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NRIs can purchase and sell shares or equities on BSE and NSE. However, the capital gain or profit on sell of shares is taxable at the following rates;
| Meaning | Capital Gain tax rate | |
|---|---|---|
| Short-term capital gain | Profit on sell of shares within the holding period of one year, is called short-term capital gain. | Effective from July 24, NRIs have to pay STCG tax at the rate of 20%, earlier it was 15%. |
| Long-term capital gain | When an NRI sell equities after the period of 1 year or 12 months, such profits is long-term capital gain | NRI has to pay 12.5% long-term capital gain tax (previously 10%). Likewise residents, long-term capital gain upto Rs 1,25,000 is tax-free or tax-exempted for NRIs. |