AN NRI who has sold shares in India (through ICICI Direct.com) and paid STT has claimed complete
exemption for LTCG for the Asst. year 2010-11. According to him the ITO says that such exemption
is available only for resident assessees. Is the view of the ITO correct ? -- RAJU (Student)
NRI Entitled to LTCG Exemption on Shares Sold with STT Paid, Clarifies Section 10(38) of Income Tax Act. An NRI sold shares in India through a recognized stock exchange, paid Securities Transaction Tax (STT), and claimed a complete exemption for long-term capital gains (LTCG) for the assessment year 2010-11. The Income Tax Officer (ITO) contended that this exemption is only for resident assessees. In response, it was clarified that under Section 10(38) of the Income Tax Act, LTCG on equity shares or equity-oriented funds sold through a recognized stock exchange with STT paid is exempt, applicable to both residents and non-residents. Section 115D does not make such income taxable for NRIs, and NRIs can choose between special or general tax provisions. (AI Summary)
TaxTMI 
TaxTMI 
