Investing in US Stocks from India via INDmoney

Every finance influencer eventually does a "how to buy Apple and Tesla from India" reel, and most of them stop at the download link. What they skip is the part that actually matters two years later: how the remittance is regulated, what INDmoney takes as its cut on both ends, how the gain gets taxed differently from an Indian stock, and what you are legally required to disclose even if you never sell a single share. This guide covers all of it.

1. Is this even legal? Yes, and here's the framework

Indian residents are fully permitted to buy US-listed stocks. The route runs through the RBI's Liberalised Remittance Scheme (LRS), which allows any resident individual to remit up to USD 250,000 per financial year abroad for permitted purposes, including buying foreign securities.

INDmoney does not operate as a foreign broker you access directly. It is licensed by the International Financial Services Centres Authority (IFSCA) as a Global Access Provider (GAP), operating out of GIFT City, Gujarat. When you invest through INDmoney, your rupees are converted to dollars and moved to a US stocks wallet in GIFT City under LRS, with the remittance paperwork (including the RBI's Form A2) handled inside the app rather than at a bank counter.

Core rule: this is a regulated, RBI-and-IFSCA-governed route, not a grey-market workaround. The trade-off for that regulation is that funds must eventually be repatriated back to an Indian bank account, and every purchase counts against your personal $250,000 LRS ceiling for the year, shared across all your foreign remittances, not just stock purchases.

2. How INDmoney actually works under the hood

Under the hood, INDmoney routes your order to a US-regulated broker-dealer for actual execution and custody, while the compliance and money-movement layer sits in GIFT City. This is the same basic model used by comparable platforms like Vested and Tickertape.

Core rule: you own the real underlying US shares, not a contract for difference or a basket product. That is different from, and generally safer than, unregulated apps that let you "trade" US stock prices without actual ownership.

3. Getting started: the step-by-step

1. Complete KYC in the INDmoney app using PAN and Aadhaar. This activates your US stocks wallet.
2. Sign the W-8BEN form. INDmoney submits this to the US broker on your behalf; it tells the IRS you are an Indian tax resident, which caps US dividend withholding at 25% instead of the default 30%.
3. Fund the wallet with a small test amount first (₹5,000 to ₹50,000), to see the actual FX rate you get and how quickly it settles, before committing a larger sum.
4. Place your first order. Fractional investing means you can buy a slice of a $200 stock with as little as $1, so you do not need the full share price to start.
5. Track your cumulative LRS usage across the financial year, not just what you have sent via INDmoney. If you also send money abroad for a child's education or a foreign holiday in the same year, that counts against the same $250,000 cap.
6. Set a reminder for ITR filing season (July) to disclose the holding, even in a year where you neither bought nor sold anything further.

4. What it actually costs

The advertised "zero account fee" is true but incomplete. There are three real costs stacked on top of each other, and they apply whether you are buying or repatriating.

Core rule: the FX markup, not the brokerage, is usually your biggest recurring cost, because it is charged twice — once when you send money in, once when you bring it back. On a large one-time investment, run the math on the FX spread before assuming "zero fee" means the trade is free.

The 20% TCS above ₹10 lakh is the most misunderstood line item. It temporarily ties up cash (you pay it upfront to the bank) but is not a permanent loss; it gets credited against your income tax liability for the year, or refunded if it exceeds what you owe.

5. How capital gains are taxed

US stocks are treated as unlisted foreign securities for Indian tax purposes, not as listed Indian equity, which is why the tax treatment looks different from a Zerodha or Groww portfolio of Indian stocks.

This is a materially different structure from Indian listed shares. There is no ₹1.25 lakh exemption (that applies only to Section 112A listed Indian equity with STT paid) and no lower LTCG rate below 12.5% for foreign shares — the 12.5% applies from the first rupee of gain once you cross 24 months.

The US itself does not tax non-resident aliens on capital gains from selling stock, so there is no double taxation to untangle on the gains side; the entire tax event happens in India.

Core rule: the 24-month mark is a hard cliff, not a rounding guideline. Selling a stock a few weeks before the two-year mark can shift a gain from a flat 12.5% rate to your full slab rate, which is a meaningfully bigger tax bill for anyone in the 30% bracket.

6. How dividends are taxed

Dividends face two layers of tax, and this is where the W-8BEN you signed at onboarding actually earns its keep.

1. US withholding at source: the standard rate for foreign investors is 30%, but under Article 10 of the India-US Double Taxation Avoidance Agreement (DTAA), a correctly filed W-8BEN reduces this to 25% for individual Indian investors.
2. Indian tax on the gross amount: the full dividend (before the US withholding, not just what lands in your account) must be declared in India as "Income from Other Sources" and taxed at your slab rate.

To avoid paying tax twice on the same money, you claim a Foreign Tax Credit (FTC) for the US tax already withheld, using Form 67, filed before or alongside your ITR. The credit is capped at the lower of your Indian tax liability on that dividend or the US tax actually withheld.

