Why am I being charged TDS in my NRI Non-PIS account?
TDS (Tax Deducted at Source) is applied to NRI Non-PIS accounts in accordance with Indian tax and foreign exchange laws. When an NRI earns capital gains by trading in Indian securities, FYERS is legally required to deduct tax before crediting proceeds to the account.
Legal basis for TDS on NRI Non-PIS accounts
- Section 195 of the Income Tax Act, 1961:
Mandates tax deduction at source for any income arising to a non-resident, including capital gains from the sale of shares, bonds, and other securities in India. - FEMA regulations:
Under the Foreign Exchange Management Act, NRIs must receive sale proceeds net of applicable taxes. This ensures compliance with repatriation norms and tax transparency. Capital gains covered:
- Short-Term and Long-Term gains on Equity and Non-Equity instruments
- Gains from listed and unlisted securities held in a Non-PIS Demat account
What if...
| Scenario | What you should know |
|---|
| You are unaware of TDS being deducted | Review your FYERS ledger or contract note; TDS entries are listed per trade or settlement |
| You want to claim a refund or credit | TDS certificates (Form 16A) can be downloaded and used to file ITR or claim DTAA benefit |
| You think the rate is too high | TDS is applied as per law—verify asset class, holding period, and applicable surcharge/cess rules |
Always consult a tax advisor for cross-border taxation or claiming credit under the Double Taxation Avoidance Agreement (DTAA), especially if you reside in a tax treaty country.
Last updated: 19 Jun 2025