Can I Invest Directly in the US Stock Market From India?

Yes. A resident Indian can legally buy US shares and ETFs directly under the Reserve Bank of India’s Liberalised Remittance Scheme (LRS), which allows up to US$250,000 per person per financial year. You can also get US exposure without sending money abroad, through Indian mutual funds and ETFs that invest overseas, though many of these are currently closed to fresh money.

This guide covers the LRS rules and the TCS charged on remittances, the five main routes (Indian apps, foreign brokers, GIFT City, GIFT City funds and Indian international funds), the real costs of moving money, and how US dividends, capital gains and holdings are taxed and reported in India. It includes a worked rupee example and a step-by-step checklist.

The legal framework: LRS

Under the LRS, every resident individual, including a minor, can remit up to US$250,000 per financial year (April to March) for permitted current or capital account purposes. Buying listed foreign shares, ETFs and mutual fund units is a permitted purpose, subject to the Overseas Investment Rules, 2022. Your PAN is mandatory for every LRS transfer.

The limit is per person, so a family of four can, in principle, remit up to US$1 million a year if each member has their own funds. A few things are not allowed under LRS, the most relevant being remittances for margin or margin calls to overseas exchanges or brokers. In practice this rules out leveraged trading and most derivatives. Income from your investments can stay invested abroad, but money that is received or unused and not reinvested must be brought back to India within 180 days.

TCS on LRS remittances

Your bank collects tax at source (TCS) on LRS remittances above a yearly threshold. Budget 2025 raised that threshold from ₹7 lakh to ₹10 lakh from 1 April 2025. Budget 2026 cut TCS on education, medical and overseas tour remittances to 2% from 1 April 2026, but left investment remittances unchanged (as of October 2026):

• No TCS on the first ₹10 lakh of LRS remittances in a financial year, counted across all banks and purposes.
• 20% TCS on the amount above ₹10 lakh, for investments in shares, ETFs and similar assets.

TCS is not an extra tax. It is an advance payment that shows up in your Form 26AS and can be set off against your income tax for the year, with any excess refunded when you file your return. It does, however, lock up cash for several months.

Five ways to invest in US stocks from India

1. International investing through an Indian app or broker

Several Indian platforms, such as INDmoney and Vested, let you open a US brokerage account from their app. The account is actually held with a US-registered partner broker, and your shares sit with that broker’s custodian. You complete KYC online, sign a US tax form called W-8BEN, and remit money through your bank under LRS. Fractional shares are usually available, so you can start with a small amount.

2. Opening an account with a foreign broker

Some global brokers, such as Interactive Brokers, accept Indian residents directly. This can give lower trading costs and access to many markets beyond the US, but the onboarding is more involved and support is not India-specific. Check that the broker currently accepts Indian residents and which of its entities will hold your account, because that decides which investor protection rules apply.

3. GIFT City: NSE IX Global Access

NSE International Exchange (NSE IX), based in GIFT City and regulated by the International Financial Services Centres Authority (IFSCA), launched its Global Access platform with US markets live from 28 February 2026. Resident Indians can buy US-listed shares and ETFs through IFSC brokers, with Aadhaar and PAN-based KYC, fractional investing and trades settled in US dollars. Money still goes out under LRS, so the US$250,000 limit and TCS both apply.

4. GIFT City mutual funds

Fund houses have started offering retail schemes from GIFT City that invest globally. DSP’s Global Equity Fund in GIFT City, for example, was launched in June 2025 with a US$5,000 minimum. These count towards your LRS limit and attract TCS, but they are not restricted by the overseas investment cap that limits Indian mutual funds.

5. Indian international mutual funds, FoFs and ETFs

You can invest in rupees in Indian funds that buy US shares, either directly (for example, Nasdaq 100 or S&P 500 index funds and ETFs) or through a fund of funds (FoF) that holds a foreign fund. There is no LRS remittance, no TCS and no foreign asset reporting for you, because you own an Indian fund. For the trade-offs between the two wrappers, see our guide to ETFs vs mutual funds.

The catch is capacity. RBI and SEBI cap the whole mutual fund industry’s overseas investment at US$7 billion, with a separate US$1 billion cap for investments in overseas ETFs. The industry hit the US$7 billion limit in early 2022, and SEBI asked funds to stop fresh overseas investments. Since then, funds have opened and closed as headroom appears through redemptions or market falls. As of July 2026, Value Research data showed 54 of 66 tracked international funds were not accepting fresh money. AMFI has asked regulators to raise the cap, but no increase had been announced as of October 2026. When subscriptions are restricted, Indian-listed international ETFs often trade at a premium to their underlying value, so check the price against the indicative NAV before buying.

