Demat account compliance where persons resident status changes frequently

@TAXIQ.IN So NRI trading rules and requirements are clearly stated (Pis account, NRE/NRO bank account so on)

But consider this situation:

A person resident in India having normal Demat account, now his resident status changes either due to because he is stuck abroad or is travelling multiple countries as a tourist by hopping on the longest possible tourist visas available.

  • In either of the situation, when a persons status becomes NRI (>181 days) then can he still continue trading using his normal demat account?

  • What compliance are required by the account holder? Can he still use his account while abroad?

Note that his NRI status is intermittent and changes when he travels for long durations

@Quicko any advise?

@AkshayAtur Do you have idea about this?

Hi @trader29,

Resident to NRE / NRO Status

You will be allowed to convert your existing account into an NRI -NRO
Conversion of individual resident account to an NRI-NRE account is not possible.

Check this link

NRE / NRO to Resident

This is also possible, check this link


The Residential Status of the taxpayer as per Income Tax Act is determined for each financial year based on your stay in India. If you are a Non-Resident for a financial year, the income that you earn in India is taxable. However, if you are a Resident for a financial year, the global income is taxable i.e. income earned in India and earned outside India.

Check out our tool to Determine Residential Status

If you hold the status of a Resident, you must report your global income in the Income Tax Return. However, if you have paid tax in the foreign country, you can claim relief of the same in your Income Tax Return if both India and the foreign country have entered into a DTAA i.e. Double Tax Avoidance Agreement. Following is the taxability of your trading income:

Equity Delivery Trading-

  • Considered as Capital Gains Income
  • File Form ITR-2
  • Short Term Capital Gains (STCG) - taxed at 15%
  • Long Term Capital Gains (LTCG) - taxed at 10% in excess of Rs. 1 lac

Equity Intraday Trading, Equity F&O Trading, Commodity Trading, Currency Trading-

  • Considered as Business Income
  • File Form ITR-3
  • Taxable at income tax slab rates

@ShubhS9 could help with which DMAT account to be used for trading when the status changes to NRI and compliances related to the same.

Incase of any Tax related Queries feel free to reach out to us :slight_smile: