NISM Certifications · NISM-Series-XXI-A: Portfolio Management Services (PMS) Distributors · Taxation (NISM XXI-A)
Which of the following is generally true for an NRI investing through a PMS in India?
The NRI's taxation depends on the nature of the income and residential status, and tax may be deducted at source where applicable. NRIs can invest through PMS, and Indian-sourced income is taxable for non-residents, subject to any treaty benefits.
- ANo tax is ever applicable on Indian securities gains of an NRI
- BTaxation depends on the nature of the income and the NRI's residential status, and tax may be deducted at source where applicableCorrect
- CNRIs are barred from PMS
- DOnly Indian residents pay tax on dividends
Explanation
Income arising in India is taxable for non-residents, with rates and withholding depending on the nature of income and any applicable treaty. NRIs are permitted to invest in PMS, so the other options are wrong.
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