How is TDS deducted on my NRO Non-PIS Account?
When you trade through your NRO Non-PIS account, tax on your gains is deducted at source under Section 393 (2) of Income Tax Act, 2025 before the funds are credited to you. This upfront deduction is known as TDS (Tax Deducted at Source).
Kotak Neo applies TDS on two broad categories of income earned through your NRO Non-PIS account:
1. Capital Gains from Equity Delivery Trades
When you buy and sell shares for delivery, the profit is treated as a capital gain. The tax rate applied depends on how long you held the shares before selling:
Short-Term Capital Gains (STCG) | Held for 12 months or less | 20% | 15% of Tax Rate | 4% of (Tax Rate + Surcharge) | 23.92% |
Long-Term Capital Gains (LTCG) | Held for more than 12 months | 12.5% | 15% of Tax Rate | 4% of (Tax Rate + Surcharge) | 14.95% |
2. Business Income from Equity Derivatives (F&O)
Profits from trading in Futures & Options are treated as non-speculative business income.
Kotak Neo calculates your net gains at the end of each trading day, and if the day results in a realized profit, TDS is deducted at a flat rate of 39% (highest applicable slab rate) before the amount reflects in your ledger account.