Neutral impactEconomy
Made profits on Apple or Nvidia shares? Here's whether you can claim the ₹1.25 lakh tax exemption in India
Mint 1 hr ago·17 Oct 2026, 10:44 am
The ₹1.25 lakh annual exemption on long-term capital gains (LTCG) is a key benefit for Indian investors. This tax break applies to gains from domestic equity shares and equity-oriented mutual funds held for more than one year. However, the exemption does not extend to investments in foreign stocks, such as Apple or Nvidia, held through Indian brokers. Gains from these international assets are taxed separately under the head 'Capital Gains' at a flat rate of 20% with indexation benefits, regardless of the total profit amount.
This distinction is crucial for investors with a global portfolio. The tax rules for foreign equities are governed by the Foreign Exchange Management Act (FEMA), meaning the ₹1.25 lakh exemption is not available for them. To avoid a surprise, investors must track the tax liability on these international holdings separately from their domestic equity investments. The tax is calculated on the net gain after accounting for the cost of acquisition and inflation, which can significantly reduce the taxable amount.
Moving forward, investors should be aware of the tax implications before buying or selling foreign stocks. The 20% tax rate applies to the net gain, not the total value of the shares. It is advisable to maintain clear records of purchase prices and any dividends received from these foreign companies. Understanding these rules helps in better financial planning and ensures compliance with Indian tax regulations for non-resident Indians and resident Indians holding foreign assets.
Excerpt from Mint
The ₹ 1.25 lakh annual LTCG exemption applies to Indian equity investments, but does it also apply to foreign stocks held by an Indian investor? Check details here. Finance Minister Nirmala Sitharaman recently indicated that the government will hear investors' views on long-term capital gains (LTCG) tax during…Read the original at Mint
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