How are Stockal investments taxed?

Investor TypeTax Implication
Resident & Ordinarily Resident (ROR) 
Global income is taxed in India

Taxes must be paid in India on all foreign income, including income from U.S. stock holdings.
Resident but Not Ordinarily Resident (RNOR) & Non-Resident (NRI)
* Foreign income is taxable in India only if it is received/accrued in India by a business controlled in/set up in India.

* Taxes must be paid on earnings from U.S. stocks received in India or from a business controlled in/set up in India (like Infosys, Tata Motors, etc.)

Taxable CategoryDetails
Tax Deduction at Source (TDS)
There is no TDS for stock market capital gains in the U.S. So when you send money back to your Indian bank account, the broker in the U.S. does not deduct any tax on it.
Capital Gains
You will have to pay Short-Term Capital Gains/Long-Term Capital Gains Tax in India, as applicable
Dividend Earnings
* Dividend earnings received as cash or reinvested is taxed in India at the applicable income tax slabs by adding it to your current income.

* 25% TDS is applicable on dividend earnings.
Since India and the U.S. have a Double Taxation Avoidance Agreement (DTAA), you pay dividend tax only once.
For TDS paid, you must download the 1042-S Form under Reports on Stockal. Use this while filing your taxes in India to show that you have already paid taxes on this income. Hence, you will be able to offset the tax withheld in the U.S. and adjust it with your tax liability in Ind

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