Posted on: 28-01-09 10:27:47
Guys,
How to open DEMAT account in India for online trading? [On name of NRI]
I want to compare online trading features of different banks and would like to know which one will be best suitable for NRI.
I am not filing tax return in India from last 7 years. If I'll have some income from online trading, do I need to file tax return in India?
Thanks
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Success is Never Ending and Failure is Never Final.
http://www.incometaxindia.gov.in/PAN/Overview.asp
You will be taxed on the gains in India, if it is short term. {If it is held for a longer period of an year or more then they will consider it as long term Capital Gains} They do not attract ANY taxes on the gains. ! The year there is from the 1st of April to the 31st of March of an year.
But there will be taxes to be paid on it on an yearly basis here in Canada. The year here is from 1st of January to the the 31st of December.
Most or all of the Indian Banks and the brokers are linked and will provide you with a DEMAT account upon opening an NRI or NRO account with them. You can link that account to the Demat account at any broker. Some have direct links and they will recommend the appropriate bank to choose.
But trading there in India and paying taxes at both ends is not a profitable situation. You have the choice not to. And if you are a Canadian Citizen, then delve a little deeper into double taxation prior to getting into it.
This is valuable information.
Freddie.
PAN Card Required !
Also, please note that without a PAN card, you will not be able to open a DEMAT Account. It is a mandatory SEBI rule and all banks are required to abide by this condition.
I would advise you to get in touch with and they will answer your queries to the T.
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When the going gets tough, the tough gets going!!!
I am canadian citizen and already applied OCI. I'll have OCI soon hopefully. OCI gives parity to NRI.
I have PAN card too.
If I'll gain something in India, Do I have to file tax return after end of the year in India? OR bank/broker will deduct tax from the gain itself? (Do you think I'll have to pay 30% flat tax because of NRI?)
Also, Can I report income to CRA and ask for tax credit which I'll pay in India?
I am new in this matter....
Thanks
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Success is Never Ending and Failure is Never Final.
Well one good thing about a "GOOD" broker that they manage everything for you in India. I am in same situation as you are ... Canadian Citizen having OCI and holding Indian equities. I have one broker in Mumbai and they do everything for me and charge me very nominal anual fees.
As far as reporting your gains in Canada for tax purpose ... well I am not very keen on doing that 
It is too much of paper work and hassle.. I would like to avoid it as long as I can.
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Dont help others because others have helped you,,,,help others because its the right thing to do!!!
http://www.indopia.in/
I agree to the last post. Too much hassle. And, unless you are one clever dude, I don't see you making a huge profit in the Indian market given today's reality.
If you make short term capital gains (buy and sell shares at a profit within 6 months) you will get a TDS deduction of 11% applied immediately after the sale and the remainder is your profit/share money. After a year, a good broker will post you a TDS statement.
As an NRI, you will have the option of opening 4 types of accounts (2 of which are wholly Repatriable and non-taxable but the shares you can invest in are limited to A and B group shares ) and (2 are Non-Repatriable and taxable but the shares you can invest in almost the entire spectrum)
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When the going gets tough, the tough gets going!!!
Quote:
Originally posted by meitsme
I am canadian citizen and already applied OCI. I'll have OCI soon hopefully. OCI gives parity to NRI.
I have PAN card too.
If I'll gain something in India, Do I have to file tax return after end of the year in India? OR bank/broker will deduct tax from the gain itself? (Do you think I'll have to pay 30% flat tax because of NRI?)
Also, Can I report income to CRA and ask for tax credit which I'll pay in India?
I am new in this matter....
Thanks
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If you do not reside/ or reside in India as an NRI for more than 182 days, then they will not with hold any taxes on the Long Term Capital Gains. because of the class it is in.
Regardless of the above fact, as a Canadian Citizen, you pay taxes on all of your income from world sources based on the capital gains.
There is a Dual Taxation Avoidance Agreement between India and Canada, which will only tax you in one of the continents. So it is worth exploring the same through some of the tax experts there.
This LTCG is the sticky part, though you might be Scot free there, you are getting hammered here in Canada and hence the request that you see a tax expert and clarify the same.
As regards the tax return, if the Brok(er)ing Agent with holds taxes on the gains, you being an NRI, if you want to collect the same, you can do so as there will be a certain exemption provided to you in the tax system there. So, you do get a small basic portion through the exemption. The excess which gets taxed there could be claimed here in Canada through the DTAA.
If an item gets taxed there, then I am sure it will fall in a taxed category and I will find out more on it at a later date and post it under this, how they treat it, to this thread for you.
It is my opinion that you should take it to the 'return to India' thread if you can locate it and add this to it.
Also if and when you sever your ties with Canada totally, and obtain a proper clearance from the Canadian Government and its Taxation Department, you will only have to take care of one tax return after that. (In India, in your case)
If you trade frequently and make capital gains there, you pay taxes in India and can claim exemption here in Canada for the gains. If you pay 30% tax on the gains, you can alleviate the same through tax filing and it will be decided at what bracket or level you will be falling after calculations. You will get a refund or will have to pay additional after the calculations. A tax accountant or an auditor will be the best person to provide you with the ceilings.
Freddie.
