# Tax on US Stocks in India: LRS, TCS, Gains and Dividends > Tax on US stocks for Indian residents: LRS limits, TCS on remittances, capital gains after 24 months, US dividend withholding, DTAA and Schedule FA. Source: https://trykosh.com/learn/tax-on-us-stocks-india Guide - Investing # Tax on US stocks and foreign investments for Indian residents Buying US shares from India is easy now; the tax and the rules around it are not. Money goes out under the RBI's Liberalised Remittance Scheme, TCS is collected on the way, gains and dividends are taxed in India, and the holdings must be reported every year. Updated 30 October 20265 min readBy the Kosh team On this page[Getting money out: the Liberalised Remittance Scheme](#lrs)[TCS: collected up front, not an extra tax](#tcs)[Capital gains on US shares](#capital-gains)[Dividends, withholding and the tax treaty](#dividends)[Reporting: Schedule FA every year](#schedule-fa)[Other things to weigh](#other)[FAQs](#faq) ## Getting money out: the Liberalised Remittance Scheme Resident individuals can send up to **USD 250,000 per financial year** abroad under the RBI's Liberalised Remittance Scheme (LRS). The limit covers every purpose together: investments, travel, gifts, education. It is per person, so a couple has two limits. You need a PAN, and your bank files the remittance under the purpose code you choose. - **Allowed:** buying listed foreign shares, ETFs and similar portfolio investments, and holding a foreign brokerage account. - **Not allowed:** margin trading or leveraged forex trading abroad, and remitting for anything prohibited under FEMA. - **Idle money:** remitted funds that aren't used for the stated purpose are expected to come back within 180 days, so don't park cash abroad indefinitely waiting for a dip. ## TCS: collected up front, not an extra tax Banks collect **tax collected at source (TCS)** on LRS remittances above a yearly threshold, currently **INR 10 lakh** across all your remittances in a financial year, at a higher rate for investment remittances than for education or medical costs. The rates have been revised several times in recent Budgets, so check the rate your bank applies before a large transfer. TCS is not a cost. It shows in your Form 26AS and AIS and is credited against your tax for the year, or refunded when you file. Salaried people can also give their employer the TCS details so it is counted against the TDS on their salary, which avoids waiting for a refund. The real cost is cash flow: a large remittance ties up the TCS amount until the credit comes through. ## Capital gains on US shares For Indian tax, shares listed only on a foreign exchange are treated like unlisted shares. No securities transaction tax is paid, so the listed-equity rules don't apply. Tax on foreign investments for a resident, FY 2026-27 (plus surcharge, capped at 15% for capital gains, and 4% cess) Investment Long-term after Short-term Long-term US-listed shares and ETFs bought directly 24 months Your slab rate 12.5%, no indexation, no INR 1.25 lakh exemption Dividends from US shares -- Your slab rate, with credit for US tax withheld Same Indian international funds of funds (not equity-oriented for Indian tax) 24 months Your slab rate 12.5%, no indexation Example: you sell US shares held for three years at a rupee gain of INR 6,00,000. Tax is 12.5% plus cess: **INR 78,000**. Sell the same shares after 20 months and the gain joins your income; at the 30% slab that's **INR 1,87,200**. The two-year line matters more than it does for Indian equity. For Indian international funds, how units bought between April 2023 and March 2025 are treated has changed with recent Budgets; your fund house's capital gains statement will show the classification it applies. Gains are computed in rupees. The rules prescribe conversion at SBI's telegraphic transfer buying rate on specified dates, and a falling rupee between purchase and sale adds to the taxable gain. The US generally doesn't tax capital gains of non-US persons on shares, so the Indian tax is usually the only one. ## Dividends, withholding and the tax treaty US companies withhold tax on dividends before you see them: **25%** for Indian residents under the India-US treaty if you've filed a W-8BEN with your broker, otherwise 30%. India taxes the dividend at your slab rate and gives credit for the US tax up to the Indian tax on that income. At the 30% slab, Indian tax is 31.2%, so roughly 6% more is payable in India. To claim the credit, file **Form 67** (or its successor under the new rules) on the income-tax portal along with your return, and report the dividend in Schedule FSI and the credit in Schedule TR. Without Form 67, the credit can be denied. The [dividend tax calculator](/tools/dividend-tax-calculator) works out the Indian side. ## Reporting: Schedule FA every year If you're resident and ordinarily resident, every foreign account and holding goes in **Schedule FA** of your return, for the reporting period (generally the calendar year ending in the tax year), with peak and closing values and income. That applies even in a year you didn't buy or sell, and it means filing ITR-2 or ITR-3, not ITR-1. Missing it can attract a INR 10 lakh penalty under the Black Money Act. Since 2024, movable foreign assets below INR 20 lakh in aggregate are spared that penalty, but disclosure is still required. The [RSU guide](/learn/rsu-taxation-india) covers the same schedule for employee shares. ## Other things to weigh - **US estate tax.