Thread by @ValueWithPrem

You will pay LTCG on your stock profits. But some elites or NRIs legally pay 0% thanks to a 40 year old law most Indians have never heard of.

2. This isn’t some shady loophole.
It’s Section 115F and of the Income Tax Act.

• If an NRI invests foreign currency in Indian stocks or mutual funds,
• Sells at a profit,
• And reinvests the proceeds into new Indian securities within 6 months then no LTCG tax.

3. Why does this law even exist?
Back in 1983, India was desperate for forex inflows.

So govt said: NRIs, bring your dollars churn your portfolio tax free if you reinvest.

40+ years later, this provision still survives.

4. Example to make you gasp

NRI invests $100k (₹83L).
Sells at ₹1.2 cr (₹37L profit).
Reinvests in new securities within 6 months.

LTCG Tax = 0.
Resident would have paid around ₹4 Lakhs

5. Here’s the real kicker in 2025:
Indians can legally become a “deemed Resident” by:
• Staying abroad for 182+ days
• Investing via NRE/NRO account in foreign currency
• Bring Foreign Currency Into India
• Filing under Chapter XII-A

Now you qualify for the same 0% regime.

6. So yes Indians with flexible work, remote jobs, or global business setups can flip their tax status.
Instead of paying 10 to 20% LTCG or STCG Deemed Resident unlocks the same 0% reinvestment route that rich NRIs use.

7. That means:
Resident trader: 1 cr gains: ₹10 to 20L tax.
Deemed NRI with 115E: 1 cr gains reinvested: ₹0 tax.

8. And guess what?
The 2025 Budget tightened slabs for NRIs. But this 115E reinvestment hack still stands untouched.

Barely anyone knows. Even most CAs won’t tell you.

9. The rules:
• Must invest foreign currency, not INR.
• 6 month strict reinvestment window.
• Applies to Indian shares, mutual funds, deposits.
• FEMA/RBI compliance mandatory.

10. Why your CA won’t tell you:
• Too niche, buried in Chapter XII-A.
• Only serious investors with overseas ties usually ask.
• Few even know it survived the 2025 Budget intact.

11. This 1983 law was made to attract NRIs.

But in 2025, smart Indians can structure their life to unlock it too.

Imagine saving crores over decades while others pay the govt every churn.

12. This isn’t a loophole. It’s the law.

But it requires lifestyle planning:
🌍 Time abroad
🏦 Proper accounts
📑 Filing under NRI provisions

It’s also one of the smartest ways India has attracted foreign capital since 1983. 🇮🇳
By rewarding NRIs, the govt ensures forex inflows & stronger markets.
We fully support such policies that strengthen India’s economy while creating wealth for investors.

⚠️ Disclaimer:
This thread is for educational purposes only. It explains how existing sections of Indian tax law apply to NRIs. It is not financial, tax, or legal advice. Rules differ by individual case and can change with future budgets. Please consult a qualified CA / tax lawyer before acting on this.

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Do you think India should relook at STCG & LTCG rules to encourage long term investing?