Investment Guide

How to Invest in US Stocks from India

Apple, Microsoft, Nvidia or an S&P 500 ETF — resident Indians can own them legally. Here is how the LRS route works, what it costs, how it is taxed in India, and the alternatives if you prefer rupee investing.

Last content review: September 26, 2026

Tap any tile to see how it works.

The short answer

You have three main routes: (1) buy US shares directly through an app or broker by sending money abroad under LRS, (2) international mutual funds that invest overseas in rupees, or (3) international ETFs listed in India. Direct investing gives the widest choice; the rupee routes are simpler but currently face fund closures and ETF premiums.

Compare the three routes

RouteHow it worksWatch out for
Direct (LRS)Open an account with a US-stocks app or global broker, remit dollars, buy stocks or ETFs held with a US custodian.Forex markup, bank transfer fees, TCS, Schedule FA reporting, US estate tax above ~$60,000.
International mutual fundsInvest in rupees in a fund of funds that buys overseas stocks or ETFs.Industry-wide ~$7 billion overseas cap — many funds pause lump sums and new SIPs without notice.
Indian-listed international ETFsBuy Nasdaq or S&P 500 ETFs on NSE/BSE through your normal demat account.Prices can trade far above NAV. In September 2026 some traded 20–68% above their real value — always compare price with iNAV.

Step by step: buying US stocks directly

  1. 1

    Pick a platform

    Compare account fees, forex markup, withdrawal charges and who holds your shares (the US custodian). Prefer platforms that clearly disclose these.

  2. 2

    Complete KYC and Form W-8BEN

    You will verify PAN, Aadhaar/address and bank details, and sign W-8BEN, which tells the US you are an Indian tax resident so dividends are withheld at the treaty rate.

  3. 3

    Send money under LRS

    Your bank converts rupees to dollars and wires them abroad. You declare the purpose (overseas portfolio investment) and the bank collects TCS above the yearly threshold.

  4. 4

    Buy stocks or ETFs

    Start with broad ETFs if you are new. Fractional shares let you invest small amounts in expensive stocks.

  5. 5

    Keep records and file correctly

    Save statements and dollar conversion rates. Report holdings in Schedule FA, gains and dividends in your ITR, and file Form 67 before the ITR to claim credit for US tax withheld.

Quick TCS estimator

Enter your total LRS remittance for investment this financial year.

Remitted

₹15,00,000

Above ₹10 lakh

₹5,00,000

Estimated TCS (20%)

₹1,00,000

Estimate only. Assumes the ₹10 lakh yearly threshold applies across all your LRS remittances and a 20% rate on the excess for investment purposes. TCS is adjustable against your tax or refundable via ITR. Confirm current rates with your bank before remitting.

How US stocks are taxed for Indian residents

  • Capital gains: taxed only in India. Held over 24 months — 12.5% long-term capital gains tax. Held 24 months or less — added to income at your slab rate.
  • Dividends: the US withholds tax (generally 25% with W-8BEN). The dividend is also taxable in India at slab rate, with credit for the US tax via Form 67.
  • Reporting: use ITR-2 or ITR-3 (not ITR-1), and fill Schedule FA for foreign assets held during the calendar year.
  • Currency: gains are calculated in rupees using the prescribed exchange rates, so rupee depreciation can raise your taxable gain.

Rules summarised for FY 2026-27. Tax law changes frequently; confirm with a chartered accountant, especially for large holdings.

Why Indians invest in the US — and the honest risks

Potential benefits

  • Access to global leaders in technology, healthcare and consumer brands
  • Geographic diversification beyond Indian markets
  • Dollar exposure — historically the rupee has weakened over long periods

Risks and costs

  • Currency can move against you; rupee appreciation reduces returns
  • Forex markup and transfer fees on every deposit and withdrawal
  • Extra paperwork every year (Schedule FA, Form 67)
  • US estate tax exposure above roughly US$60,000 of US assets
  • Single-stock concentration — popular tech names can fall sharply

A common approach is to keep international exposure to a modest share of your portfolio and to prefer broad, low-cost ETFs over a handful of trending stocks.

Frequently asked questions

Is it legal for Indians to invest in US stocks?

Yes. Resident individuals can invest in foreign listed shares under RBI’s Liberalised Remittance Scheme, up to US$250,000 per financial year across all permitted LRS purposes.

Do I pay tax twice on US dividends?

The US withholds tax on dividends — generally 25% for Indian residents who submit Form W-8BEN. The dividend is also taxable in India, but you can claim a foreign tax credit by filing Form 67 before your ITR, so you usually do not pay twice on the same income.

How are gains on US stocks taxed in India?

Foreign shares held for more than 24 months are taxed as long-term capital gains at 12.5%. If held for 24 months or less, gains are added to your income and taxed at your slab rate. The US generally does not tax capital gains of Indian residents.

Can I buy fractional US shares from India?

Several platforms let you buy fractions of a share, so you can invest small amounts in expensive stocks. Check the platform’s custodian, fees and forex markup first.

Why are some international mutual funds not accepting money?

Indian mutual funds together can invest only about US$7 billion overseas. When a fund house uses up its share of that limit, it stops fresh lump sums or new SIPs until investors redeem.

Is there any US estate tax risk?

Yes. For non-US persons, US-situated assets such as US shares above about US$60,000 may be subject to US estate tax on death. Keep nominations updated and consider this before building a large direct US holding.

Sources and further reading

Educational content only, not investment or tax advice. StockAnalyzer AI is not a SEBI-registered investment adviser.

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