How is PMS taxed for NRIs?
SBNRI Team
answered on 30/03/2020
Portfolio Management Services (PMS) can be understood as the management of funds of HNIs (High Net-Worth Individuals: A wealthy person, in particular one with investable assets in excess of $1 million) by various wealth management companies or Portfolio Managers (people responsible for handling your account) who invest these funds into a varied range of stocks, fixed incomes, debt, cash and other individual securities. These investments are aimed at meeting specific objectives and the minimum investment amount for PMS is Rs. 50 Lakhs. The portfolio consists of a lesser number of stock holdings that are bought on the philosophy of “Buy and Hold”. PMS offers a structured way of investing money and is a very effective medium for higher returns.
Also read: PMS for NRI: A Comprehensive Overview
PMS Taxation for NRI
The taxes applicable for NRI investors in PMS services are deducted at source (TDS) by the brokerage firm and net profits are paid. The portfolio Managers (people responsible for handling your account) help you with the filing of your taxes by providing the tax statements at the end of the year. They also keep the entire process of investments transparent and will not sell or invest anywhere without letting you know.
However, if the net profit/income in India for an NRI is below Rs. 2,50,000/-, a tax return can be filed to claim a refund of the taxes deducted as there are no taxes applicable for people in India with annual income of less than Rs. 2,50,000/-. Here is a table of tax slabs for your reference:
Income Tax Slab | Tax Rate |
| Up to 2.5 Lakhs | Nil |
2.5 Lakhs to 5 Lakhs | 5% |
| 5 Lakhs to 7.5 Lakhs | 10% |
7.5 Lakhs to 10 Lakhs | 15% |
| 10 Lakhs to 12.5 Lakhs | 20% |
12.5 Lakhs to 15 Lakhs | 25% |
| 15 Lakhs and above | 30% |
For more queries on “PMS Taxation for NRI”, click here.
To get expert advisory on Taxation on PMS at SBNRI, contact us using the button below.
Related Questions
SBNRI Team
answered on 16/11/2020
You can’t extend your PPF Account post maturity (15 years) if you become an NRI before your account matures. As per the PPF guidelines, NRIs aren’t eligible to open a PPF Account. However, if a Resident Indian becomes an NRI after opening the PPF Account, he/she can continue to subscribe to his/her account on […]
I am working in Mauritius! But my family is in India !! Is my wife eligible to open a ppf account !!
SBNRI Team
answered on 11/09/2020
Yes, if your wife is staying in India and she is a Resident Indian, she can definitely open a PPF account. You can too choose from a variety of investment options in India being an NRI. To get expert advisory at SBNRI, contact us using the button below.
SBNRI Team
answered on 22/03/2020
An NRI can invest into all forms of businesses and other investment opportunities in India. We have made a list of the top opportunities for NRIs and how can they invest in India: How can NRI Invest in India Opportunities Requirement Fixed Deposit Bank Accounts NRE/NRO/FCNR Account Mutual Funds NRE/NRO Account Direct Equity […]
SBNRI Team
answered on 09/02/2021
As per the FEMA Notification under the Reserve Bank of India, with respect to Power of Attorney for an NRI in India, it is stated that: Authorized dealers / banks may allow operations on an NRO account in terms of a Power of Attorney, provided such operations are restricted to:(i) all local payments in rupees […]
