NRI tax rules: What happens to losses on foreign shares?
I am an NRI living in the UK and left India in 2017 for employment. I regularly invest in the UK and India. Recently, I sold some UK and Indian stocks. I incurred a loss on the sale of UK stocks, whereas I earned gains on thesale of Indian stocks. Can I set off the UK capital loss against gains from Indian shares in my India tax return?
– Name withheld on request
Assuming you are a Non-Resident (NR) of India for FY 2026-27 under the Income-tax Act, 2025, only income which is received or deemed to be received in India, or accrues or arises or is deemed to accrue or arise in India, would generally form part of your total income in India.
Accordingly, a capital gain or capital loss arising from the sale of UK shares by an NR would not be taxable in India. Since such capital loss does not form part of your total income in India, the question of adjusting such loss against capital gains arising in India would not arise.
Therefore, such UK capital loss cannot be set off against capital gains arising from the sale of Indian shares while filing your Indian income-tax return.
I moved to Singapore in 2024 and became an NRI. Before moving there in 2024, I invested in US stocks under LRS, but did not report them in Schedule FA. I recently received an Income-tax Department email regarding the Foreign Assets of Small Taxpayer Disclosure Scheme 2026 (FAST-DS). Can I still file a declaration under FAST-DS as an NRI?
– Name withheld on request
The eligibility criteria under the Foreign Assets of Small Taxpayer Disclosure Scheme 2026 (FAST-DS) cover a person who is a Resident under the Income-tax Act, 2025, as well as a person who is a Non-Resident (NR) or Resident but Not Ordinarily Resident (RNOR) in the year of declaration, but was a Resident in the year in which the undisclosed foreign income was earned or the undisclosed foreign asset was acquired.
Accordingly, although you are currently an NR, you would be eligible to make a declaration under FAST-DS 2026 since you were a Resident when the US stocks were acquired.
Further, since the stocks were not reported in Schedule FA, a fixed fee of INR 1 lakh would be payable upon making the declaration under FAST-DS.
Harshal Bhuta is a partner at P. R. Bhuta & Co., Chartered Accountants
