Conditions and exemption from long-term capital gains on transfer of foreign exchange asset by a Non Resident Indian

1. Condition : Long-term capital gain on transfer of foreign exchange asset Is entitled for exemption If the whole or part of the net consideration is Invested within 6 months after the date of such transfer in prescribed assets.

2. Prescribed Assets:
(a) Shares of an Indian Company or debentures of an Indian Public Limited Company.
(b) Deposit with an Indian Public limited Company.
(c) Central Government securities.
(d) National Savings Certificates VI and VII issue.

3. Exemption: If the whole of the net consideration is invested, then entire capital gain is exempt.
If a part of the net consideration is invested, then the deduction shall be computed as follows:
Amount Exempted = Capital Gains × Amount Invested/Net consideration

4. Holding period of the asset: 3 years from the date of acquisition.

5. Sale/conversion within the holding period: Amount exempted shall be chargeable to tax as Long Term Capital Gain In the year of transfer.

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