As India’s investment landscape becomes increasingly attractive for overseas investors, more NRIs are allocating capital to equities, mutual funds, bonds and real estate.
However, each asset class comes with its own tax implications, and recent changes to capital gains rules and mutual fund taxation have made tax planning more important than ever.
From understanding residential status and leveraging Double Taxation Avoidance Agreements (DTAAs) to navigating TDS provisions and property transactions, investors need to be aware of the rules that can significantly impact their post-tax returns.
In this edition of ETMarkets Smart Talk, Ritu Shaktawat, Partner, Khaitan & Co., breaks down the tax treatment of various investment avenues and shares practical insights to help NRIs invest in India with greater confidence while staying compliant with evolving regulations. Edited Excerpts –
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Q) What are the key tax considerations NRIs should keep in mind before investing in India?
A) Before investing in India, NRIs should undertake a holistic review of the applicable tax and regulatory framework, including the following key considerations, to optimise their post-tax returns and ensure compliance with Indian laws.
1. Determining their residential status: Tax residential status of individuals is categorised into three categories: Non-resident (“NR”), Resident but not ordinarily resident (“RNOR”), and ordinarily resident (“ROR”) and it depends on physical presence in India on a year-on-year basis. The distinction is important as scope of income taxable in India differs for each category. Accordingly, NRIs investing in India or holding any India assets are advised to determine their residential status including for the years in which they expect returns from their India assets, as it forms the foundation for evaluating the taxability of their income and the overall tax implications of their investments in India.
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2. Evaluating the applicable Double Taxation Avoidance Agreements (“DTAA”): NRIs who are non-residents of India for tax purposes should review the applicable DTAAs, between India and their country of residence. The applicable DTAA may provide beneficial tax treatment for certain income streams earned from India such as interest, dividends, capital gains, subject to meeting the prescribed eligibility and documentation requirements.
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3. Understanding the tax implications of the chosen asset class: The tax treatment varies significantly across investments such as equity shares, mutual funds, debt instruments, fixed deposits, and immovable property. Investors should evaluate the applicable tax rates, valuation norms, holding period requirements, exemptions and withholding tax implications before making an investment.4. Consider repatriation and FEMA (foreign exchange) requirements: Apart from tax considerations, NRIs should ensure that investments are made through the appropriate banking channels and in compliance with the applicable FEMA and RBI regulations to facilitate smooth repatriation of income and sale proceeds. 5. Maintain adequate documentation: Investors should preserve records relating to the acquisition date and cost, valuation reports (where applicable), tax paid or deducted at source (“TDS”), and DTAA related documentation, including a valid Tax Residency Certificate (“TRC”), to facilitate tax compliance and claim DTAA benefits, foreign tax credits, and minimise potential disputes with the tax authorities. 6. Review and meet tax compliance requirements: NRIs should assess their annual tax compliance obligations, including filing income-tax returns in India, reporting India-sourced income, claiming credit for TDS where applicable, withholding tax compliances (as may be applicable) and disclosing such income and taxes paid in India as well as in their country of residence, wherever required.
Q) Has the tax treatment of NRI investments changed significantly over the past few years? A) While the fundamental principles governing the taxation of NRI investments have largely remained unchanged, the past few years have witnessed several legislative amendments aimed at rationalising the tax regime, simplifying compliance and addressing practical challenges faced by investors. Some of the key developments are as follows:
1. Changes to capital gains taxation: The Finance (No. 2) Act, 2024 rationalized the capital gains tax regime by revising tax rates and holding periods across various asset classes. The taxation of listed securities, mutual funds and immovable property has undergone significant changes, requiring NRIs to reassess the post-tax returns on their investments.
2. Taxation of debt and hybrid mutual funds: The tax regime for debt-oriented and certain hybrid mutual funds has been substantially modified, with specified mutual funds acquired on or after 1 April 2023, no longer enjoy the traditional long-term capital gains benefits.
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Q) How can NRIs avoid common tax mistakes while investing in Indian financial assets? A) NRIs can avoid common tax mistakes while investing in Indian financial assets by adopting a proactive approach to tax and regulatory compliance and investment monitoring. Some practical considerations include:
1. Don’t treat TDS as the final tax: TDS is only a collection mechanism and may not represent the final tax liability of the taxpayer. NRIs should assess whether in the tax returns to be filed in India any refund of taxes withheld should be claimed, any additional income should be reported, any DTAA benefits should be claimed etc.
