Nigeria NRIs · Capital Gains Tax

Capital gains tax on Indian shares and mutual funds for NRIs in Nigeria

Selling Indian equity or mutual funds from Nigeria triggers Indian capital-gains tax, with no treaty to shift it. Your refund comes from the exemption and a correct cost basis.

If you hold Indian listed shares or mutual funds from Nigeria, India taxes the gains and there is no argument to be had about it. India and Nigeria never signed a tax treaty, so there is no treaty rate to bring anything down to. The gap matters more here than on property, because a few of India's treaties do give the country you live in the sole right to tax gains on Indian securities, and that is the one place a treaty genuinely beats the Indian rate. Nigerian Indians don't have that door, so plan on Indian tax: 12.5% long-term above the ₹1.25 lakh annual exemption and 20% short-term (Sections 198 and 196, formerly 112A and 111A). What you can still recover is the AMC's over-withholding, which usually runs ahead of the real number.

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India-Nigeria key facts: capital gains tax

India's default non-resident rate of 12.5% applies here with nothing to claim it down to.

Your ₹1.25 lakh exemption is the lever. A residence certificate from the Nigeria Revenue Service (NRS, formerly FIRS) is worth having for the Nigeria side, where your own domestic relief rules are the only thing that can soften the Indian tax.

This is India's domestic withholding under Section 393(2) (Section 195 until 31 March 2026). There is no India-Nigeria treaty to modify it. Surcharge and cess apply on top where relevant.

How it works on the India side

Indian capital-gains tax on equity and equity mutual funds follows Sections 198 and 196 (Sections 112A and 111A under the 1961 Act): long-term gains, held over a year, are taxed at 12.5% above a ₹1.25 lakh annual exemption, and short-term gains at 20%, after the Budget 2024 changes. For an NRI, the AMC or broker deducts TDS on the gain at redemption, and because they apply a flat rate without your annual exemption or the full holding-period detail, the deduction is frequently more than your real liability.

The correction happens on your return. You compute the gain properly across all your folios and brokers, apply the exemption and the right rate per holding period, and set the TDS already deducted against it. Where the TDS exceeded the actual tax, which is common once the exemption is applied, the excess is refunded. Two things catch people out: getting the cost basis right across multiple brokers, and the rule that a non-resident cannot set an unused basic exemption limit against these gains the way a resident can.

What changes because you live in Nigeria

Nigeria taxes your Indian income and gains too, and on some of it a remittance rule cancels the Nigerian tax. Section 12 of the Nigeria Tax Act 2025, in force since 1 January 2026, makes a resident's income and gains chargeable wherever they arise, even if the cash never leaves your NRO account. The relief runs backwards: section 163 exempts foreign dividend, interest, rent and royalty, but only if you bring it into Nigeria through approved channels. Leave it parked in India and the exemption goes, and section 120 then credits the Indian tax you paid, capped at the Nigerian tax on it. That remittance route never covers gains, so an Indian flat or share sale is chargeable under section 34 wherever the asset sits, and the N150 million threshold only shelters shares in a Nigerian company. Section 51 exempts one dwelling-house once in your life, and a flat you rent out rarely qualifies.

Frequently asked questions

Common questions from Nigerian Indians

12.5% on long-term gains above the ₹1.25 lakh annual exemption and 20% on short-term gains (Sections 198 and 196, formerly 112A and 111A). With no India-Nigeria treaty there is no lower rate and no residence-country carve-out for Nigerian Indians to claim, so the Indian rate is the rate. The ₹1.25 lakh exemption is still yours, and it's often where the refund comes from.

AMCs and brokers withhold on the gain at a flat rate without applying your ₹1.25 lakh long-term exemption or the precise holding-period split, so the TDS often runs ahead of your real liability. When you file your Indian return you compute the gain correctly across every folio, apply the exemption and the 12.5% long-term rate, set the TDS against it, and the excess is refunded. It's the same fix whether or not Nigeria has a treaty with India.

Go further

Read the full guide, or see your country's complete picture

NRI capital-gains ITR across multiple brokers Nigeria NRI tax guide: every income type and the rates that apply

Capital Gains Tax sorted, by an Indian CA who works with Nigerian Indians

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