I am an Indian resident, and had some ESOPs which I had exercised and paid in January 2004. These were paid in USD and money on sale will also come in USD, the company went public in October 2006. What is the capital gains tax rate that will apply to me on sale of shares (listed on NYSE), if I sell after October 2007 or before October 2007? Virender Puri

Shares whether quoted or unquoted become long term asset after being held for more than one year. You exercised your option in January 2004, therefore after January 2005, shares became long term asset in your hand. Its sale will give rise to long term gains.

Since you are resident and the shares are listed outside India , the tax rate applied in this case will be 20% as per section 112 of the I T Act . The NIL tax rate for long term gains is for shares which are sold through stock exchanges registered in India.However, you can claim indexation on the cost of the share. For more on indexation , read here.

For computation of capital gains, you will have to convert the foreign exchange in Indian currency . The Rule 115A of the Income Tax Rule prescribes as under:

So, when you sale the foreign listed shares,take following steps:

1. Convert purchase and sale price in Rupees by taking the TT rate of SBI (Ask any SBI official ).
2. Compute indexed cost.
3. Reduce Indexed cost from Sale price
4. Compute tax @20 % of (3)