There is no TDS (Tax Deduction at Source) for your stock market capital gains in the U.S. So when you send money back to your Indian bank account, the broker in the U.S. does not deduct any tax on it.
However, you will be required to pay Short-term Capital Gains Tax OR Long-term Capital Gains Tax in India, whichever is applicable.
Short-term Capital Gains apply if the security is held for less than 24 months and will be taxed as per Indian income tax slab rates applicable to the investor.
When the stock is held for more than 24 months, then the gains on the sale of the stock are Long-term Capital Gains and will be taxed at 20% + applicable surcharge and fees.
A 25% TDS applies only to your dividend earnings. Your dividend earnings received as cash or reinvested will also be taxed in India at the applicable income tax slabs by adding it to your current income. However, India and the U.S. have a Double Taxation Avoidance Agreement (DTAA). This means that you pay dividend tax only once. For the TDS paid on your dividend earnings, you will get the 1042-S form via reports on our platform. You can use it while filing your taxes in India to show that you have already paid taxes on this income. You will be able to offset the tax withheld in the US and adjust it with the tax liability in India.
