How is taxation done for trading through non-PIS NRO account for NRIs work?

General
1

I am an NRI investor. Recently I received notification from Axis NRO PIS account that it can, from now on, be designated as a normal NRO account as the process of going through PIS is no longer necessary for NRIs and is revoked henceforth.

While this is very good news, one aspect which is not clear either from RBI circular or Axis Bank notification is the manner in which the taxes arising from every transaction (buy/sell or sell/buy) is dealt with.

I have looked up your website with great interest. While there was lot of explanation on the new concept of trading, your explanation does not cover the taxation aspect.

How is Zerodha currently dealing with this for it’s clients?

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2

After the latest RBI circular, you can map the non-repatriable NRO bank account to your trading account, brokers(including zerodha) will consider  it as a normal  trading and demat account. 

If we know the acquisition price, whenever sales happen, we will deduct 16.995% of short term capital gain and pay to the govt on your behalf. You will get TDS certificate for the amount. 

If we  don't have an acquisition price and you don't provide the proof, 16.995% of the entire sale value proceeds will be paid as taxes.  

3

So if it is a normal trading and demat account mapped with NRO account, brokerage will be as of resident indians?
And why is the difference in TDS? With NRE account, it is 15% whereas NRO it is 16.995%?
Could you please clarify

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4

And if we have bought shares using zerodha, will you have the acquisition price? Or do we need to maintain a proof/contract note for the same?

5

We will have the tax P&L with the acquisition price. You can also transfer in the stock and enter your buy price (maybe the only broker that allows you to do this)