Comparing the routes

Route	Uses LRS and TCS?	What you can buy	Schedule FA reporting?	Main drawback
Indian app with US partner broker	Yes	US shares and ETFs, often fractional	Yes	Forex markup and platform fees
Foreign broker direct	Yes	US and other global markets	Yes	More complex onboarding; check investor protection
NSE IX Global Access (GIFT City)	Yes	US shares and ETFs	Check with your tax adviser	New platform; limited track record
GIFT City mutual funds	Yes	Global fund portfolios	Check with your tax adviser	Higher minimums (for example, US$5,000)
Indian international MF, FoF or ETF	No	US index or active portfolios	No	Many funds closed to new money; ETF premiums

The real cost of sending money abroad

The brokerage on a US trade is often small or zero. The bigger costs are in converting rupees to dollars and back:

• Forex markup: the gap between the rate you get and the interbank or RBI reference rate. It varies widely by bank and platform, and you pay it again when you convert dollars back to rupees.
• Remittance fee: a flat bank charge per outward transfer, plus GST, and sometimes a receiving or intermediary bank charge in the US.
• GST on currency conversion: calculated on a deemed value by slab. For amounts above ₹10 lakh the taxable value is ₹5,500 plus 0.1% of the amount above ₹10 lakh, capped at ₹60,000, and GST is 18% of that.
• Platform fees: some apps charge a subscription or an account fee, and some foreign brokers charge for withdrawals.

Worked example: Rohan remits ₹15 lakh

Suppose Rohan has made no other LRS remittance this financial year and sends ₹15 lakh to a US brokerage account. Assume a 1% forex markup and a bank fee of ₹1,000 plus GST. These are illustrative figures, not quotes.

1. TCS: 20% × (₹15,00,000 − ₹10,00,000) = ₹1,00,000. Rohan pays this to the bank on top of the ₹15 lakh, and claims it back in his tax return.
2. Forex markup: 1% × ₹15,00,000 = ₹15,000.
3. GST on conversion: taxable value = ₹5,500 + 0.1% × ₹5,00,000 = ₹6,000; GST = 18% × ₹6,000 = ₹1,080.
4. Bank fee: ₹1,000 + 18% GST = ₹1,180.

Rohan’s unrecoverable cost is ₹15,000 + ₹1,080 + ₹1,180 = ₹17,260, or about 1.15% of the amount sent, before he buys a single share. He also has ₹1 lakh of TCS tied up until his refund or tax set-off. Had he split the transfer so that ₹10 lakh went this financial year and ₹5 lakh after 1 April, he would have paid no TCS at all.

How US investments are taxed

Dividends: 25% US withholding, then Indian tax with a credit

US companies withhold 30% tax on dividends paid to foreigners. If you file Form W-8BEN with your broker, the India-US tax treaty (DTAA) reduces this to 25%. In India the gross dividend is added to your income and taxed at your slab rate, and you claim a foreign tax credit for the US tax by filing Form 67 before your return. Under the new Income-tax Act, 2025, the same statement is being renumbered as Form 44 from tax year 2026-27 onwards.

Suppose Rohan receives a US$1,000 dividend, US$250 is withheld, and the rupee rate used is ₹88 (hypothetical). His Indian taxable income rises by ₹88,000. At a 30% slab, Indian tax is ₹26,400 plus cess. His credit is US$250 × ₹88 = ₹22,000, so he pays ₹4,400 more in India, plus cess. If his slab were below 25%, the credit would be limited to the Indian tax on that income, and the excess US tax would be lost. Our article on dividends versus capital gains explains why total return matters more than yield.

Capital gains: taxed in India

As a non-resident of the US, you generally pay no US tax on capital gains from selling shares. In India, foreign shares are taxed like unlisted shares, and Budget 2026 did not change these rules:

• Held more than 24 months: long-term capital gains taxed at 12.5%, without indexation.
• Held 24 months or less: short-term gains added to income and taxed at your slab rate.
• The ₹1.25 lakh yearly exemption for listed Indian equity does not apply.

