# Booked P&L: Loss in Indian Stock Market | Gain in U.S Stock Market - Do I have to pay tax?

Hello,

I want to know whether I have to pay any short-term capital gain tax or not. Below is my scenario.

This is only my sold stocks ‘Booked P&L’ since April 2020

=== My Indian Stocks P&L: ====

Net realized P&L = minus -9.82k (Including tax and brokerage)

=== My US Stocks P&L: ====

Amount transferred from bank to brokerage account = \$2200 (Rupees 170,778)
Exchange rate:- 1 USD = 77.xx Rupees + Rs 1000 charged by HDFC Bank

Current value
US Portfolio = \$2423
Cash from trading = \$39.37 (Current exchange rate is only \$74 and the bank will only give \$73. There will also be \$10 for the bank transfer charge)
Dividends (after-tax detected by the U.S Gov) = \$2.59

How the short-term capital gain tax is calculated in this scenario?

Also, up to how many dollars can I gain in the U.S stock market till being tax-free?

@Quicko can you.

Hey @Mani_Kan_Dan ,

Capital Gain can be calculated on the sale of foreign stocks in the following manner:

Period of Holding - Time duration you have held your shares for
Sell Value - Amount you sell your security for
Transfer Expenses - Expenses incurred on sale of foreign stocks
Capital Gain = Sell Value - Buy Value - Transfer Expenses

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But what if I have made a profit in selling the stock but I’m actually in a loss in USD/Rupee conversion value?

Are brokerage fees, bank transfer charges, and trading GST/tax considered as a loss and be adjusted in the profit?

Hey,

Yes. brokerage fees, bank transfer charges, and GST charges can be claimed as expenses and adjusted against the profit.

If you have made profits by selling stocks but are actually in a loss due to the conversion rate, you must report the loss in the ITR. However, you must apply the TT rates as per Section 115 of the Income Tax Act to convert the foreign currency into INR.

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Perhaps someone reading could help clear a silly doubt on my mind.

I paid around Rs 4000 in fees for transferring to foreign broker.
Quicko said that:
Capital gain = Selling price - cost price - any expenses

My question is I’m holding my stocks for now - so for the current financial year ending march 31 2021, I will have sold nothing from my account.

Suppose next year (i.e the next financial year) I decide to sell some. Can I subtract the expenses then? Should I declare these expenses as loss or something, or any deduction for the current f.year?

This is the 115 Section - https://www.incometaxindia.gov.in/Rules/Income-Tax%20Rules/103120000000007546.htm

[Rate of exchange for conversion into rupees of income expressed in foreign currency.

1. [(1)] The rate of exchange for the calculation of the value in rupees of any income accruing or arising or deemed to accrue or arise to the assessee in foreign currency or received or deemed to be received by him or on his behalf in foreign currency shall be the telegraphic transfer buying rate of such currency as on the specified date.

Explanation : For the purposes of this rule,—

(1) “telegraphic transfer buying rate” shall have the same meaning as in the Explanation to rule 26;
(2) “specified date” means—
(a) in respect of income chargeable under the head “Salaries”, the last day of the month immediately preceding the month in which the salary is due, or is paid in advance or in arrears;
(b) in respect of income [by way of] “interest on securities”, the last day of the month immediately preceding the month in which the income is due;
(c) in respect of income chargeable under the heads “Income from house property”, “Profits and gains of business or profession” [not being income referred to in clause (d)] and “Income from other sources” (not being income by way of dividends [and “Interest on securities”]), the last day of the previous year of the assessee;
(d) in respect of income chargeable under the head “Profits and gains of business or profession” in the case of a non-resident engaged in the business of operation of ships, the last day of the month immediately preceding the month in which such income is deemed to accrue or arise in India ;
(e) in respect of income by way of dividends, the last day of the month immediately preceding the month in which the dividend is declared, distributed or paid by the company;
(f) in respect of income chargeable under the head “Capital gains”, the last day of the month immediately preceding the month in which the capital asset is transferred :]

[Provided that the specified date, in respect of income referred to in sub-clauses (a) to (f) payable in foreign currency and from which tax has been deducted at source under rule 26, shall be [the date on which the tax was required to be deducted] under the provisions of the Chapter XVII-B.]

[(2) Nothing contained in sub-rule (1) shall apply in respect of income referred to in clause (c) of the Explanation to sub-rule (1) where such income is received in, or brought into India by the assessee or on his behalf before the specified date in accordance with the provisions of the Foreign Exchange Regulation Act, 1973 (46 of 1973).]

• 1). What does the telegraphic transfer buying rate mean? (when the dividend and capital gain are with the U.S brokerage)

• 2). Can you explain the phrase “the last day of the month immediately preceding the month”?

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@Mani_Kan_Dan

• 1). What does the telegraphic transfer buying rate mean? (when the dividend and capital gain are with the U.S brokerage)

TTBR is the rate at which an individual needs to convert the foreign income into INR.

• 2). Can you explain the phrase “the last day of the month immediately preceding the month”?

Assume you have earned Dividend on 14st Aug 2020 - USD 3. You need to convert the USD 3 by TTBR(Exchange Rate) prevailing on 31st July 2020.

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Now where to find the TTBR rate for 31st July 2020?

@Mani_Kan_Dan

It is suggested to consider SBI TTBR rate. Please check their official website.

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