Tax implication on overseas Share trading at NYSE

Tax implication on overseas Share trading at NYSE

As per my borker Interactivebrokers,com, an Indian Citizen can do share trading in NYSE. But I am not clear about Tax implicationof this.
As per my knowledge, This will be treated as capital Gains tax in India. But if I do trading in shares, will this still be considered as capital Gains tax or this will fall under Income Tax as per salaried person.

Also will this have tax implication at US? Shall I be responsible for paying tax return in US?

Please note I am a salaried person, Resident indian and this stock trading is my hobby or second income.

Asked 7 years ago in Income Tax

Hi,

Buying and selling of shares will result in capita gains as per Indian Income Tax laws. However, long term capital gain will be taxed at the rate of 20%, subject to indexation benefit. Short term capital gain will be taxed as per the slab rate. However, in case the volume and frequency of trading is high, then the tax department can treat your activity as business, and the profit from such business will be taxed as per the slab rate.

Regarding the taxation in USA, I would recommend that you consult a professional who practises in US Tax laws.

Regards

CA Keerthiga Padmanabhan

M.Com., CA, LLB

Keerthiga Padmanabhan

CA, Greater Mumbai

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Sir as per our view if you are trading in NYSE then you need to pay taxes there. But you need to declare the Income earned and taxes paid on NYSE in India and claim relief as per Double taxation avoidance agreement (DTAA) while filing Income tax Returns.

Shyam Sunder Modani

CA, Hyderabad

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Hello,

You are very much correct in your interpretation that if you invest it will be traded as Capital Gains and in case you trade it will be considered as Business Income.

Yes, you may be liable to pay taxes in the US but it is advisable to consult a professional in US on the same.

Trust this clarifies your query.

Feel free to call / get back in case of further clarifications.

Thanking You.

Regards,

Rohit R Sharma

BCOM, ACA, LLB-GEN, CERT. FAFP

Rohit R Sharma

CA, Mumbai

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