Gains are worked out in rupees, so a falling rupee adds to your taxable gain. Suppose Rohan buys shares for US$10,000 when the dollar is at ₹85 (cost ₹8,50,000) and sells them 30 months later for US$14,000 at ₹88 (₹12,32,000). His long-term gain is ₹3,82,000 and tax is 12.5% × ₹3,82,000 = ₹47,750, plus cess. Indian international funds and FoFs bought after 1 April 2023 are taxed the same way: 12.5% after 24 months, slab rate before. For ways to plan the timing of sales, see our guide to reducing capital gains tax.

Schedule FA and the Black Money Act

If you hold any foreign shares, accounts or other foreign assets, you must file ITR-2 or ITR-3 (not ITR-1) and disclose them in Schedule FA, even if you earned nothing from them. Schedule FA follows the calendar year (January to December), not the financial year, so check the period carefully.

Failing to report foreign assets can attract a ₹10 lakh penalty under the Black Money Act. From 1 October 2024, this penalty does not apply where foreign assets other than immovable property total ₹20 lakh or less, but tax on any unreported income is still due. For people who missed reporting in past years, a one-time Foreign Assets of Small Taxpayers Disclosure Scheme (FAST-DS) is open from 16 August to 31 December 2026, offering immunity from Black Money Act penalties and prosecution on payment of the specified amounts.

US estate tax: the US$60,000 risk

If a non-resident, non-US citizen dies holding US shares or US-domiciled ETFs, the US can levy estate tax on value above just US$60,000, at rates from 18% to 40%. India has no estate tax treaty with the US to raise this limit. Your heirs may need to deal with US paperwork before the broker releases the shares. Investors with large US holdings often look at Ireland-domiciled ETFs, Indian international funds or GIFT City funds, which hold US shares indirectly; take professional advice before restructuring.

Step-by-step checklist

1. Decide how much of your portfolio should be overseas; our guide to asset allocation can help you set a target.
2. Choose a route: an Indian fund if you want simplicity, or a direct account if you want specific US shares.
3. For a direct account, check the regulator, partner broker, custodian and investor protection, and compare total fees including forex markup.
4. Complete KYC and submit Form W-8BEN so dividends are withheld at 25%, not 30%.
5. Plan remittances around the ₹10 lakh TCS threshold, and keep the bank’s Form A2 and remittance advice.
6. Keep records of each purchase, sale, dividend and exchange rate for tax filing.
7. Each year, file ITR-2 or ITR-3 with Schedule FA, claim the foreign tax credit by filing Form 67 (Form 44 under the new Act) in time, and claim TCS credit.

Common mistakes

• Skipping Schedule FA because the holding is small or earned nothing. Disclosure is required regardless.
• Missing Form 67, which can mean losing the credit for US tax withheld on dividends.
• Making many small transfers and paying a fixed bank fee each time.
• Ignoring currency risk. A rising rupee can wipe out part of your dollar gains, just as a falling rupee adds to them.
• Buying an Indian international ETF at a large premium to its NAV when fresh creation of units is restricted.

FAQs

Is it legal for Indians to buy US stocks?

Yes. RBI’s Liberalised Remittance Scheme allows resident individuals to remit up to US$250,000 a year for permitted purposes, including buying listed foreign shares and ETFs. Leveraged trading and margin remittances are not allowed.

How much TCS is charged on money sent to buy US stocks?

Nothing on the first ₹10 lakh of LRS remittances in a financial year, and 20% on the amount above that, for investment purposes (as of October 2026). TCS can be claimed as a credit or refund when you file your income tax return.

How are US stock gains taxed in India?

Gains on shares held more than 24 months are taxed at 12.5% without indexation; shorter-term gains are taxed at your slab rate. Gains are calculated in rupees, and the ₹1.25 lakh exemption for Indian listed equity does not apply.

Can I invest in US stocks without LRS?

Yes, through Indian mutual funds, FoFs and ETFs that invest in US shares, which you buy in rupees. Many of these are closed to fresh investment because the industry’s US$7 billion overseas cap has been reached, so check whether a fund is accepting lump sums or SIPs.

Do I need to report US shares in my tax return?

Yes. Resident taxpayers must disclose foreign shares and accounts in Schedule FA of ITR-2 or ITR-3, even if there was no income. Non-disclosure can attract a ₹10 lakh penalty under the Black Money Act, except where non-property foreign assets total ₹20 lakh or less.

What happens to my US shares if I die?

Your nominee or heirs can claim them, but the US may charge estate tax of 18% to 40% on US assets above US$60,000 for non-residents. The claim process can involve US tax filings, so keep nominations updated and discuss large holdings with an adviser.