2. DTAA benefits: Where eligible, NRIs should furnish the prescribed documentation, including a valid TRC and Form 41 (erstwhile Form 10F), before the payment is due to ensure correct treaty withholding rate is applied and avoid unnecessary refund claims.
3. Plan the timing of exits: The timing of a transfer or redemption can significantly influence the tax liability, particularly where the applicable tax rate depends on the period of holding of the asset.
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4. Mode of investment: Prior to investments in India, various investment modes should be evaluated in detail including tax costs of holding and disposing the investment.]
Q) How do Double Taxation Avoidance Agreements (DTAAs) help NRIs, and how should investors make the most of them? A) DTAAs entered by India aim to eliminate double taxation of the same income through mechanisms such as foreign tax credit or exemptions. DTAAs also provide concessional withholding rates on certain income streams such as interest, rent, capital gains, dividends, and royalties. NRIs can rely on DTAA benefits for their India sourced income during the years they are non-residents of India.
To make the most of DTAAs, NRIs should evaluate the applicable DTAAs before structuring their investments, not only at the time of receiving income or making an exit. The tax treatment of dividends, capital gains on equity shares, mutual funds, and other income can differ significantly across different DTAAs which may materially affect the post tax returns.
To claim DTAA benefits, investors must obtain a TRC issued by the jurisdiction of tax residence, quote PAN, electronically file Form 41 relating to residency. If the applicable DTAA has any specific condition those should also be fulfilled.
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Q) How are short-term and long-term capital gains taxed for NRIs investing in Indian equities and mutual funds? A) As per the domestic tax laws, capital gains arising on the transfer of Indian securities are taxable in India, at the applicable tax rates depending on the nature of the asset and the period of holding as provided below:
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Q) How are equity, debt, and hybrid mutual funds taxed for NRIs? A) For an equity oriented mutual fund (i.e., funds having more than 65% of their investments in equity shares of domestic companies), see comments above.
For Specified mutual funds (i.e funds having more than 65% of their investments in debt and money market instruments) acquired after 1 April 2023, any gains arising on transfer, redemption or maturity are deemed be short term capital gains and are taxable in the hands of the investors as per the applicable slab rate.
For hybrid mutual funds, the taxation depends on the composition of their underlying portfolio, particularly the proportion of investments in equity and debt.
Hybrid funds with > 65% equity are treated as equity-oriented mutual funds whereas funds with less than 65% of equity exposure are treated as specified mutual funds and taxed accordingly.
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NRIs residing in jursidictions such as (Oman, Qatar, Singapore etc.), may be eligible to claim DTAA benefits on capital gains arising from transfer or redemption of mutual fund units as such gains may fall within the residuary clause of “Capital Gains” article, which allocates taxing rights exclusively to the country of residence of the taxpayer.
Since these jurisdictions generally do not levy capital gains tax, such gains may effectively remain tax free, subject to satisfaction of the applicable treaty conditions.]
Q) How are interest income and capital gains from bonds taxed for NRIs? A) Interest income: Interest earned by NRIs on bonds is generally taxable in India and is ordinarily subject TDS. The applicable TDS rate may vary from 10% to applicable slab rates depending on the nature of the bond, and would be subject to the applicable Double Taxation Avoidance Agreement (DTAA) benefits where eligible.
Capital gains: The tax treatment on transfer or redemption of bonds varies depending on the nature of the bond. Capital gains arising on the redemption of Sovereign Gold Bonds (“SGBs”) on maturity (i.e., after the 8-year tenure) are exempt from tax. Additionally, any transfer of tax-free bonds issued by the Government are exempt from capital gains tax.]
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Q) What are the tax implications of buying and selling property in India as an NRI? A) On Purchase of property in India by an NRI
Where an NRI purchases an immovable property in India from a resident seller, the NRI is required to deduct TDS at 1% of the sale consideration, provided the sale consideration or stamp duty value, whichever is higher exceeds INR 50 lakh.
Where an NRI purchases an immovable property from a non-resident seller, the buyer will be required to deduct the tax payable by the seller at source and should obtain necessary declarations from the seller in this regard.
On sale of property in India by an NRI
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The tax implications for an NRI selling a property in India depends on whether the asset is classified as a short-term capital asset or a long-term capital asset. Any property sold within 24 months of acquisition is treated as a short-term capital asset and the gains are taxable as short term capital gains at the applicable slab rates.
For long-term capital gains, the applicable tax rates depend on the date of acquisition
• If acquired prior to 23 July 2024: Effective tax rate of 23.92% (including surcharge and cess) with indexation or an effective tax rate of 14.95% (including surcharge and cess) without indexation, whichever is more beneficial • If acquired post 23 July 2024: Effective tax rate of 14.95% (including surcharge and cess) without indexation.