** Non-US persons holding US-situated assets, which include shares of US companies, can face US estate tax on holdings above USD 60,000 at death. The India-US treaty doesn't cover estate tax. Large direct US holdings are worth discussing with an adviser who knows cross-border estates. - **Indian funds investing abroad** avoid LRS, TCS, US withholding paperwork and Schedule FA, at the cost of fund expenses. Industry-wide overseas investment limits have, at times, paused fresh investments in these funds. - **Advance tax.** Large gains or dividends create advance-tax liability; pay in the instalment after the sale. See the [advance tax guide](/learn/advance-tax-guide). - **Currency is part of the bet.** Your rupee return is the US return plus or minus the exchange-rate move. Decide how much foreign exposure you want as part of your [overall allocation](/learn/wealth-planning-for-high-earners-india), not stock by stock. [Free tool**Capital gains tax calculator**Pick the asset, enter the purchase and sale dates and prices, and Kosh tells you whether the gain is short-term or long-term and works out the tax under the FY 2026-27 rules.](/tools/capital-gains-tax-calculator)[Free tool**Dividend tax calculator**Dividends are taxed in your hands at your slab rate. Enter your dividends and salary to see the real tax, the TDS companies deduct, and what you still need to pay.](/tools/dividend-tax-calculator)[Free tool**Advance tax calculator**Split this year's tax into the four advance-tax instalments, net of TDS, so you pay on time and avoid interest.](/tools/advance-tax-calculator)[Free tool**Net worth calculator**Your net worth is everything you own minus everything you owe. Fill in the assets and loans Indian households usually hold to see the number, how it is spread and how much of it you could actually use.](/tools/net-worth-calculator) **Where Kosh fits** Kosh reads the remittances and TCS in your bank statements, tracks foreign holdings as part of your net worth and allocation, and reminds you of advance tax after a sale. It doesn't recommend stocks, funds or platforms, and it doesn't file Schedule FA. ## Frequently asked questions How are US stocks taxed in India? For a resident, gains on US shares held for more than 24 months are taxed at 12.5% without indexation and without the INR 1.25 lakh exemption. Gains on shares held for 24 months or less are added to your income and taxed at your slab rate. Dividends are taxed at slab rates. How much money can I send abroad to buy US stocks? Up to USD 250,000 per financial year per resident individual under the RBI's Liberalised Remittance Scheme. The limit covers all purposes together, including travel, gifts and education. Is TCS on foreign remittance an extra tax? No. TCS is collected by your bank on remittances above INR 10 lakh a year and is credited against your income tax for the year, or refunded when you file. Salaried people can ask their employer to count it against TDS on salary. Is tax on US dividends paid twice? Not in full. The US withholds 25% under the treaty if you have filed a W-8BEN. India taxes the dividend at your slab rate and gives credit for the US tax up to the Indian tax, if you file Form 67 with your return. Do I need to report US stocks in my ITR? Yes. Residents who are ordinarily resident must report foreign accounts and shares in Schedule FA every year, even without any sale or income. Gains and dividends also go in the capital gains and foreign income schedules. ## Sources - [Reserve Bank of India: Liberalised Remittance Scheme](https://www.rbi.org.in/) - [Income Tax Department](https://www.incometax.gov.in/) - [SEBI investor education](https://investor.sebi.gov.in/) Written by the Kosh team and checked against the rules in force on 30 October 2026. This guide is general information, not tax, legal or investment advice. Kosh is an educational financial planning tool by Primedepth Labs. It is not a SEBI-registered investment adviser and does not offer personalised investment advice, hold your money or execute trades. Markets carry risk; read scheme documents carefully and consult a registered adviser before acting. ## Upload your statement and Kosh does this for you. Kosh reads your bank and card statements, works out your tax under both regimes and turns guides like this one into your own numbers and next steps. [Start free](/signup?via=learn-tax-on-us-stocks-india)