US based NRI's - How do you guys invest in equity now?

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google search landed me on below page

Hi All,

Need help guidance from senior members who have investing in Indian equities from USA through PIS route.

I wanted to understand if I would owe taxes on any unrealized gain for a given tax year. Below please find an example:

a) I buy stock A worth Rs. 10 lakhs on 01/01/2017
b) Investment value in stock A grows to Rs. 40 lakhs on 12/31/2017 and still remain invested (Rs. 30 lakhs unrealized profit).

Do I owe taxes on Rs. 30 lakhs unrealized profit for the year?

If I go by what has been mentioned in below article and assume that “Option 1: Election to mark-to-market PFIC” will to be applied on direct equities as well, then I would owe taxes on Rs. 30 lakhs of unrealized gain in my above example.

Any guidance/suggestion from senior members who have been filing/reporting taxes to IRS for their Indian direct equity investments will be much appreciated.

Thanks,
Amit

As per my understanding

The article you have attached is for Mutual fund holding and the same goes for Fixed deposit and PPF account. However PIS route is for direct investment into equity and that will be treated as equity profit and loss (ie it has to be added as P/L every year) however you may have to fill FATCA form for current holding with IRS every year. However you may want to confirm the same with a CPA.

The question is for US based NRIs related to LTCG tax:

Does US based NRIs need to pay LTCG tax in India for gains on NRE demat Account? Is it fine to pay taxes only in US as US tax resident.

If at all paying taxes in India, how are you handling as tax years different (in US Jan-Dec, in India April-March)

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[Slightly Offtopic]

Cross posting for the meetup in Bay-Area/SanFrancisco as several posters here are likely in USA: Meet up in San Francisco / Bay Area

Admins: Please feel free to take actions, if irrelevant here

Does anyone have a good way to compute the STCG and LTCG using FIFO method esp. when purchasing securities in various buy quantities and various buy prices, and doing the same at selling time. I want to make it easy to show it for the Indian taxes and USA taxes.

Thanks.

Hi Raj

I have a NRE, NRO and PIS account set up with Yes Bank. I want to setup the the demat and trading account with Zerodha now. Can you please tell me who is your contact at Zerodha?

Karan

Mine was setup a year ago. Sales folks at these companies change very fast, but try priyanka.d@zerodha.com. She was account manager sales. Otherwise, just share your details at the site.

I am with zerodha…but still I am paying rs 88 per each contract to axis…

Any advise…how to get rid of this fee

Hi Raj

How long did it take to open the account at Zerodha and did you do it from USA? Did you send all the documents from here?

I want to set up an NRE PIS account. Did you do NRE or NRO? I will reach out to Zerodha.

Thanks

Karan

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Source -

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below might be old requirement.

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NRIs, we need to become more active here…

There are so many things to evaluate, but not getting replies. We might not have too many NRIs or they do not know about this Forum Topic.

Taxation is COMPLEX since it has to be dealt with on BOTH sides of the ocean.

KKP Investor

Guys did anyone have a look at this - https://zerodha.com/z-connect/zerodha/open-an-account/nro-non-pis-account-opening ? Do we now have an option to not to go through the hassle of PIS?

Pis is the most straightforward
What is the hassle
You incur a 100 to 150 rs cost and can’t easily move accounts

The post says use nro account
So you can’t easily convert and transfer money back
Rbi also has a 5% surcharge to convert resident money to non resident money

Can you please provide the RBI circular reference for the 5% surcharge you have mentioned.

I am not sure if you have first hand experience with PIS, but here I will outline a few based on my first hand experience with HDFC PIS (NRO) and FundsIndia.

  1. The cost per transaction is rougly 400-500 Rs. There is ledger update charges + transaction charge + GST. The only way to reduce is if I do multiple transactions in one day, which is not something that I can do, since my desired stock sale price may not reach as per my wish. :slight_smile:
  2. You are hinting at re-partriation in your point (‘transfer money back’.) Please remember that you need an NRE PIS account for that. If you are like me and have an existing portfolio (while you were still resident,) then you would have by now converted to NR demat account (linked to NRO PIS account). So, repartriation is not an option anyway for that money. You will have to pay TCS of 5% (maybe on amount exceeding 7.5 lac if I recall correctly) if you wish to do an outward remmittance via your bank.
    The point is, if you want repartiation, then you need NRE PIS account (which means additional annual charges about 1000 INR) + your existing NRO PIS account (again 1000 Rs. per year.)

Please check with your bank
You can repatriate
As you said there is a 5% surcharge
You need your ca letter that tax has been paid
If your bank doesn’t do it change to ICICI

Secondly the difference between resident demat and pis demat is the reporting charge of rs 120 per transaction

I get a brokerage rate of 0.010% and all other costs are same as regular demat

Other than that I have a wait period of 2 days after I sell as my account is cash only, nri are not allowed f&o segment

I think rs 120 reporting charge is not much unless you’re buying every day

Reporting charge is per day not per script on the days I buy or sell

I was waiting for this option since long as I did not want to go via PIS due to exuberant charges.
This option does seem viable , I am just waiting to get my documents attested which is quite a pain at this point of time.

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