Core rule: the W-8BEN and Form 67 are not optional paperwork, they are the entire mechanism that keeps you from being taxed at close to 55% on the same dividend instead of a fair, DTAA-adjusted rate. INDmoney files the W-8BEN automatically at onboarding; Form 67 typically still needs manual filing each year, and the platform usually provides the underlying numbers to fill it in.

7. What you must disclose every year

This is the part most new investors miss entirely, because unlike an Indian brokerage account, a foreign holding creates a disclosure obligation independent of profit.

• Schedule FA (Foreign Assets), in ITR-2 or ITR-3, requires you to disclose every US stock you hold, the number of shares, and their INR value — even in a year you made no profit, and even if the position has been sitting untouched.
• If you moved money into your US stocks wallet but had not yet bought any shares by the end of the relevant reporting period, the uninvested cash balance itself must still be disclosed.
• Schedule FSI (Foreign Source Income) is where realised capital gains and dividends get reported.
• Form 67 is filed to claim the Foreign Tax Credit on US-withheld dividend tax.

Core rule: Schedule FA disclosure is triggered by holding a foreign asset, not by earning a profit from it. Skipping it is a compliance failure under Indian tax law even in a flat, boring, no-activity year — this is one of the most common and most avoidable mistakes new US-stock investors make at tax time.

8. The estate tax risk almost nobody mentions

This one rarely comes up in "how to invest" content, but it matters if your US holdings grow large: the US estate tax applies to US-situated assets (which includes shares of US corporations) held by non-resident aliens, including Indian citizens, regardless of where they live or die.

• The exemption threshold for non-resident aliens is just $60,000 in US-situs assets — far lower than the multi-million-dollar exemption US citizens get.
• Above that threshold, US estate tax rates run up to 40% on the excess value at the time of death.
• The India-US DTAA covers income taxes only. There is no bilateral estate tax treaty between India and the US, so Indian investors get none of the higher exemptions extended to residents of treaty countries like the UK, Japan, or Germany.

Core rule: this risk only bites at scale, but it is worth knowing before your US portfolio grows into six figures, not after. People with larger US holdings sometimes address this through routes that don't create direct US-situs exposure, such as Indian feeder mutual funds investing in US indices, or by discussing structuring options (like gifting shares to a spouse to split the exposure) with a qualified cross-border tax advisor.

9. Advantages of the INDmoney route

• Regulated and RBI-compliant, unlike unregulated apps offering synthetic US market exposure.
• Genuine fractional ownership — you can start with as little as $1 in a single stock, so high-priced names like Alphabet or Berkshire Hathaway are not out of reach.
• One-app convenience if you already track your Indian portfolio on INDmoney, since US and Indian holdings sit side by side.
• In-app remittance and paperwork, so the LRS Form A2 process is handled digitally instead of at a physical bank branch.
• Automated W-8BEN filing, so you get the correct 25% (not 30%) dividend withholding rate without doing anything extra.
• No separate account opening, AMC, or withdrawal fee.

10. Disadvantages and risks

• FX markup on both legs. You pay a spread converting INR to USD going in, and again converting USD to INR coming out — this compounds if you move money in and out frequently.
• No indexation and a hard tax cliff at 24 months, unlike some Indian asset classes where the tax treatment eases more gradually.
• 20% TCS above ₹10 lakh ties up cash temporarily, even though it is eventually adjustable.
• Mandatory Schedule FA disclosure, adding real complexity to ITR filing that a pure-Indian-stocks investor never has to deal with.
• US estate tax exposure at the $60,000 threshold for larger portfolios, with no treaty relief.
• Currency risk works both ways. Rupee depreciation against the dollar can flatter your INR returns, but rupee appreciation can just as easily eat into a dollar gain — this is not something LRS-route investing shields you from.
• You are still capped by your personal $250,000 annual LRS limit, shared with every other foreign remittance you make in that financial year.

11. Who this route actually suits

This route suits someone who wants genuine ownership of US-listed companies for long-term diversification away from Indian markets, is comfortable holding for over 24 months to get the more favourable LTCG rate, and does not mind the extra layer of ITR filing that comes with Schedule FA and Form 67. It suits it less if you are looking to actively trade US stocks short-term, since the STCG-at-slab-rate treatment and the double FX markup both work against frequent buying and selling.

Core rule: this is a long-term diversification tool, not a short-term trading venue — the tax structure itself is quietly designed to reward patience and penalise churn.

Related Guides

• Retirement and FIRE Guide
• Tax Saving Guide (India)
• Asset Allocation Guide
• Mutual Funds Guide (India)
• Inflation Guide (India)

Disclaimer

This guide is for educational purposes only and does not constitute financial, tax, or legal advice. Rules around LRS limits, TCS, capital gains tax, dividend withholding, and US estate tax can and do change, and figures here are based on rules and rates current as of September 2026. Fee structures (brokerage caps, FX markup) vary by platform update and are reported inconsistently across sources — verify current charges directly in the INDmoney app before transacting. Evaluate your own situation and consult a SEBI-registered investment advisor or a qualified chartered accountant with cross-border tax experience before acting, particularly for anything involving Schedule FA disclosure, Form 67, or US estate tax planning.