Income Tax

FEMA/RBI Regulations

Income From Shares, Mutual Funds - Dividend, Capital Gains

During last 10 years, Indian share market has done well. There are certain regulations for foreign investor’s investments into share of companies. Generally, these investments are done by NRIs/PIOs through share market (NSE, BSE). NRIs/PIOs have been provided a special window under Portfolio Investment Scheme (‘PIS’) of FEMA Regulations. Sometime, Investment in shares of companies are also done directly i.e. by direct allotment from the company under Foreign Direct Investment (FDI) Scheme. NRIs/PIOs are also allowed to invest into Mutual Funds. These investments, earn a good return on their investment to NRIs/PIOs, and being very popular since last 8-10 years. Return come in two form i.e. Dividend and Capital Gains on Sale. Tax provisions deal with both kind of income differently. Salient features wrt income from Shares and Mutual Funds are as under:

Salient Features wrt Shares and Mutual Fund Income: