Buying US shares from India is legal, fairly cheap and open to any resident individual. The hard parts are the rules around it: how much you can send, what the bank collects at source, how gains and dividends are taxed in India, and what you must disclose. This guide covers all of that for Tax Year 2026-27 (1 April 2026 to 31 March 2027), the first year under the Income-tax Act, 2025. It explains the routes; it does not recommend any platform, fund or stock.
Why Indians look at US markets
A US allocation gives you companies that have little presence on Indian exchanges, and it gives you dollar exposure. When the rupee weakens against the dollar, your US holdings are worth more in rupees even if the shares do not move. When it strengthens, the opposite happens. Indian and US markets also do not always fall together, which is the point of diversifying. None of this guarantees a higher return. It changes the mix of risks you hold.
The Liberalised Remittance Scheme (LRS)
The Reserve Bank of India lets every resident individual, including minors, remit up to US$2,50,000 per financial year (April to March) under the Liberalised Remittance Scheme. At about ₹96 to the dollar in late September 2026, that is roughly ₹2.4 crore a year. Overseas portfolio investment, which includes buying foreign shares and funds, is a permitted use.
Some things are not allowed under LRS. You cannot send money to meet margins or margin calls on overseas exchanges, and you cannot remit to trade foreign exchange abroad. In practice that rules out leveraged and margin trading from an LRS-funded account.
The ₹10 lakh TCS threshold
From 1 April 2025 (Budget 2025; now Section 394 of the Income-tax Act 2025, formerly section 206C(1G)), if you remit more than ₹10 lakh in a financial year under LRS for investment and most other purposes, the bank collects Tax Collected at Source (TCS) at 20% on the amount above ₹10 lakh. Education and medical remittances attract 2% above ₹10 lakh from 1 April 2026 (nil if funded by an education loan). Budget 2026 did not change the 20% rate for investment.
| Remittance for investment in a financial year | TCS rate | TCS collected |
|---|---|---|
| Up to ₹10 lakh | 0% | ₹0 |
| ₹12 lakh (example) | 20% on excess | ₹40,000 (on ₹2L excess) |
| ₹15 lakh (example) | 20% on ₹5L | ₹1,00,000 |
TCS is not an extra tax. It is collected against your PAN and shows in your annual information statement (Form 168, formerly Form 26AS). You claim it as a credit when you file your return, and salaried people can ask their employer to count it when working out TDS. What it does affect is cash flow: the money is locked up until you claim it. Our TCS on foreign remittance guide for 2026 covers the full rate card and how to claim the credit.
Four ways to invest in US stocks from India
Route 1: Direct, through an overseas brokerage account
You open an account with a US-regulated broker, either directly with an international broker or through an Indian app that partners with one. You send money under LRS through your bank, and the bank collects TCS above the ₹10 lakh threshold. You can then buy individual US shares and US-listed ETFs, often in fractions of a share.
- What you own: US securities held in your name at a US broker.
- Paperwork: the broker will ask for Form W-8BEN, which documents that you are a foreign person. This is what lets the broker apply the India–US treaty rate on dividends instead of the default 30%.
- Costs to compare: account and transaction fees, the bank's or platform's currency conversion margin, and any charge for sending money back to India.
- Extra duties: Schedule FA disclosure in India and possible US estate tax exposure (both covered below).
Route 2: Indian mutual funds that invest abroad
Many Indian AMCs offer funds that invest in US markets, such as Mirae Asset NYSE FANG+ ETF Fund of Fund, Motilal Oswal Nasdaq 100 FoF, Franklin U.S. Opportunities Equity Active Fund of Funds. You invest in INR, no LRS or TCS applies. Caveat: because of SEBI's industry-wide overseas investment limit (US$7 billion for the industry, US$1 billion for overseas ETFs), these funds were not accepting new SIPs or lump sums as of 29 September 2026 — check before you plan on them. Existing SIPs may continue. Our guide to international mutual funds covers these funds in more detail.
Route 3: International ETFs listed on NSE/BSE
Several international ETFs trade on Indian exchanges, such as Mirae Asset NYSE FANG+ ETF, Motilal Oswal NASDAQ 100 ETF and Mirae Asset S&P 500 Top 50 ETF. You buy them in rupees through your demat account like any Indian share, with no LRS remittance or TCS. Note that the Motilal Oswal NASDAQ 100 ETF, Mirae Asset S&P 500 product is an index fund, not an ETF. Because these ETFs are subject to the same overseas limits, compare the market price with the ETF's indicative NAV before you buy. Our ETF vs mutual fund vs index fund guide explains how the wrappers differ.
Route 4: GIFT City (IFSC)
Under the RBI's LRS Master Direction, banks may send LRS money to International Financial Services Centres (IFSCs) in India, such as GIFT City in Gujarat. There you can use financial products offered under the International Financial Services Centres Authority Act, 2019, and you can open a foreign currency account in the IFSC to invest in other foreign jurisdictions. That account cannot be used to settle domestic transactions with other residents. Money sent to an IFSC is still an LRS remittance, so it counts towards the US$2,50,000 limit. Ask the provider how TCS and any fees apply before you transfer.