Immovable property transactions are subject to minimum valuation requirements which should be complied with to avoid taxes payable by the buyer and seller on a deeming basis.
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(Disclaimer: Recommendations, suggestions, views, and opinions given by experts are their own. These do not represent the views of the Economic Times)
More than 600 senior investors from around 350 firms, including Goldman Sachs, Blackstone and the Qatar Investment Authority, will descend on Hampshire this month for a new Finance Summit at the Farnborough International Airshow, and for once the guest list is not reserved for the primes.
The Aerospace Global Forum: Finance Summit, launching at this year’s show, is designed to connect global capital with opportunities across aerospace, defence, space, cyber and enabling technologies, from the industry’s biggest names down to emerging start-ups.
For UK founders and scale-ups in the sector, that matters. The programme puts sovereign wealth funds, private equity houses, venture capital firms, hedge funds and M&A specialists in the same halls as the businesses hunting for growth capital, at a show where the 2024 edition generated at least £13 billion in deals for the UK.
Senior representatives are expected from Goldman Sachs, J.P. Morgan, Citigroup, Barclays, HSBC, Deutsche Bank, UBS, Blackstone, Carlyle, Warburg Pincus, Mubadala, the Qatar Investment Authority, Temasek International and Tikehau Capital, among others.
British institutions are on the list too, including the British Business Bank, the London Stock Exchange and UK Export Finance, the government’s export credit agency, a signal that the summit is as much about backing domestic suppliers as courting overseas money.
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Gareth Rogers, CEO of Farnborough International, said: “Finance and investment have always been underlying themes of the airshow, but we wanted to give it emphasis to support the industry as it accelerates. The launch of the Finance Summit is our response to the growing demand from investors seeking direct access to high-quality market insight, business development opportunities and emerging innovation across aerospace, defence and space.”
The timing is hard to fault. UK aerospace, defence, security and space industries contribute more than £42 billion a year to the economy, according to ADS Group figures, and ministers have been working to pull smaller defence suppliers deeper into the MoD’s supply chain through a dedicated growth unit. Capital, in short, is looking for a home in exactly the sectors where British SMEs are strongest.
Attendees have identified the conference programme, market trends, new business partnerships, existing partner engagement and visibility of new projects as their key reasons for coming, according to the organisers.
The summit will run keynote sessions, panel discussions, roundtables and dedicated networking as part of the wider Aerospace Global Forum, with the stated aim of connecting investors, banks and consultancies with organisations ranging from global primes to emerging start-ups.
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For a smaller business, the calculation is straightforward. Investor meetings of this calibre usually mean a trip to Mayfair or Manhattan and a warm introduction. For one week this summer, the capital comes to Farnborough instead, at what organisers expect to be the biggest show in the event’s history.
Amy Ingham
Amy is a newly qualified journalist specialising in business journalism at Business Matters with responsibility for news content for what is now the UK’s largest print and online source of current business news.
I have a strong inclination towards high-growth companies, often treading in sectors poised for exponential expansion. My expertise lies in understanding and investing in disruptive technologies and forward-thinking enterprises. My approach is a mix of fundamental analysis and future trend prediction. I believe in the power of innovation to yield substantial returns and aim to provide insightful analysis on such companies here on SeekingAlpha.
Analyst’s Disclosure: I/we have no stock, option or similar derivative position in any of the companies mentioned, and no plans to initiate any such positions within the next 72 hours. I wrote this article myself, and it expresses my own opinions. I am not receiving compensation for it (other than from Seeking Alpha). I have no business relationship with any company whose stock is mentioned in this article.
Seeking Alpha’s Disclosure: Past performance is no guarantee of future results. No recommendation or advice is being given as to whether any investment is suitable for a particular investor. Any views or opinions expressed above may not reflect those of Seeking Alpha as a whole. Seeking Alpha is not a licensed securities dealer, broker or US investment adviser or investment bank. Our analysts are third party authors that include both professional investors and individual investors who may not be licensed or certified by any institute or regulatory body.
The former Yeovil cattle market site has been assessed for potential housing development
Daniel Mumby and Local Democracy Reporter
08:10, 15 Jul 2026Updated 08:16, 15 Jul 2026
The former cattle market site, seen from Court Ash in Yeovil(Image: Local Democracy Reporting Service / Daniel Mumby)
A former cattle market in Yeovil town centre could be converted into as many as 100 new homes if the site progresses under the new Somerset Local Plan.
