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TMI BlogTaxability of Long-term Capital Gains for NRIX X X X Extracts X X X X X X X X Extracts X X X X ..... AN NRI who has sold shares in India (through ICICI Direct.com) and paid STT has claimed complete exemption for LTCG for the Asst. year 2010-11. According to him the ITO says that such exemption is available only for resident assessees. Is the view of the ITO correct ? -- RAJU (Student) - Reply By ROHAN THAKKAR - The Reply = Dear Sir, If the equity shares or equity oriented fund a ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... re sold through recognised stock exchange and STT is paid thereron, then the entire long term capital gain is exempt. The exemption has been provided in section 10(38) of the Income Tax Act. The section reads as under: Section 10 (38) any income arising from the transfer of a long-term capital asset, being an equity share in a company or a unit of an equity oriented fund where ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... (a) the transaction of sale of such equity share or unit is entered into on or after the date on which Chapter VII of the Finance (No. 2) Act, 2004 comes into force; and (b) such transaction is chargeable to securities transaction tax under that Chapter : Provided that the income by way of long-term capital gain of a company shall be taken into account in computi ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ng the book profit and income-tax payable under section 115JB . Explanation . For the purposes of this clause, "equity oriented fund" means a fund (i) where the investible funds are invested by way of equity shares in domestic companies to the extent of more than sixty-five per cent of the total proceeds of such fund; and (ii) which has been set up u ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... nder a scheme of a Mutual Fund specified under clause (23D) : Provided that the percentage of equity shareholding of the fund shall be computed with reference to the annual average of the monthly averages of the opening and closing figures Thus, section 10(38) no where specifies that it is available to a resident only and it will not be available to non resident. Thus, the benefit ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... of said section can also be availed by the NRI. Neither section 115D has stated that such income be taxable in the hands of NRI though it contains a special provision regarding taxability for Non Residents. Further there are special provisions regading computation of income for NRI. However, NRI is having an option whether he wishes to continue to be governed by the special provisions or gene ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... ral provisions. [ Section 115-I] Regards, Rohan Thakkar 922 872 05 36 - Taxability of Long-term Capital Gains for NRI - Query Started By: - T.N. SRIVARADA DESIKAN Dated:- 17-8-2011 Income Tax - Got 1 Reply - Income Tax - Discussion Forum - Knowledge Sharing, reply post by an expert, personal opinion Tax Management India - taxmanagementindia - taxmanagement - taxmanagementindia.com - TMI ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... - TaxTMI - TMITax ..... X X X X Extracts X X X X X X X X Extracts X X X X
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