How the routes compare
| Direct (LRS) | Indian FoF | India-listed ETF | GIFT City | |
|---|---|---|---|---|
| LRS remittance needed | Yes | No | No | Yes |
| TCS above ₹10 lakh | Yes | No | No | Check with provider |
| Long-term holding period (India) | Over 24 months | Over 24 months | Over 12 months | Depends on product |
| Schedule FA | Yes | No | No | Check with your CA |
| Open to new money (Sep 2026) | Yes | Mostly closed | Yes, on exchange | Yes |
To compare a US-listed ETF with an Indian fund on cost and return, try our US ETF vs mutual fund analyser.
How US stock gains are taxed in India (Tax Year 2026-27)
If you are a resident of India, your worldwide income is taxable here. Gains on US shares are capital gains in India, worked out in rupees.
Capital gains
- Short-term (held 24 months or less): added to your income and taxed at your slab rate (up to 30%).
- Long-term (held more than 24 months): 12.5% without indexation (post-Budget 2024). This 24-month rule is for US shares and ETFs you hold directly; India-listed international ETFs qualify after 12 months, international FoFs after 24 months. Long-term gains on foreign shares now fall under section 197 of the Income-tax Act 2025 (formerly section 112).
- No ₹1.25 lakh exemption: that yearly exemption is for listed Indian equity and equity-oriented funds. It does not cover US shares or international FoFs.
Track your cost in rupees. The rupee value at purchase and at sale both matter, so a weaker rupee raises your taxable gain even if the share price in dollars is flat. To see what a holding has actually earned per year, use our CAGR calculator on the rupee values.
On the US side, a non-resident alien who is in the US for less than 183 days in the year is generally not taxed by the US on capital gains from selling US shares (IRS Publication 519). So for most Indian residents, gains are taxed only in India.
Dividends
- US companies withhold tax on dividends paid to non-US persons. Under Article 10 of the India–US tax treaty the rate is capped at 25% for a portfolio investor (15% applies only to a company holding at least 10%). Without a valid W-8BEN, the broker may withhold 30%.
- In India, the full dividend is taxable at your slab rate.
- You can claim credit for the US tax against your Indian tax on the same income under section 159 of the Income-tax Act 2025 (treaty relief). To do that, file Form 44 (formerly Form 67) with your return. Missing it has led to credits being denied. The credit cannot exceed the Indian tax on that dividend.
For the treaty in more detail, see our India–US DTAA guide.
PFIC rules (for US-listed funds)
If you invest in US-domiciled ETFs (like VOO or QQQ directly via a US brokerage), you may read about PFIC (Passive Foreign Investment Company) rules under US tax law. PFIC rules apply to US taxpayers holding non-US funds — so they matter for a US-resident NRI holding Indian mutual funds, not for an Indian resident buying US-domiciled ETFs. Form 8621 is filed by US persons (IRS Instructions for Form 8621). If you are that US-resident NRI, our PFIC guide explains the rules.
Schedule FA: the disclosure most people miss
If you are resident and ordinarily resident (ROR) in India, you must report foreign assets, including shares and cash held with a US broker, in Schedule FA of your income-tax return. This applies even if you earned nothing from them that year. Schedule FA follows the calendar year (January to December), not the April–March tax year. Report foreign income such as dividends and the credit you claim in the foreign-income schedules (Schedule FSI and TR) as well. NRIs and RNORs do not have to fill Schedule FA.
The stakes are real. Under the Black Money Act, failing to disclose a foreign asset can attract a penalty of ₹10 lakh. From 1 October 2024 that penalty does not apply where the total value of non-immovable foreign assets, such as shares and bank balances, is up to ₹20 lakh. Disclose anyway: the rule exists to excuse small slips, not to replace reporting.
Units of Indian FoFs and India-listed international ETFs are Indian assets, so they do not go in Schedule FA.
US estate tax: the risk most guides skip
The US taxes the estates of non-US citizens who are not US residents on assets situated in the US. Stock of US companies counts as US-situated property wherever the shares are held, and so do other US marketable securities. If the value of your US-situated assets at death (plus certain lifetime gifts) exceeds US$60,000, your executor must file Form 706-NA, and US estate tax may be due. This threshold is not indexed for inflation. The US has estate tax treaties with a short list of countries; India is not on it.
What this means in practice:
- A direct holding of US shares or US-listed ETFs above about US$60,000 brings this into play for your heirs.
- Name a nominee or beneficiary with the broker, and keep records your family can find.
- With Indian FoFs and India-listed international ETFs you own units of an Indian fund, not US securities, so this filing does not apply to you directly.
Rules here are technical. If your US holdings are large, speak to a cross-border tax adviser.
Practical tips before you start
- Know the TCS line. Remitting ₹10 lakh or less a year for investment means no TCS. Above that, 20% of the excess is collected and comes back as a credit.
- Check whether a fund is open before planning SIPs into an Indian FoF. In September 2026, most US-focused FoFs were closed to new money.
- File Form 44 (formerly Form 67) if you received dividends with US tax withheld, so you can claim the credit.
- Fill Schedule FA every year you hold US assets as an ROR, on a calendar-year basis.
- Track cost in rupees, with the exchange rate on the date of each purchase and sale.
- Size the allocation to your plan, not to recent US returns. Currency moves cut both ways.
Foreign dividends and gains also feed into your choice of tax regime. See New vs Old Tax Regime, Tax Year 2026-27: Which Is Better? And to weigh a US ETF against an Indian fund before you commit, run both through the US ETF and mutual fund analyser.
This guide explains how investing in US stocks from India works and how it is taxed. It is not a recommendation to buy any platform, fund or security. Tax rules depend on your residential status; confirm details with a tax adviser for large holdings.
