in payment of taxes of your country of residence to the extent of taxes paid in India. US residents should note that India has signed treaty for Foreign Account Tax Compliance Act (FATCA). So Indian entities are required to report investment of US residents held in India to US Authorities.