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Residents can use any unused basic exemption against special rate capital gains like short-term gains on listed shares. Non-residents cannot, so the full gain is taxed at the special rate.
ITR
Exemption limit not usable against special rate gains for NRIs
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Provisions
Sec 111A, Income-tax Act 1961 (now Sec 196, Income-tax Act 2025); Sec 112A, Income-tax Act 1961 (now Sec 198, Income-tax Act 2025)
Analysis
Say an NRI has only ₹3,00,000 short-term gain on listed shares sold after 23 July 2024. It is taxed at 20%, so about ₹62,400 with cess, even though total income is low. A resident in the same case would adjust the exemption limit first. Plan sales accordingly.
Close
- Identify special rate gains.
- Do not reduce them by the exemption limit as an NRI.
- Compute tax at the special rates.
- Claim any TDS.
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