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Somerset Council has recently begun the first phase of public consultation on its new Somerset Local Plan, which will determine where new housing and employment sites are designated until 2045.
As part of the Local Plan procedure, the council has published the results of its housing and employment land availability assessment (HELAA), which identifies every site submitted during the ‘call for sites’ in early 2025 (which invited developers, promoters and landowners to put forward sites for future development).
Among the sites included within the HELAA is the former cattle market south of the A30 Reckleford and Market Street – with local councillors suggesting it could accommodate up to 100 new properties.
Councillors Mike Hewitson and Oliver Patrick, who represent the Coker division near Yeovil, highlighted the issue in their latest monthly newsletter to their constituents.
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They said: “Councils are required to have up to date Local Plans in order to. demonstrate how they are delivering central government housing targets for their area.
“The HELAA process sits as a first stage in the wider Local Plan site selection process. It does not allocate sites or grant them planning permission or planning status of any kind.”
The cattle market was designated as one of the principal regeneration locations within the Yeovil Refresh regeneration scheme, launched by South Somerset District Council and supported by £9.75m from the then-Conservative government’s future high streets fund.
After the current Labour government took office in July 2024, the programme was restructured to enable the remaining funds to be concentrated on the Glovers Walk site and several smaller projects in the town centre.
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The cattle market component of the Yeovil Refresh programme was formally scrapped in August 2024, alongside any proposed improvements to the Poundland outlet at 72-74 Middle Street.
Hewitson and Patrick added: “The owners of the cattle market have submitted their land for consideration in the Local Plan. They have indicated it could accommodate approximately 100 homes.
“Could we finally see this major brownfield site finally come forward for redevelopment?”
In their formal evaluation of the location, the council’s own planning officers said the cattle market was “potentially suitable” for inclusion within the Local Plan as a “regeneration site” (i.e. one where central government funding could be targeted to unlock new homes).
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The officers added: “The site has been promoted for housing development and therefore is not considered available for economic development.
“The site is adjacent to multiple highways, so it is assumed that access could be taken from multiple points.
“The promoter has identified a few common constraints but anticipates that they can be overcome.”
A summary of the consultation responses is due to be published in early November, with the second round of consultation, incorporating further details of proposed development sites, expected to commence in September 2027.
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The third and final round of public consultation is currently scheduled for March 2028, after which the Local Plan will be submitted to the Planning Inspectorate, which may hold additional public hearings should it be deemed necessary.
If everything proceeds, the new Local Plan will be formally adopted on March 16, 2029.
SAN FRANCISCO — Dozens of Meta employees have filed a federal lawsuit accusing the social media giant of using artificial intelligence systems to select workers for layoffs in a way that disproportionately targeted those who took maternity, medical or disability leave.
The 71-page complaint, filed Monday in U.S. District Court in the Northern District of California, was brought by 26 current and former employees who claim the company’s AI-driven performance evaluations penalized them for exercising legally protected rights to time off. The workers are among approximately 8,000 employees, or about 10% of Meta’s global workforce, notified of layoffs beginning in May.
Meta, the parent company of Facebook, Instagram and WhatsApp, has disputed the allegations. “These claims lack merit and are not based on facts,” a Meta spokesperson said in a statement. “Workforce management and organizational decisions were and are made by people, not AI.”
The lawsuit alleges that Meta relied on a “constellation of internal artificial intelligence systems” — including AI performance ratings, keystroke and activity monitoring, productivity metrics and AI token-usage dashboards — to score, rank and select employees for termination. These tools, according to the complaint, failed to account for periods when employees were on approved leave, effectively punishing them for absences required by law.
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“Meta did not assemble the termination list through the considered judgment of managers who knew the work,” the complaint states. “Instead, the company used AI systems to score, rank and select employees for inclusion on the list.”
Plaintiffs include a scientist notified of her layoff just days before giving birth while on approved pre-birth pregnancy leave, an engineer who received a lowered rating due to time off for an injury, and a manager let go 16 days into medical leave. All 26 plaintiffs, who are proceeding anonymously as Does 1-26, had taken protected leave in the 24 months prior to the layoffs, the suit says.
Eight of the plaintiffs are women who took maternity or pregnancy-related leave, four are men who took parental leave, and another took leave to care for a family member followed by bereavement leave, according to the filing. The suit claims the practices violate the Family and Medical Leave Act, the Americans with Disabilities Act, the Pregnancy Discrimination Act, the Pregnant Workers Fairness Act and various state laws.
