Spoilt for choice: Trading in international markets

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Earlier, a bulk of investments available to individual investors consisted of Indian stocks, bonds and bank term deposits. (AP) Earlier, a bulk of investments available to individual investors consisted of Indian stocks, bonds and bank term deposits. (AP)
SummaryThere could be several reasons for a person deferring his current consumption.

can trade directly with the foreign broker.

Unlike the Indian market, where shares bought are transferred into one's demat account within three days (T+2), in foreign markets, they will be with the trader's pool account and the same will be reflect on the clients trading account immediately after buying. However, margin trading and short selling will not be allowed with a foreign broking house.

Both the dividend earned and capital gains are subject to tax laws of the respective laws of land. But it is adjusted against the tax liability in India if there is a treaty between the two countries. As overseas investments are made in foreign currency, the gain/loss will be subject to the movement of the home and investing currencies.

* The writer is associate professor in finance and accounting,

IIM Shillong

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