Capital Gain Computation

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Capital Gain Computation for NRIs – N.D. Savla & Associates

For Non-Resident Indians (NRIs), the correct computation of capital gains tax in India is crucial when selling property, shares, mutual funds, or other investments. Errors in calculation often lead to excess tax deductions at source (TDS), missed exemptions, or delays in repatriating funds abroad. At N.D. Savla & Associates, we provide end-to-end assistance in capital gain computation for NRIs, ensuring compliance, accuracy, and maximum tax efficiency.

Overview

Capital gains are calculated as the difference between the sale consideration and the indexed cost of acquisition/improvement, adjusted for exemptions. The tax liability depends on the holding period of the asset:

  • Short-Term Capital Gain (STCG):

    • Property: Held < 24 months

    • Securities (equity shares/equity mutual funds): Held < 12 months

    • Taxed at normal slab rates (property) or 15% (listed equity/STT-paid transactions).

  • Long-Term Capital Gain (LTCG):

    • Property: Held ≥ 24 months

    • Securities: Held ≥ 12 months

    • Taxed at 20% with indexation (property) or 10% on gains above ₹1 lakh (listed equity)

Features

  • Accurate classification into STCG or LTCG

  • Indexed cost calculation using Cost Inflation Index (CII) for LTCG

  • Assistance in applying exemptions under Sections 54, 54EC, 54F

  • Support in reconciling TDS deducted by buyers or brokers with final liability

  • Guidance on special provisions for NRIs under Section 115E

  • Advisory on DTAA relief to avoid double taxation

Documents Required

  • Passport & PAN card

  • Property purchase deed / sale deed

  • Demat account or PIS (Portfolio Investment Scheme) statements

  • Bank account statements (NRO/NRE)

  • TDS certificates (Form 16A / Form 26AS)

  • Investment agreements / mutual fund statements

  • Proof of reinvestment (if claiming exemptions)

Procedure

  • Data Collection – Gather all purchase, sale, and investment details.

  • Classification – Determine STCG or LTCG based on holding period.

  • Indexation – Apply inflation index for long-term property or asset gains.

  • Computation – Deduct indexed cost and eligible expenses from sale value.

  • Exemption Application – Apply Sections 54, 54EC, or 54F to reduce liability.

  • TDS Adjustment – Match tax deducted at source with actual liability.

  • ITR Filing – File return with capital gains schedules and claim refunds if excess TDS paid.

Why This Matters

Capital gain computation for NRIs requires applying multiple rules — indexed costs, exemptions, DTAA relief, and TDS adjustments. Missteps can lock up large amounts in taxes or lead to non-compliance. With N.D. Savla & Associates, your NRI capital gains tax computation is managed with precision, ensuring the lowest possible tax burden while remaining fully compliant with Indian laws.