Long-Term Capital Gains Tax for NRIs - Expert Guide by NoBroker

The asset type and holding time have an impact on the long-term capital gain tax rate for non-resident individuals. NRIs can also take advantage of exemptions under Indian tax legislation with careful tax planning, especially through strategic LTCG reinvestment.

What is the Long-Term Capital Gain Tax for NRIs?

Long-term capital gain (LTCG) tax applies when an NRI sells an asset after holding it for a specified period, as per Indian tax laws. LTCG taxation is more favourable than short-term capital gains (STCG) because of indexation benefits and lower tax rates.

Key Holding Periods for LTCG Tax:

Long-Term Capital Gain Tax on Property for NRIs

Long-term capital gain tax on property for NRIs applies when an NRI sells a residential or commercial property after two years of purchase, and it is taxed as per standard capital gain tax rules.

LTCG Taxation on Property Sales:

• Flat 20% tax rate (after indexation benefits).
• TDS at 20% is deducted by the buyer before making payment to the NRI seller.
• Exemptions are available under Sections 54, 54EC, and 54F.

Example Calculation of Long-Term Capital Gain Tax for NRIs:

• Purchase Price (2015): ₹80 lakh
• Indexed Cost (2024, considering inflation adjustment): ₹1 crore
• Sale Price (2024): ₹1.4 crore
• Long-Term Capital Gain: ₹40 lakh
• Tax Liability (20% of ₹40 lakh): ₹8 lakh + surcharge & cess

Exemptions for LTCG on Property for NRIs

Section 54 (Reinvestment in Residential Property)

NRIs can reinvest in another property in India within 2 years of sale (or construct a house within 3 years). Full exemption is allowed if the new property purchase price is equal to or more than the LTCG amount. This provision is useful for reducing Long-Term Capital Gain Tax for NRIs on the sale of real estate.

Section 54EC (Investment in Capital Gains Bonds)

NRIs can invest up to ₹50 lakh in NHAI or REC bonds within 6 months of the sale. The lock-in period is 5 years.

Section 54F (Exemption for Sale of Other Assets)

If an NRI sells any long-term asset (except a house) and reinvests in residential property, the full exemption applies.

Long-Term Capital Gain Tax on Shares in India for NRIs

NRIs investing in Indian equity markets must pay long-term capital gain tax India NRI when they sell stocks or equity mutual funds after one year of holding.

LTCG Taxation on Shares & Mutual Funds

• Flat 10% tax rate on gains exceeding ₹1 lakh.
• No indexation benefits for LTCG on shares.
• TDS at 10% is deducted before crediting sale proceeds to the NRI’s account.

Example for LTCG tax Calculation

• Purchase Price (2021): ₹5 lakh
• Sale Price (2024): ₹8.5 lakh
• Long-Term Capital Gain: ₹3.5 lakh
• Tax Liability (10% on ₹2.5 lakh after ₹1 lakh exemption): ₹25,000 + surcharge & cess

How NoBroker Can Help NRIs with Long-Term Capital Gain Taxation?

• Expert Tax Consultation: Our tax professionals guide NRIs on the long-term capital gain tax rate for NRIs and exemptions.
• TDS Refund Assistance: We help NRIs claim refunds on excess TDS deducted on property or share transactions.
• DTAA & Tax Planning: We assist NRIs in benefiting from Double Taxation Avoidance Agreements (DTAA) to reduce tax burdens.
• Capital Gains Tax Calculation & Filing: Our experts calculate LTCG tax accurately, apply for exemptions, and handle ITR filing.
• Investment Guidance for Tax Savings: We provide strategies to reduce LTCG tax liabilities, including reinvestments and exemption planning.

Stock market participants and real estate investors must understand the long-term capital gain tax in India as NRIs. Planning can assist in reducing tax obligations because LTCG tax rates are lower than STCG tax rates.

NRIs can ensure compliance and improve tax savings with NoBroker's professional tax filing services. Tax filing is made simple with our end-to-end service, whether you're dealing with LTCG on shares or LTCG on real estate for NRIs.

Get in touch with NoBroker right now for assistance with long-term capital gain tax for NRIs!