How to invest in US stocks from India: routes, LRS and taxes

Global investing · 8 min read · Educational, not advice

Owning a slice of the world's largest companies is legal, practical and increasingly common for Indian investors - but the route you choose decides your paperwork, your costs and your taxes. This guide walks through the three routes, the LRS rules that govern the money leaving India, and the honest costs nobody advertises. For the basics of stock investing itself, start with how to invest in stocks.

First, the rule that makes it all possible: LRS

The RBI's Liberalised Remittance Scheme (LRS) lets a resident Indian remit up to USD 250,000 per financial year abroad for permitted purposes - foreign stocks included. Two practical notes attach to it. First, remittances beyond a threshold (raised to ₹10 lakh per financial year in the 2025 budget) attract TCS - tax collected at source - at the rate applicable to investment remittances. TCS is not money lost: it adjusts against your income-tax liability or comes back as a refund, but it does lock up cash in the meantime. Second, LRS is per person - a family can remit more in aggregate. Rates and thresholds move around at budget time; verify the current numbers before remitting.

The three routes

1. An Indian platform with international investing

Several Indian brokers and apps offer US investing through tie-ups with US brokers. Convenient, familiar KYC, rupee-denominated view - but compare the full cost: account fees, brokerage, and above all the currency conversion charge, which is usually the largest cost of the whole exercise and the least advertised.

2. A direct account with an international broker

Some US and global brokers open accounts for Indian residents directly. Often the cheapest per-trade route with the widest market access, at the cost of more paperwork - W-8BEN forms, self-managed remittances, and self-reported taxes.

3. The rupee route: Indian funds that hold US assets

Indian mutual funds, ETFs and fund-of-funds that invest in US markets skip LRS entirely: no remittance, no conversion fees, no foreign brokerage account, and Indian fund taxation. The honest catch - the industry operates under overall overseas-investment limits, and when those fill up, schemes have periodically paused fresh inflows. Availability varies; check whether the scheme you want is currently open.

The tax picture, in one honest paragraph

Dividends from US stocks face US withholding (typically 25% for Indian residents under the tax treaty); India then taxes the dividend at your slab, with credit for the US tax already paid (claimed via the treaty paperwork, so keep records). Capital gains are not taxed by the US for non-resident investors but are taxed in India - long-term (held over 24 months) at a concessional rate, short-term at your slab. And one genuinely under-discussed point: US estate tax can apply to US-situs holdings above roughly USD 60,000 on the death of a non-resident holder - worth understanding before building a large direct portfolio. All of these rates move; treat this as a map, not the law, and confirm current rules with a professional.

The costs that actually matter

Currency conversion - typically the biggest cost, both going in and coming out. Compare the all-in conversion rate across platforms, not the advertised "zero brokerage".
TCS cash-flow - not a cost in the end, but money parked with the tax department until adjusted or refunded.
Two layers of movement - your return in rupees is the stock's move plus the dollar-rupee move. Sometimes they add, sometimes they cancel. Judge results over years, not weeks.

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Key takeaways

LRS allows up to USD 250,000 per person per financial year; TCS applies above the separate ₹10 lakh threshold and adjusts against your taxes.
Three routes: Indian platforms with US tie-ups, direct international brokers, or rupee-route Indian funds (no LRS, but subject to industry limits).
Currency conversion is usually the biggest real cost - compare it, not just brokerage.
Dividends: ~25% US withholding, creditable in India. Gains: taxed in India. Large direct holdings: understand US estate tax.

Frequently asked questions

Can Indians legally invest in US stocks?

Yes. Under the RBI's Liberalised Remittance Scheme (LRS), a resident Indian can remit up to USD 250,000 per financial year abroad for permitted purposes, including buying foreign stocks. You invest through a broker or platform that supports international investing, or indirectly through Indian funds that hold US assets. Rules change - verify current limits before remitting.

How much tax do I pay on US stocks from India?

Two layers, broadly: the US withholds tax on dividends (typically 25% for Indian residents under the India-US treaty), which can usually be credited against your Indian tax on that dividend. India taxes your capital gains - long-term gains (held over 24 months) at a concessional rate, short-term gains at your slab. Remittances above the TCS threshold (₹10 lakh in a financial year, as of the 2025 budget) also attract TCS, which is not an extra cost forever - it adjusts against your tax liability. Exact rates change; confirm with a tax professional.

What is the cheapest way to get US stock exposure from India?

Often not remitting at all: Indian mutual funds and ETFs that invest in US markets can be bought in rupees with no LRS paperwork and no currency conversion fees, though these schemes have periodically paused fresh inflows when industry-wide overseas limits fill up. If you remit directly, currency conversion is usually the biggest hidden cost - compare the full conversion charge, not just brokerage.

Is there any risk unique to holding US stocks directly?

One worth knowing: US estate tax can apply to US-situs assets above a modest threshold (around USD 60,000) for non-resident holders on death - a real planning point for larger portfolios that surprises many investors. Currency movement between the rupee and dollar also adds a second layer of gain or loss on top of the stock itself.

Educational guidance only, not financial, tax or investment advice. Rules, limits and tax rates mentioned were current as of mid-2026 and change often - always verify with official sources or a licensed professional before acting. Investments can fall as well as rise; past performance does not predict future results.