What "arrival-day reset" actually means
Australia taxes its residents on worldwide capital gains. If that were the whole story, the day you became a resident you'd be exposed to Australian tax on every rupee of gain your Indian assets had ever made — including years when you had nothing to do with Australia. The deemed-acquisition rule stops that.
Under section 855-45 of Australia's tax law, when you become a resident your CGT assets are treated as if you acquired them on that day, at their market value on that day. The Australian capital gains clock starts then. Everything the asset gained before you arrived sits outside Australia's net; only the gain from arrival day onward is Australia's to tax when you eventually sell.
The rule doesn't apply to "taxable Australian property" — broadly, Australian real estate and similar interests — which stays inside Australia's net regardless. But your Indian shares, mutual funds and (normally) your Indian property are not taxable Australian property, so they get the reset. One exclusion your Australian accountant will check: if you're a temporary resident when this happens, these rules can apply differently, so confirm your status with them.
Why the arrival-day value is an India-side number
The reset is generous, but it's only as good as the value you can stand behind. Australia treats your Indian asset as acquired at its market value on arrival day — so that value becomes the cost base your future Australian gain is measured from. Set it too low and you hand Australia a gain that was never theirs; assert it with no support and the figure can be challenged years later, when records are cold.
The asset sits in India, priced in rupees, and the date that matters is a single day. Valuing an Indian flat, an unlisted shareholding, or a portfolio as on that exact date is work an Indian chartered accountant is placed to do — using the evidence India's own tax system recognises.
| Indian asset | How the arrival-day value is fixed |
|---|---|
| Listed shares / mutual funds | Quoted price / NAV on the arrival date |
| Unlisted shares | A reasoned valuation as on that date |
| Property | A dated market-value valuation of the property |
Fix each value once, contemporaneously, with documentation — don't reconstruct a guess at sale time. That documented value is the India-side deliverable your Australian accountant records against the asset.
What happens on the Indian side when you later sell
The arrival-day value governs the Australian gain. It doesn't touch the Indian gain, which India computes its own way — and India taxes first, because the asset is Indian.
When you sell, India looks at your original Indian cost (or, for older property, the 2001 fair-market-value step-up where it applies), not your Australian arrival-day value. Long-term gains are taxed under Section 112, and the buyer deducts tax at source under Section 195 on the proceeds. That Indian tax is real money paid in India on the same gain Australia will also look at.
So the same sale produces two different gains under two different rulebooks: a smaller Australian gain measured from arrival-day value, and an Indian gain measured from your original cost. The India-Australia tax treaty (Article 13) and Australia's foreign income tax offset stop you paying twice — your Australian accountant credits the Indian tax you actually paid against the Australian tax on that gain. To do that, they need a clean Indian computation and proof of the Indian tax paid.
A worked example: shares carried to Sydney
Anita moved to Sydney in 2026 and became an Australian tax resident. She has held a parcel of Indian listed shares since 2014, bought for about 8 lakh, worth about 30 lakh on the day she arrived.
A chartered accountant fixes the arrival-day value — the quoted market value of the parcel on her arrival date — and documents it. Her Australian accountant records 30 lakh as the Australian cost base. The 22 lakh of gain that built up from 2014 to arrival is now outside Australian CGT.
Two years later she sells for 36 lakh. In India, the gain runs from her real 2014 cost (about 8 lakh, so roughly a 28 lakh long-term gain), taxed under Section 112, with the buyer/broker mechanism and Section 195 applying to a non-resident seller. In Australia, the gain runs from the 30 lakh arrival-day value (about 6 lakh). Her Australian accountant taxes the 6 lakh, then applies the foreign income tax offset for the Indian tax paid on that sale, with the treaty behind it.
We supply the arrival-day valuation, the India capital-gains computation, and an India-tax-paid certificate. Her Australian accountant files the Australian return and works the FITO under Australian rules.