Why is TDS being charged in my NRI Non-PIS account?
Tax Deducted at Source (TDS) is applied to NRI Non-PIS accounts at FYERS in accordance with Indian income tax and foreign exchange laws. When an NRI earns capital gains from securities sold in India, FYERS is required to deduct applicable tax before crediting proceeds.
Legal framework for TDS on NRI Non-PIS accounts
TDS on NRI capital gains is mandated by Indian tax and foreign exchange regulations.
- Section 195, Income Tax Act, 1961: Requires deduction of tax at source on income payable to non-residents, 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 to comply with repatriation and reporting norms.
Types of capital gains covered under TDS
TDS applies to gains from listed and unlisted securities in a Non-PIS account.
| Capital gains type | Holding period | Applicability |
|---|
| Short-Term (STCG) | Less than 365 days | Equity and non-equity instruments |
| Long-Term (LTCG) | More than 365 days | Equity and non-equity instruments |
Other taxable income for NRIs
In addition to capital gains, certain India-sourced income may also be taxable/TDS-applicable.
| Income type | Tax applicability |
|---|
| Capital gains (Equity & F&O) | Taxed based on segment and holding period |
| Dividends | Subject to TDS before credit |
| Interest on NRO account | Taxable in India |
| Interest on NRE account | Generally exempt from tax in India |
| Rental income | Taxable as income from house property |
| Business or other income | Taxed as per applicable provisions |
FYERS does not provide tax advice. For personalised guidance or DTAA-related claims, consult a qualified tax professional familiar with NRI taxation.
What if…
| Scenario | What you should know |
|---|
| Unaware that TDS was deducted | Check your FYERS ledger/contract note; TDS entries are recorded per trade or settlement. |
| Need a refund or credit | Download Form 16A from FYERS and use it while filing ITR or a DTAA claim, as applicable. |
| Rate seems too high | Rates are applied as per law; verify asset class, holding period, and applicable surcharge/cess. |
Last updated: 12 Aug 2025
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