The case highlights growing concerns about the use of AI in workplace decisions. Regulators and lawmakers in states including California, Colorado and Illinois have enacted rules in recent years to address potential bias in automated employment tools. The U.S. Equal Employment Opportunity Commission has also stated that existing anti-discrimination laws apply when employers use AI for such purposes.
The lawsuit points to Meta’s employee-monitoring program, introduced earlier this year, which captured keystrokes, mouse movements, browser history, messages, emails and location data on company devices. The program was intended to train the company’s AI systems on employee behaviors, according to internal statements attributed to CEO Mark Zuckerberg.
In an internal meeting reported by The Information, Zuckerberg said the AI models would “learn from watching really smart people do things,” noting that the average intelligence at the company was higher than what could be obtained externally for certain tasks.
Plaintiffs allege the monitoring program was rolled out with limited notice and little opportunity for opt-out, contributing to an environment where data collection fed into layoff decisions without proper safeguards for protected leave.
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The suit seeks a preliminary injunction to halt the finalization of layoffs for the plaintiffs, along with reinstatement, back pay, lost equity, benefits and other damages. Because of Meta’s arbitration agreements, the plaintiffs are not seeking class-action status but are pursuing individual claims.
Legal experts following the case say it could test how courts view the intersection of AI tools and employment protections. If the metrics used in decision-making inherently disadvantage workers on leave, companies may need to implement more robust adjustments or human oversight to comply with federal and state laws.
The controversy unfolds amid broader tensions at Meta over its aggressive push into AI. Employees have expressed concerns about surveillance tools, reassignments to data-labeling roles described internally by some as “draftees” work, and the overall pace of change. Petitions and internal protests have highlighted worries that AI initiatives are coming at the expense of worker well-being.
Meta has defended its approach as necessary for remaining competitive in the rapidly evolving technology landscape. In communications to staff, executives have emphasized flattening organizational structures, increasing ownership on smaller teams and leveraging AI to boost productivity.
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The company has paused aspects of its monitoring program at times due to internal data concerns and employee feedback, but continues to integrate AI deeply into operations.
This latest lawsuit adds to a series of legal challenges facing big tech companies over AI deployment. As tools become more sophisticated, questions about transparency, bias detection and accountability are likely to intensify.
For the plaintiffs, the stakes are personal. One researcher reportedly received her first “Meets Most” performance rating shortly after disclosing a disability and requesting accommodations, according to details in the complaint. Others describe lowered scores directly tied to leave periods.
The case is assigned to U.S. District Judge William Orrick in Oakland. Plaintiffs are seeking preservation of relevant data, models and logs, as well as an independent audit of the algorithmic selection process.
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Meta’s spokesperson reiterated that decisions involved human judgment and that the company complies with all applicable employment laws.
As the tech industry grapples with balancing innovation and worker rights, the outcome of this suit could influence how other companies approach AI-assisted workforce management. With AI adoption accelerating, similar disputes may become more common.
The plaintiffs’ attorneys from firms specializing in employment law argue that failing to adjust for protected leave in automated systems amounts to built-in discrimination. They call for greater scrutiny of “black box” AI tools in high-stakes employment decisions.
Industry observers note that while AI can streamline processes, it requires careful calibration to avoid unintended biases, particularly around sensitive areas like health and family responsibilities.
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Meta, with a workforce of around 78,000 at the end of the first quarter, has conducted multiple rounds of layoffs in recent years as it pivots toward AI. Previous cuts in 2022 and 2023 were larger in scale, but the 2026 reductions come as the company invests heavily in computing infrastructure and model development.
Zuckerberg has publicly stated that AI will transform many aspects of work, including at Meta itself. The company’s internal AI efforts include tools like Metamate, described as a large language model assistant, and “second brain” systems trained on employee data.
Critics within the company have raised alarms about the potential for these systems to create feedback loops that favor constant availability and high-volume output, metrics difficult to maintain during legitimate absences.
The lawsuit does not seek class certification due to arbitration clauses but requests the court issue a preliminary ruling preserving the status quo for the named plaintiffs while their claims proceed.
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Broader implications could extend to other employers using similar technologies. Employment lawyers advise companies to audit AI tools for disparate impact on protected groups and to maintain clear documentation of human involvement in final decisions.
As of mid-2026, the debate over AI in human resources continues to evolve, with calls for federal guidelines gaining traction alongside state-level regulations.
The case underscores the challenges of integrating powerful new technologies into traditional employment frameworks. For Meta and its workforce, the resolution may help define the boundaries of acceptable AI use in one of the most consequential areas of business operations: deciding who stays and who goes.
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